Anyone who knows anything about short-term rental debates could have bet that the discussion in the Arkansas House City, County, Local Affairs Committee was going to be a lengthy one.
For more than two hours Wednesday morning, state representatives and members of the public discussed Senate Bill 197, which would mostly prohibit municipalities from regulating short-term rentals like Airbnb and VRBO houses. The committee met again Wednesday afternoon and Rep. Lanny Fite (R-Benton), committee chairman, said sponsor Rep. Brit McKenzie (R-Rogers) would be amending the bill and the committee wouldn’t take action until after it reconvenes following a spring break next week. But Fite was allowing members of the public to keep speaking about the bill.
The meeting was off to a rocky start in the morning when McKenzie showed up late because of what he said were technical issues. The disorganization continued when McKenzie asked to add an amendment in the middle of questioning. Despite the funky order of things, the committee heard and added the amendment. They then continued their discussion on the bill as amended.
The Senate approved the bill in February.
That amendment, not yet available online, would ensure that homeowner associations or similar organizations would still be able to form and establish bans on short-term rentals in their area if they chose to, McKenzie said. It also would add language to allow municipalities to take a rental off the market if an owner was found guilty of three of the same ordinance violations within a 90 day period. Cities could also take rentals off the market for a period of time if a death occurred on the property. Sex offenders would also not be allowed to book short-term rentals in the state, McKenzie said.
“We believe that cities and municipalities should have the ability to police and enforce their ordinances to make sure that it is a quiet and enjoyable community for everybody,” he said. “These amendments are consistent with that.”
With the amendment or without, several representatives had qualms with the bill. Rep. Johnny Rye (R-Trumann) asked several questions concerning the parking at short-term rentals. Rye asked how permanent residents were expected to park at their homes while dealing with renters at houses without garages and limited street parking. McKenzie said that the bill did not discuss parking concerns, and he recommended that people should “form an HOA … [park] down the street or at the Kroger.”
McKenzie said that he’s often been met with the criticism that the bill goes against the principle of local control. Fighting the “overregulation” that McKenzie said goes against the Arkansas Constitution, SB197 would create a “level playing field” for all property owners.
He said that he personally lives around short-term rentals and deals with the accompanying issues by calling local officials. “That understanding does not give me the right to say that my constitutional rights for property are larger than that of my neighbors,” McKenzie said.
Under the bill, short-term rentals would apply for a no-fee permit, but McKenzie said that city officials wouldn’t have the authority to deny an applicant. However, municipalities would not be limited to establish additional ordinances that dealt with things like parking or neighborhood notification requirements.
Rep. David Whitaker (D-Fayetteville) said that it seemed like city councils and mayors would effectively be powerless under the bill. McKenzie denied this, but confirmed again that they would not be able to reject a short-term rental application.
Rep. Ashley Hudson (D-Little Rock) asked what the rationale was in “favoring” these operators, who would be given a free license while any other small business operators have to pay a fee in Arkansas.
Chairman Fite quickly silenced a crowd cheering for Hudson, and McKenzie replied that the bill does not classify short-term rental owners as small businesses, but rather just as property owners. He said the bill would put the property owners back on the same level as others, like long-term rental owners.
Hudson and Rep. Mindy McAlindron (R-Centerton) both brought up an Arizona short-term rental law that was cited. They asked why Arkansas was working toward something that didn’t work and needed to be fixed in a different state. McKenzie said that everywhere is different, and the Arizona environment for short-term rentals was on the other side of the spectrum than Arkansas because of the sheer size of its cities.
In public comments, those speaking for the bill largely referenced the same idea of leveling the playing field.
Larry Kelly, a real estate broker in Northwest Arkansas, said he was concerned about targeting specific groups for the length of their stay. He said that it was discriminatory.
“If you’re going to regulate one, why not regulate them all?” Jerry Snow, a council member from Bella Vista testified.
Marion Heath, a woman who has managed an Airbnb out of her home, argued that “private property is just that: private property.”
Members of the public in opposition said that they preferred local voices to stay in control and expressed concerns about crime.
Two Eureka Springs residents talked of how short-term rentals have completely taken over the tourist town. David Avanzino, a member of the town’s council, presented a data breakdown of just how saturated Eureka Springs is.
“Doing the math, there is a nightly rental approximately every 30 feet that you walk in our zip code,” David Avanzino said.
He also said that many of the rentals in town have out-of-state owners. Because of the high number — more than 2,000 rentals — David Avanzino said that the council established a moratorium against allowing more short-term rentals. He said that it doesn’t limit the ones already in place, but no others can be started.
Ethan Avanzino, Eureka Springs resident and owner of a local lodge, said that he’s worked with several people providing them housing while they struggled to find a place to stay. Short-term rentals have limited available and affordable housing, he said.
He said that he knows of folks who have slept in their cars, bounced from couch to couch, and were stationed in a shed on the outskirts of town without running water or electricity.
“If there is no housing available for people working in the tourism industry, then there is no tourism industry,” Avanzino said. “At what point is a town so saturated with nightly rentals that there’s no people in town to work at the local hotel, the kayak rental shop or the zipline? What about the grocery store, hospital?”