City leaders to discuss increasing cap on number of Airbnbs, other short-term rentals in nonresidential areas

photo by: AirDNA

A map from the market monitoring site AirDNA shows the short-term rentals in Lawrence. The purple dots are whole-home rentals and the blue are private room rentals.

With the goal of preserving the city’s neighborhoods, city leaders will soon discuss increasing or eliminating the cap on the number of Airbnbs and other short-term rentals allowed in nonresidential areas.

The Lawrence City Commission will discuss the possible changes as part of its meeting Tuesday. Currently, the city caps the number of short-term rentals that one person or ownership group can operate at three regardless of the location. The limit applies to all properties that are rented by the night, typically on online platforms such as Airbnb and Vrbo.

Mayor Lisa Larsen requested that the city revisit the regulations late last year. Larsen said Friday that she continued to be interested in whether it was possible to increase or eliminate the three-rental cap only for nonresidential zoning districts, such as commercial or industrial areas, to allow such rentals to grow more in those areas. Larsen said she’s interested in increasing or eliminating the cap for nonresidential areas as a way to help preserve the housing stock in Lawrence neighborhoods for residential uses.

“My concern is just keeping the neighborhoods, as closely as possible, to those who are dedicated to living there, either as a rental property as a whole or as ownership,” Larsen said. “My concern is that are we tying the hands of industries and businesses who have opportunities to rent out part of their building.”

Larsen said she continues to be against stand-alone short-term rentals in neighborhoods, which are currently allowed only if the owner also resides in the home or on the property.

Currently, there are 117 short-term rental licenses in good standing in Lawrence, according to the city’s planning and development services dashboard. Those rentals are almost exclusively in neighborhoods and concentrated in particular areas.

More specifically, the rentals are highly concentrated in the core neighborhoods surrounding downtown, with East Lawrence and the Oread neighborhood seeing some of the highest concentrations of rentals, according to the market monitoring site AirDNA. The vast majority of the rentals are for the entire home or apartment, with 83% of the rentals being entire-home rentals and the remaining 17% a private room. Over the past 12 months, the average occupancy rate of the rentals was 60%, and the average daily rate was $141, according to AirDNA data.

photo by: AirDNA

A close-up map from the market monitoring site AirDNA shows a concentration of short-term rentals in the core neighborhoods, especially East Lawrence.

This would not be the first time the city has amended its regulations for short-term rentals. The Lawrence City Commission first approved short-term rental regulations in 2018, and later amended those regulations in the fall of 2020.

Under the current regulations, Airbnbs and other short-term rentals are prohibited in single-family residential areas unless the operator also lives in the home or in a property on the same lot, such as a duplex or home with a carriage house or other accessory dwelling unit. The city further defines an owner-occupied unit as one where the owner resides there more than 270 days per calendar year, which is equal to about 74% of the year.

The regulations only allow nonowner-occupied short-term rentals in residential areas zoned as multifamily and several nonresidential zoning districts. For all zoning districts and types of short-term rentals, operators can only operate a maximum of three rentals at one time. Those who operate such rentals illegally are subject to a fine of up to $2,500.

The commission in 2020 also expressed concern about the impact of Airbnbs and other short-term rentals on the city’s core neighborhoods and the city’s stock of affordable housing, and those regulations were significantly more restrictive than those initially created in 2018. The commission will discuss any potential changes to the regulations as part of its meeting Tuesday and give city staff direction as to whether commissioners would like to consider any changes at a future meeting.

The Lawrence City Commission will convene at 5:45 p.m. Tuesday at City Hall, 6 E. Sixth St.


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