Kansas City will introduce a proposed ordinance Monday that wades deep into the sharing economy — specifically to regulate Airbnb and other short-term property rentals.
City staff members have spent two years researching ways to legalize what’s now actually illegal in the city. After looking into other cities’ rules and holding community meetings, they’re proposing permit fees and time limits to govern how such “hosts” rent out their properties.
The proposal is for two levels of regulation, one for owner-occupied properties and one for non-owner-occupied properties.
Basically, hosts who fall in the owner-occupied category would need to get a $100 first-year permit, limit the length of stay per contracted guest to 30 days, and contract with only one party at a time.
Hosts who don’t occupy the rental property would need a first-year permit of $259 or $596, depending on whether neighbors agree to the rental use, and meet additional requirements.
Just as the city wrestled with Uber and Lyft regulations, regulators realized that rules on the books hadn’t kept up with current realities in which single-family homes, apartment units, spare bedrooms and even living room couches are posted online for short-term guests. Hundreds of properties currently are posted for short-term rent in the Kansas City area.
The draft ordinance, shared with Airbnb, drew immediate pushback.
“While we’re appreciative to the city for the inclusive and transparent process they’ve led to this point, this ordinance as currently written would create one of the most restrictive and burdensome short-term rental regulatory structures in the country,” said Benjamin Breit, spokesman for Airbnb. “We welcome regulations but they should be simple and fair. Our KCMO host community encourages the City to go back to the drawing board.”
But city officials said they believe the proposed rules are fair to the community at large.
“Technically, people who have been doing it have been violating a city law,” said Kansas City Councilwoman Jolie Justus. “But we need to be progressive and participate in the new sharing economy.”
Justus also said it was important for the city to “get out in front” of the issue and set standards so that the Missouri General Assembly might use the city regulations as a model for the state rather than attempting to pre-empt local control.
Justus said she welcomed community conversations on the proposals. The draft ordinance will be accessible at kcmo.gov; search for “short term rental.”
“It’s been a long process, and we think we’ve ended up with a more progressive ordinance than some cities,” said Diane Binckley, division manager of the city’s Planning and Development Department. “We think we’ve balanced the rights of property owners to rent out their homes with the rights of their neighbors to protect the safety and character of their neighborhoods.”
The proposals aren’t expected to be universally embraced. Some hosts see a regulatory overreach that limits their entrepreneurial ability to earn income. An Airbnb report from the company estimated revenues of $4.1 million last year to about 460 Kansas City-area hosts.
Lance Pierce, an Airbnb host for the last six years who was involved in several discussions with city officials, said he was disappointed with the draft ordinance.
“This will intimidate a lot of people who just want to rent out a room,” Pierce said. “Usually, an ordinance should be drafted to address a lot of problems …but this is an overreach compared to the few real problems that might have been presented.”
The KC Tech Council previously sent a letter in reaction to initial proposals released in February, calling them unreasonable, burdensome and a bad message if the city wants to look like a favorable place to visit, live and work.
But backers said regulation is needed for safety and good relationships with neighbors.
City Hall spokesman Chris Hernandez said the city wants to ensure that people don’t rent Airbnb places to throw big parties because they don’t want to mess up their own houses.
The new ordinance specifically would ban rental of the covered facilities “for use as reception space, party space, meeting space, or for other similar events open to nonresident guests.”
Some basic details in the proposals:
For owner-occupied properties — essentially homeowners who live in their residence at least 270 nights a year — the ordinance would allow them to rent to guests with a limit of 30 days on each stay. No more than eight guests would be allowed at a time, and the host could enter a contract with only one party at a time.
There would be no limit on the total number of nights in a year that an owner-occupied property could be rented out through online applications such as Airbnb. Some guests would be able to use the property when the owners aren’t at home since the ordinance would only require the owner to be in residence for 270 days a year.
Resident owner/hosts would be required to submit an affidavit that immediately adjacent property owners had been notified of the short-term rental use, pay $100 for a first-year short-term property rental permit application and renew a $50-a-year permit annually.
Pierce said he found the notification requirement to be particularly onerous from someone who simply wanted to rent out a spare bedroom.
For non-owner-occupied permits, the initial permit fee is higher and the regulations stiffer.
Along with a $259 permit application, a non-owner-occupied host would be required to obtain signatures from the property’s immediate neighbors, with at least 75 percent of them approving the use. If that approval isn’t obtainable, the host would need to apply through a special-use permitting process and pay a fee of $596.
Non-owner-occupied property hosts also would need to pay $50 a year to renew the short-term rental permits and obtain a city business license. Both kinds of properties also must have operating smoke and carbon monoxide detectors.
Other specifications in the proposed ordinance are likely to bring considerable debate. For example, a carriage house on historically designated properties or in designated historic districts would be OK to rent out, but use of outbuildings, such as apartments above a garage in many residential neighborhoods, wouldn’t be allowed under the short-term rental ordinance. The latter structures only can be rented to family members.
“We will evaluate that in the first year, though, and possibly amend the ordinance,” Binckley said of that “accessory building” aspect.
Plans also call for complaints about improper or misused short-term rentals to be investigated by city planning and development staff, with possible consequences of permit revocation.
The proposal has separate considerations for owner-occupied homes that operate as bed-and-breakfast locations and serve food to guests.
The proposals are set to be introduced June 6 to the City Plan Commission. If approved, the matter will be assigned to the City Council’s Planning, Zoning & Economic Development Committee. Public comment will be accepted at both meetings.
The new ordinance could be expected to go into effect 90 days after approval by the City Council as a whole.