Government & Politics

With council OK, here’s how KC will regulate Airbnb and other short-term rentals

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The Kansas City Council took another step into the new sharing economy Thursday, voting to regulate where and how residents can host guests though popular platforms such as Airbnb, Homeaway and Flipkey.

The council’s 7-4 vote caps three years of discussion and debate. It bars new short-term rentals in certain low-density neighborhoods of single-family homes, where residents expressed concerns about the prospect of “strangers” living next door, producing noise, traffic and possibly crime.

Each short-term unit is limited to eight guests, with no more than two people to a bedroom. Multi-family homes are restricted to one short-term unit or 25 percent of all apartments, whichever comes first. Fire and safety inspections are required. Homes or apartments cannot be used for receptions, parties or similar events.

The ordinance also establishes different requirements for units that are owner-occupied and those where the owner lives elsewhere. Off-site owners must secure the consent of 55 percent of adjacent property owners. If that is not possible, they can apply to the city for a special use permit.

Owners who live on the premises must disclose their plans to all adjacent property owners.

All hosts will pay a one-time administrative fee of $259 and then $175 annually. Hosts in historic districts or in certain other circumstances must apply for a $596 special use permit

First-time violators are subject to $200 fine and up to 10 days in jail.

The measure is the latest acknowledgment that technology-driven forms of commerce, where goods and services can be had with the tap of an iPhone, are here to stay. Council members said they tried to strike a balance between neighborhood concerns and the city’s broader aspiration to be attractive to the young and tech-savvy.

Short-term rentals have been an unregulated sector of the local hospitality industry for years. Owners of more than 600 Kansas City homes and apartments rented to about 72,000 guests through Airbnb in 2017, the company says. Those lodgings provided an average $6,300 in annual income.

“Technology has come farther than we have as a city,” said Councilman Scott Taylor. “Times have changed. These platforms are here and people are using them.”

But Taylor, a candidate for mayor next year, did not want times to change too quickly in his South Kansas City base, where short-term rentals are not popular. He supported a provision that bars new rentals in certain low-density residential neighborhoods, unless it is an historic district. The areas comprise a total of about 64,000 single-family homes.

Existing short-term rentals in those communities (estimated at just 150) could apply to be grandfathered into compliance.

The provision sparked opposition from several members, who contended that an overly restrictive ordinance would make the city more vulnerable to preemption by state legislation.

Opponents said the short-term rental debate could end up traveling the same path as City Hall’s negotiations with the ride-sharing services Uber and Lyft. The city approved regulations in 2015 with paperwork requirements and background checks. The companies lobbied Jefferson City for relaxed rules, which they secured last year.

Councilman Quinton Lucas offered an amendment from the floor eliminating the exemption of the single-family home communities, but offering instead a six-month moratorium on new short-term rental applications. The period would be used to study neighborhood densities to see where a ban might be most appropriate.

Other members said the measure, which has been through numerous twists and turns, should return to committee before taking action with such a significant revision.

“I’d much rather be able to tell my constituents you’re in or you’re out and here’s why,” said Councilman Kevin McManus.

Lucas agreed to withdraw his amendment and return the ordinance to committee. Mayor Sly James pushed back, noting, “Every time we have a tough decision we send it back to committee 58 times.” The motion to return the bill failed 8-3.

Voting for the ordinance as written were Mayor Pro Tem Scott Wagner and council members Heather Hall, Dan Fowler, Lee Barnes, Alissia Canady, Taylor and McManus. Voting against were Mayor James and council members Lucas, Jermaine Reed and Katheryn Shields. Councilwomen Jolie Justus and Teresa Loar were absent.

In a statement, Airbnb Midwest policy director Laura Spanjian praised the council vote. “We are thankful to the City Council for recognizing and legitimizing the KCMO host community. These clear rules reflect a fair compromise that Airbnb and our hosts are proud to support.”