City to require licenses, inspections of Airbnb, other short-term rentals; special permits required in some cases
photo by: City of Lawrence
The Lawrence City Commission voted to begin regulating Airbnb properties and other short-term rentals, including a process that would require commission approval before a property owner who resides elsewhere could operate such a business.
At their meeting Tuesday, commissioners voted, 3-2, with commissioners Matthew Herbert and Jennifer Ananda against, to approve licensing and inspection requirements for short-term rentals. Under the regulations, special-use permits would be required for short-term rentals where the owner doesn’t live on site, and those permits would have to be approved by the City Commission.
Currently, any form of short-term rental is not allowed under city code. Commissioners agreed that they did not want to stop homeowners from renting out a room or portion of their properties short term, noting that the extra income can allow them to stay in their homes and make improvements. However, some had concerns about nonowner-occupied short-term rentals.
Mayor Stuart Boley described nonowner-occupied short-term rentals as an intrusion of commercial activity into residential neighborhoods. He said such a use was not compatible with the commission’s strategic plan of creating safe, healthy and welcoming neighborhoods. For that reason, Boley said he supported the regulations as proposed.
“I think we need to be concerned about commercial entities coming in and buying our residential property and turning them into short-term rentals,” Boley said. “There’s been indications in other communities that hotel companies have acquired homes simply for that purpose, so I think this is a good place to start.”
The permit for nonowner-occupied short-term rentals would have to be considered by the Planning Commission and City Commission, which could vote not to approve it. For property owners who live at the short-term rental, the short-term rental use is a right but requires a license. Licenses for both owner-occupied and nonowner-occupied short-term rentals require yearly inspections, a certain level of insurance, proof of taxes paid and adherence to the city’s parking and occupancy rules. The city’s inspection program inspects for health and safety issues, such as the presence of smoke detectors and whether windows can be opened.
Several short-term rental owners and operators spoke to the commission during public comment, many of whom pointed out that the rating system on Airbnb essentially requires short-term rentals to be in top condition. They said, because renters rate their stays and those ratings appear on the website, low-rated properties will not be successful.
Vice Mayor Lisa Larsen also said that she had heard about hotel companies buying residential properties in other cities to convert them into short-term rentals, and she asked whether the city wanted such properties within neighborhoods.
Herbert, who owns a property management company, said if that meant those companies fixed up dilapidated residential properties and made them safe, then he wouldn’t be opposed. He noted that commercial investors also buy up properties and convert them to long-term rentals.
Herbert said that he was not against inspecting short-term rental properties, but he questioned the insurance requirement and said he thought they should be inspected either every three or six years based on performance, just like long-term rental properties. He described the regulations proposed for short-term rentals as “significantly more severe” than those for long-term rentals.
“I would just ask that we operate short-term rentals on the same playing field that we operate long-term (ones), and as such, have the same inspections, for safety purposes, but also offer the advantage to homeowners who prove that their homes are in good condition,” Herbert said.
Boley noted that the long-term rental regulations were created by a past commission, and said it’s possible the city could be trying to tighten the long-term rental inspection program. The city only inspects about 5 percent of the rental properties in Lawrence, and a resident survey indicated that about a quarter of renters rate their housing condition as poor.
Commissioners did indicate they had some questions about the licensing requirement for insurance. According to the regulations, short-term rentals must have a certificate of insurance in an amount of at least $1 million for casualty, personal injury and property damage.
While Ananda said she thought the city should regulate short-term rental properties, as opposed to leaving that to private businesses, she thought the conversation needed to continue regarding the insurance requirement. Ananda questioned why insurance would be required for short-term rental properties but not long-term rental properties. Larsen also said she wasn’t sure on that requirement and that she would like to discuss it further.
In response to questions from the commission, Randy Larkin, an attorney for the city, said that one difference between short- and long-term rentals was that long-term tenants had the ability to get renters insurance, but that he thinks there may have been a compromise there when it came to not requiring insurance for long-term rental licenses.
In other business, the commission voted unanimously to approve a $67,500 settlement related to a high-speed police chase that ended in a car accident. William and Sandra Gibson were injured in the accident and filed a lawsuit against members of the Lawrence Police Department earlier this year. The city attorney’s office recommended the commission approve the settlement agreement, which states that it is not an admission of liability and intends to avoid the expense of future litigation.