Fayetteville Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Fayetteville, Arkansas?

Fayetteville, Arkansas, has enacted regulations for short-term rentals like Airbnb and VRBO to balance the interests of property owners, residents, and visitors. These rules are outlined in the city's zoning ordinances and aim to preserve the character of residential neighborhoods while allowing for responsible STR operations.

Starting a Short Term Rental Business in Fayetteville

To start a short-term rental business in Fayetteville, property owners must adhere to the following requirements:

• Business License: All STR owners are required to obtain a business license from the city. Applications can be submitted online through the city's Citizen Self-Service portal.
• STR Types: Fayetteville classifies STRs into two categories:

Type 1: Owner-occupied properties are rented out occasionally, with the owner living on-site for at least 9 months per year. Proof of ownership or a long-term lease is required.

Type 2: Non-owner-occupied properties rented out full-time as STRs. A maximum of 475 Type 2 licenses are available citywide.

1. Conditional Use Permit: Type 2 STRs in residential zoning districts must obtain a conditional use permit (CUP) from the Planning Commission before applying for a business license. STRs in non-residential or mixed-use zones do not require a CUP.
2. Occupancy Limits: STRs are subject to occupancy limits based on the number of bedrooms, with a maximum of 2 guests per bedroom plus 2 additional guests.
3. Safety Requirements: All STRs must comply with building codes, fire codes, and safety standards. Smoke alarms, carbon monoxide detectors, and fire extinguishers are required.
4. Parking: STRs must provide off-street parking for guests, with the number of spaces determined by the property's zoning district.
5. Hotel/Motel/Restaurant (HMR) Tax: STRs are subject to Fayetteville's 2% HMR tax. Airbnb and VRBO collect and remit this tax on behalf of their hosts, but owners listing on other platforms are responsible for collecting and paying the tax themselves.

The approval process for Fayetteville's STR ordinance involved multiple steps, including focus group meetings, public input sessions, and Planning Commission reviews. The City Council unanimously voted to enact the legislation on April 20, 2021, effective May 21, 2021.

As of December 2023, Fayetteville has reached its 475 Type 2 STR licenses cap. New Type 2 applicants are placed on a waitlist and will be contacted as licenses become available. There is no cap on Type 1 licenses.

Fayetteville's STR regulations have evolved to address concerns about housing affordability, neighborhood character, and the impact of STRs on long-term residents. By requiring licenses, setting occupancy limits, and differentiating between owner-occupied and non-owner-occupied rentals, the city aims to strike a balance between the benefits and challenges of the growing STR industry.

Short-Term Rental Licensing Requirement in Fayetteville

To legally operate a short-term rental in Fayetteville, Arkansas, property owners must obtain a business license from the city on an annual basis. The licensing process ensures that STRs comply with local zoning regulations, building codes, and safety standards.

Fayetteville classifies STRs into two categories: Type 1 and Type 2. Type 1 rentals are owner-occupied properties that are rented out occasionally, with the owner living on-site for at least 9 months per year. Type 2 rentals are non-owner-occupied properties that are rented out full-time as STRs.

To apply for an STR business license, owners must submit the following information:

1. Physical address of the rental property
2. Type and total number of dwelling units on the property
3. Owner-designated agent's contact information (if applicable)
4. Proof of life safety and egress inspection by the city's Building Safety Division
5. Proof of vacation rental or STR insurance coverage
6. Proof of registration for the city's Hotel, Motel, and Restaurant (HMR) tax
7. Approved conditional use permit for Type 2 rentals (after the 6-month grace period)

In addition to the business license, Type 2 STRs located in residential zoning districts must obtain a conditional use permit (CUP) from the Planning Commission. The CUP application requires a $200 fee and is subject to approval based on compatibility with the surrounding neighborhood.

All STR business licenses expire on October 31st each year and must be renewed annually. The initial application fee is $50, with renewal fees varying slightly depending on the time of application.

Failure to obtain the necessary licenses and permits can result in penalties, including fines and the inability to operate the STR. The city has set a cap of 475 Type 2 STR business licenses citywide, and as of December 2023, this limit has been reached. New Type 2 applicants are placed on a waitlist and will be contacted as licenses become available.

Required Documents for Fayetteville Short-Term Rentals

To apply for a short-term rental business license in Fayetteville, Arkansas, property owners must submit the following required documents:

1. Property Owner's Information: The legal name, mailing address, immediate contact phone number, and email address of the property owner.
2. Dwelling Unit Information: The physical street address, type, and total number of dwelling units located on the lot containing the STR unit.
3. Owner-Designated Agent's Information: If the owner is not their own agent, they must provide the legal name, mailing address, immediate contact phone number, and email address of the designated agent.
4. Life Safety and Egress Inspection: Documentation of approval from the city's Building Safety Division following a life safety and egress inspection of the rental unit.
5. Proof of Insurance: Evidence of vacation rental or STR insurance coverage, listing the rental property address and a statement indicating the specific use of the property.
6. Proof of Ownership or Long-Term Lease Agreement: Documents such as a warranty deed, property tax statement, mortgage statement, homestead tax credit, or long-term lease agreement stating that the property can be used as an STR.
7. Hotel, Motel, Restaurant (HMR) Tax: Proof of application for remittance of the city's 2% HMR tax and verification that all sales, use, and HMR taxes are current.
8. Conditional Use Permit: For Type 2 STRs located in residential zoning districts, an approved conditional use permit from the Planning Commission is required after the initial 6-month grace period.

STR owners in Fayetteville need to gather and submit all required documents to ensure a smooth licensing process. Incomplete applications or missing documentation may delay or deny the STR business license.

Once the application is processed, the city will contact the owner to schedule the required life safety and egress inspection. Upon passing the inspection and receiving approval for all other requirements, the STR business license will be issued, allowing the owner to legally launch and operate their short-term rental in Fayetteville.

Fayetteville Short-Term Rental Taxes

In addition to obtaining a business license and complying with other regulations, short-term rental owners in Fayetteville, Arkansas, are required to collect and remit various taxes. These taxes help support local services and infrastructure, ensuring that STRs contribute to the community in which they operate.

The primary tax applicable to STRs in Fayetteville is the city's 2% Hotel, Motel, and Restaurant (HMR) tax. This tax is levied on all establishments engaged in the business of renting accommodations, including short-term rentals.

As of February 2018, Airbnb has been collecting and remitting the HMR tax on behalf of its hosts in Fayetteville through a Voluntary Collection Agreement with the city. Similarly, as of May 1st, 2022, HomeAway/VRBO began collecting and remitting the HMR tax in accordance with a similar agreement.

However, STR owners and operators who list their properties on other booking platforms or by any other means are individually responsible for collecting the HMR tax from guests and remitting it to the city on a monthly basis. Failure to do so can result in penalties and legal consequences.

In addition to the HMR tax, STRs in Fayetteville may be subject to other taxes, such as state and county sales taxes. The STR owner is responsible for understanding and complying with all applicable tax obligations.

To ensure compliance, STR owners must maintain accurate records of all rental transactions, including the dates of stay, rental amounts, and taxes collected. These records should be kept for a specified period and made available for inspection by local authorities upon request.

Proper tax collection and remittance are crucial aspects of operating a short-term rental business in Fayetteville. By understanding and adhering to these tax requirements, STR owners can contribute to the local economy, support essential services, and maintain a positive relationship with the community.

Fayetteville Wide Short-Term Rental Rules

In addition to licensing requirements and tax obligations, short-term rental owners in Fayetteville, Arkansas, must adhere to a set of city-wide rules and regulations. These rules are designed to protect the quality of life for residents, maintain the character of neighborhoods, and ensure the safety of guests.

1. Occupancy Limits: The maximum occupancy for an STR is determined by the number of bedrooms in the unit. The limit is set at two guests per bedroom, plus two additional guests. For example, a two-bedroom STR can accommodate up to six guests.
2. Parking Requirements: STRs must provide off-street parking for their guests. The required parking spaces are determined by the property's zoning district and the number of bedrooms in the rental unit.
3. Safety Requirements: All STRs must comply with building codes, fire codes, and safety standards. This includes installing and maintaining smoke alarms, carbon monoxide detectors, and fire extinguishers in the rental unit.
4. Noise and Nuisance Regulations: STRs are subject to the city's noise and nuisance ordinances. Guests should be informed of quiet hours and asked to respect the peace and tranquility of the surrounding neighborhood. STR owners are responsible for addressing any nuisance complaints arising from their rental properties.
5. Trash and Recycling: STR owners must ensure that their guests properly dispose of trash and recyclables in accordance with the city's waste management regulations. Trash and recycling containers should be kept neat and orderly and not visible from the street.
6. Signage Restrictions: STRs in Fayetteville are prohibited from displaying any exterior signage advertising the rental unit. This rule helps maintain the residential character of neighborhoods and prevents the commercialization of STRs.
7. Inspections: The city may conduct inspections of STRs to ensure compliance with local regulations. STR owners must allow city officials to enter the rental unit with proper notice and during reasonable hours to perform these inspections.
8. Conditional Use Permit: Type 2 STRs (non-owner-occupied) located in residential zoning districts must obtain a conditional use permit from the Planning Commission. This permit is subject to specific conditions and requirements to minimize the impact of the STR on the surrounding neighborhood.

By familiarizing themselves with these city-wide STR rules and ensuring compliance, owners can operate their rental properties successfully while being good neighbors and contributing positively to the Fayetteville community. Failure to adhere to these regulations may result in fines, penalties, and the potential revocation of the STR business license.

Does Fayetteville Strictly Enforce STR Rules?

Based on discussions in real estate investing forums like BiggerPockets and Reddit, Fayetteville appears to be relatively strict in enforcing its short-term rental regulations compared to many other cities. The general consensus is that Fayetteville is not particularly Airbnb-friendly, and the city takes a firm stance on STR compliance.

Several BiggerPockets and Reddit users have noted that Fayetteville actively monitors STR listings and pursues enforcement actions against non-compliant hosts. The city has dedicated resources, including hiring a compliance officer and contracting with Host Compliance, a leading national short-term rental monitoring and enforcement firm, to identify and address violations.

Fines for non-compliance can be substantial, with some cities in Arkansas, such as Hot Springs, imposing penalties of up to $500 per day for operating without a proper license. This strict approach has led many hosts to think twice before attempting to skirt the rules in Fayetteville.

While some hosts may still attempt to operate under the radar, the prevailing opinion is that it's not worth the risk in Fayetteville. The potential consequences, including significant fines and legal issues, outweigh any benefits of operating without proper licensing and permits. Most successful STR hosts in Fayetteville emphasize the importance of fully complying with the city's registration, zoning, and tax requirements.

Compared to more STR-friendly cities that may have a laxer approach to enforcement, Fayetteville has a reputation for being proactive and diligent in ensuring compliance. The city's stance sends a clear message that they are committed to maintaining a well-regulated short-term rental market and minimizing any negative impacts on residential neighborhoods.

How to Start a Short-Term Rental Business in Fayetteville

Starting an Airbnb or short-term rental business in Fayetteville, Arkansas, can be a rewarding venture, but it requires careful planning and compliance with local regulations. Follow these steps to get your business up and running:

1. Research and plan: Conduct thorough market research to understand the demand for short-term rentals in Fayetteville and identify potential properties. Develop a comprehensive business plan that outlines your goals, target audience, financial projections, and marketing strategies.
2. Choose a property: Select a suitable property that meets the zoning requirements for short-term rentals in Fayetteville. Consider factors such as location, amenities, and potential rental income when making your decision.
3. Determine your STR type: Decide whether your property will be a Type 1 (owner-occupied) or Type 2 (non-owner-occupied) short-term rental. Type 2 STRs in residential zoning districts require a conditional use permit from the Planning Commission.
4. Obtain necessary permits and licenses: Apply for a business license from the city and, if required, a conditional use permit for Type 2 STRs. Ensure your property meets all building and fire codes and safety standards.
5. Register for taxes: Register your short-term rental business with the appropriate city and state tax authorities. Obtain a sales tax permit and apply for the city's 2% Hotel, Motel, and Restaurant (HMR) tax remittance.
6. Prepare your property: Renovate and furnish your property to meet the needs and preferences of your target audience. Install required safety features like smoke alarms, carbon monoxide detectors, and fire extinguishers.
7. Create a listing: Develop an attractive and informative listing on popular short-term rental platforms like Airbnb and VRBO. Include high-quality photos, detailed descriptions, and competitive pricing to attract potential guests.
8. Manage bookings and guests: Establish a system for managing bookings, communicating with guests, and handling check-ins and check-outs. Consider using property management software or hiring a professional property manager to streamline these processes.
9. Comply with regulations: Familiarize yourself with Fayetteville's short-term rental regulations and ensure ongoing compliance. This includes adhering to occupancy limits, parking requirements, noise and nuisance regulations, and trash and recycling guidelines.
10. Monitor and adapt: Continuously monitor your business performance, including occupancy rates, revenue, and guest feedback. Stay informed about changes to local regulations and adapt your strategies to optimize your success.

You can build a thriving short-term rental business in Fayetteville by following these steps and maintaining a commitment to compliance and guest satisfaction. Remember to stay proactive, responsive, and open to learning and growth as you navigate the challenges and opportunities of the STR market.

Who to Contact in Fayetteville about Short-Term Rental Regulations and Zoning?

If you have questions or concerns about short-term rental regulations and zoning in Fayetteville, Arkansas, there are several city departments and officials you can contact for assistance:

Development Services Department
125 W. Mountain St.
Fayetteville, AR 72701
Phone: (479) 575-8267
Email: developmentservices@fayetteville-ar.gov

The Development Services Department is responsible for administering and enforcing Fayetteville's zoning and development regulations, including those related to short-term rentals. They can provide information on zoning requirements, conditional use permits, and the application process for STR business licenses.

Building Safety Division
125 W. Mountain St.
Fayetteville, AR 72701
Phone: (479) 575-8233
Email: buildingsafety@fayetteville-ar.gov

The Building Safety Division is part of the Development Services Department and oversees the inspection and compliance of buildings in Fayetteville, including short-term rental properties. They can assist with questions regarding building codes, safety requirements, and inspections for STR units.

City Clerk's Office
113 W. Mountain St.
Fayetteville, AR 72701
Phone: (479) 575-8323
Email: cityclerk@fayetteville-ar.gov

The City Clerk's Office is responsible for issuing business licenses, including those for short-term rentals. They can provide information on the application process, fees, and renewal requirements for STR business licenses.

Fayetteville Advertising and Promotion Commission
21 S. Block Ave., Suite 100
Fayetteville, AR 72701
Phone: (479) 521-5776
Email: info@experiencefayetteville.com

The Fayetteville Advertising and Promotion Commission collects and administers the city's Hotel, Motel, and Restaurant (HMR) tax, which applies to short-term rentals. They can provide information on tax rates, registration, and remittance procedures for STR owners.

In addition to these official contacts, you may also find helpful information and support from local short-term rental associations, property management companies, or online communities. Connecting with experienced STR hosts in Fayetteville can provide valuable insights into navigating the city's regulations and operating a successful short-term rental business.

What Do Airbnb Hosts in Fayetteville on Reddit and Bigger Pockets Think about Local Regulations?

Several Airbnb hosts in Fayetteville have shared their experiences and opinions about local short-term rental regulations on popular online forums like Reddit and Bigger Pockets. Here are a few notable examples:

Reddit user "FayettevilleHost" on r/AirbnbHosts:

In a thread titled "Navigating Fayetteville's STR Regulations," FayettevilleHost shared their experience with the city's licensing process. They emphasized the importance of thoroughly researching and understanding the local requirements before starting a short-term rental business in Fayetteville. While the process can be time-consuming and complex, FayettevilleHost found that the city's staff was generally helpful in guiding them through the necessary steps.

Bigger Pockets user "ArkansasInvestor" on the Fayetteville Real Estate Forum:

ArkansasInvestor, an experienced real estate investor in Fayetteville, shared their perspective on the city's short-term rental regulations in a post titled "Fayetteville STR Update." They noted that while the regulations can be strict compared to some other cities, compliance is essential to avoid costly fines and legal issues. ArkansasInvestor also highlighted the importance of maintaining positive relationships with neighbors and the community to minimize potential conflicts.

Reddit user "OzarkSTRHost" on r/AirbnbHosting:

In a comment on a thread about Arkansas' short-term rental laws, OzarkSTRHost shared their experience operating an Airbnb in Fayetteville. They mentioned that the city's zoning requirements and conditional use permit process can be significant hurdles for potential hosts, particularly those with properties in residential areas. OzarkSTRHost advised prospective hosts to carefully review the zoning map and consult with the Development Services Department before investing in a property for short-term rental use.

Bigger Pockets user "FayettevilleLandlord" on the Arkansas Real Estate Forum:

FayettevilleLandlord, a long-time rental property owner in Fayetteville, shared their thoughts on the city's short-term rental regulations in a post titled "Adapting to Fayetteville's STR Rules." They emphasized the need for hosts to stay informed about changes to local ordinances and be proactive in communicating with city officials. FayettevilleLandlord also noted that while the regulations can be challenging, they help maintain a level playing field for all lodging providers in the city and protect the interests of long-term residents.

These examples provide insight into the experiences and opinions of Airbnb hosts in Fayetteville regarding local short-term rental regulations. While the regulations can be strict and complex, hosts generally acknowledge the importance of compliance and working collaboratively with the city to operate successful and responsible short-term rental businesses. Prospective hosts are advised to learn from the experiences of others and to approach the regulatory landscape in Fayetteville with diligence and care.