City officials have revived a conversation about short-term rentals in town after City Council heard a presentation Nov. 5 from Planning and Development Director Mary Lilly Smith.
Short-term rentals, or the rental of a residential unit or accessory building on a temporary basis for less than 30 days, are currently illegal under city code. But the popularity of Airbnb and other residential rental platforms is challenging the code.
“We need to recognize there’s a new economy out there and how do we accommodate that within our existing regulations,” Smith told council during the last meeting.
Council members last discussed short-term rentals in March, when a three-tier set of regulations was proposed to define and regulate short-term rentals in Springfield.
Type 1 would cover properties rented less than 30 days in a single-family residential or residential townhouse district that is primarily owner-occupied. This tier addresses properties not rented for more than 95 days in a calendar year.
Type 2 properties would be defined as those that aren’t primary residences of the owners and that are rented for a period of less than 30 consecutive days in a single-family residential or residential townhouse district. No two Type 2 short-term rentals can be within 500 feet of each other, according to the proposal.
Type 3 short-term rentals would be rented for a period of less than 30 consecutive days in districts other than single-family residential or residential townhouse.
All three types would need an annual business license, with Type 1 fees starting at $25, according to city documents. Documents filed with the city do not explicitly state if fines have been enforced or if fines will be utilized if the ordinance passes.
The rise of the short-term rental industry brings with it concerns of commercial activity filtering into residential areas and a potentially uneven playing field in the regulations and inspections that govern hotel rentals.
“There have been instances in other communities where apartment houses have become de facto hotels because they’re being rented out as short-term rentals,” Smith said.
Airbnb lists 184 active rentals in Springfield with an average daily rate of $79. Vacation Rental By Owner lists 67 properties with an average cost of roughly $140 over the last 12 months in the Springfield area.
City data shows a 56 percent increase in short-term rental listings in the 12 months ending in January, when 44 listings were added to the market. The city last collected rental data in September, when 17 new listings were noted, representing a 15 percent increase from January.
Smith said Zone 4 in the southeast part of the city has 40 short-term rentals, the highest concentration in town.
City officials have been working with the Springfield Convention and Visitors Bureau, local and state hotel lodging associations, the Neighborhood Advisory Council, the Development Input Issues Group and short-term rental owners for input, Smith said.
However, advocates to the changes hit a stumbling block recently when Springfield’s Planning and Zoning Commission unanimously recommended denial of any alterations to city code in regard to the short-term rental market.
Smith said individual members of Planning and Zoning were concerned about the 500-foot distance requirement being measured on a linear basis and not radial, along with the thought short-term rentals should be subject to the city’s 5 percent hotel/motel tax.
“Hotels have to go through a number of inspections; they have fees they are paying. Folks operating short-term rentals aren’t subject to those same regulations,” she said.
Hotels, motels, boarding and rooming and lodging houses currently are not permitted in residential areas, according to the city zoning code.
The new ordinance would require each short-term rental to post names and contact information for those responsible for day-to-day operations, a certificate of occupancy for Types 2 and 3 and a business license number, according to city documents. On-site postings detailing city restrictions on noise and parking, as well as a trash collection schedule also would be required.
At City Council’s Nov. 13 luncheon meeting, Smith said Councilmen Richard Ollis and Andrew Lear asked for amendments to the ordinance: extending the 30-day grace period, removing the distance requirement and reviewing a change to a density requirement.
Smith said the amendments could be officially submitted prior to the next council meeting, Nov. 19, when council is scheduled to vote on the ordinance to change city code for short-term rentals.
If the amendments are approved at that meeting, council could decide to send the ordinance back to P&Z for further consideration.
Cindy Hodges, who operates a short-term rental at 425 S. Weller Ave., addressed council Nov. 5 in support of short-term rentals during the ordinance’s first reading.
“Overly restricting and regulating short-term rentals is not going to encourage the same level of investment in the surrounding residential areas,” she said. “It would be a shame for the council to pass an ordinance that discourages revitalization efforts in areas where short-term rentals are a perfect fit.”
Hodges currently serves on the Stone County Board of Adjustments, where operators of short-term rentals were grandfathered in after regulations were established.
“From that point on, every time that someone comes up and wants to get in on a nightly rental, they have to go before Planning and Zoning, and then if it doesn’t fit in the Planning and Zoning box, they send it to the Board of Adjustments,” she said.
In Springfield, Smith said the city’s Plans and Policies Committee has discussed grandfathering in current short-term rentals but opted against it due to their current illegal operating nature. The committee ultimately decided on a lottery system, which would randomly select a current operator to go through any established application process.
Applications in Springfield for short-term rentals would commence two weeks after passage of the ordinance with an initial 30-day review period to determine conflicts, like two Type 2 properties being within 500 feet of each other.
In those cases, Smith said the lottery system would be used.
According to city documents, licenses can be revoked, suspended or denied issuance by the director of building development for 12 months for failure to comply to short-term rental requirements, city code or city ordinance.
The ordinance proposes that licenses may be transferred and permitted for use to another owner, but the new owner must complete an application process and provide required information to the city.
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