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Hot Springs tweaks proposal on short-term rentals

by David Showers | May 9, 2021 at 3:42 a.m.

HOT SPRINGS -- The latest draft of an ordinance for regulating short-term residential rental businesses in Hot Springs would require a conditional-use permit for operation in the city's five residential zoning designations.

Applications for conditional use are submitted to the Hot Springs Planning Commission, which stipulates conditions that have to be followed if a proposed use is not permitted in a zoning district.

"It's a use that the code says is allowed in a given zoned district but subject to conditions that planning commission puts together to ameliorate any difficulties that might be caused by that use in that place," Planning and Development Director Kathy Sellman told the board recently. "Typically, we're looking at the exterior of a structure: parking, lighting, signs, landscaping."

Conditional-use permits granted by the Planning Commission can be appealed to the city board. An appeal of a conditional-use permit allowing a Linden Street group living facility to increase its maximum number of residents is on the agenda of the board's business meeting Tuesday night.

City Attorney Brian Albright said conditional-use permits wouldn't be required for short-term rentals licensed before May 30, the start of the more than four-month moratorium on short-term rental licenses established by an ordinance the board adopted in March.

The city hopes to present short-term rental regulations for ratification at the board's May 18 business meeting. Adopting an ordinance enshrining the regulations would render the moratorium moot, as the pause was intended to give the city time to develop a regulatory scheme for a business practice that's assumed a growing share of the area's lodging portfolio. The city's tourism agency said more than 1,000 are in Garland County.

The March 2 ordinance that established the pause prohibited short-term rentals from operating without a business license, established an annual tax of $50 per bed and defined short-term rentals as accommodations offered for periods of less than 30 days.

"If they have a license, they're lawfully operating now," Albright told the board. "They're considered a preexisting, nonconforming lawful use. They will not need a conditional-use permit to continue to operate."

The initial draft of regulations presented to the board last month capped short-term rentals in residential zoning districts at 1,000. City directors proposed lowering it to 700 or making it a percentage of zoned property in the city.

"An aggregate number is easier for us to manage," City Manager Bill Burrough told the board. "My concern when we start talking about caps is trying to cap a district or a street or a zone. That's almost impossible for us to manage."

The city has said market forces will confine the majority of short-term rentals to certain areas. Visitors are primarily looking for accommodations near Lake Hamilton, Oaklawn Racing Casino Resort and the Northwoods Urban Forest Park, the city said.

Burrough said requiring short-term rentals to apply to the Planning Commission for a conditional-use permit will have a limiting effect.

"If you keep the conditional use, if that remains in here, that's probably something that's going to be more of a factor on that than the cap," he told the board.

Previous drafts limited overnight guests to one person per 200 square feet of living space or two people per bedroom plus one, whichever is greater. The latter is the standard used by the U.S. Department of Housing and Urban Development. The latest draft included an option for two per bedroom plus two, meaning a three-bedroom short-term rental would have an overnight occupancy limit of eight.

"You're going to get a lot of pushback on that," Albright, referring to occupancy caps of two per bedroom, told the board. "Be prepared. There's a lot of bunk room places out there."

The latest draft also defined bedroom as a "habitable room meeting the requirements of the International Residential Code."

Off-street parking of one space per 800 square feet of living space included in earlier drafts remained in the revised version presented last week. Earlier versions exempted short-term rentals licensed prior to May 30, but the latest draft narrowed the exemption to short-term rentals that don't have a driveway or alleyway and are incapable of accommodating a driveway because of "topographical impediments."

Short-term rentals that fit that criteria and are licensed before May 30 would be exempted from the off-street parking requirement.

Previous drafts didn't require property inspections for renewal of short-term rental licenses, only that access be provided upon request by the city and that applicants affirm that their property is code-compliant. The updated draft requires annual inspections, an addition ensuring short-term rentals licensed before May 30 are subjected to the same scrutiny as those licensed after May 30.

The March 2 ordinance didn't include an inspection requirement, effectively allowing short-term rentals licensed before May 30 to operate without ever being inspected.

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