Short-term rental regulation in Arkansas varies depending on municipal needs.
By Becca Bona
Born out of the evolution of the real estate and hospitality industry, “short-term rentals” refer to lodging accommodations rented out for (typically) less than 30 days. While they aren’t new, companies such as Airbnb and VRBO popularized the rise of the sharing economy, which resulted in the now commonplace practice of renting out spare rooms or entire properties to travelers and temporary visitors.
During the early days of the COVID-19 pandemic, short-term rentals became even more mainstream, due to the flexibility they provide for travelers and the ability to social distance.
Across the country, short-term rentals have come under debate. They come with a list of positives and negatives. They potentially drive tourism and offer flexible accommodations to travelers. However, they can also eat up the viable housing supply and wreak havoc on local infrastructure. The largest issue, perhaps, is each community has its own needs, and there is no one-size-fits-all approach to regulation. The Arkansas Municipal League (AML) notes that cities, towns and communities in Arkansas are tackling short-term rentals in various ways. General Counsel and Legislative Director John Wilkerson notes that part of the debate involving short-term rentals is about investment. “If you’re a long-term renter, you’re at least investing yourself into the community,” he said. “If you’re a short-term renter you’re just there for a weekend.” Plus, the amount of short-term rentals in a municipality can cause issues with the available housing stock.
“There is a housing shortage,” AML Executive Director Mark Hayes said. “And whether it’s in every single community or not, I think, generally speaking, affordable options have shrunk for people.” While Hayes notes that there are multiple factors driving this issue, he believes it’s still important to take note, especially in tourism communities. “That’s a balance as well, you can’t provide those entertainment tourist services if people aren’t able to afford to live there long term,” he explained.
Popularized by platforms like Airbnb and VRBO, short-term rentals have reshaped the housing market prompting Arkansas cities to address regulation in various ways.
The strain on infrastructure can cause pain points, as well. Is the city well-poised for an influx of visitors? The AML has to consider all parties involved when heading into a legislative session. Property rights are king in Arkansas, and property owners expect a certain level of freedom to use their property as they see fit. “We don’t want to regulate things out of existence, by any means. But we do need to have the ability to be nimble and deal with the needs of our citizenry,” Wilkerson said. “It’s a very careful and delicate balance.”
Regulating short-term rentals at the local level goes a long way. Bella Vista, Hot Springs and Bentonville, for instance, all take different approaches.
Bella Vista Mayor Jack Flynn believes short-term rentals have a positive impact on his community, especially because the area lacks traditional hotels. “People want to come to visit, sometimes they’re even visiting relatives but they don’t have enough room in their house,” he said. “I think short-term rentals have an economic effect, definitely.” Flynn also notes that short-term rental properties in Bella Vista have improved the housing stock, as people want good reviews and street appeal matters.
That doesn’t mean that Bella Vista hasn’t had its own issues with citizen concerns, however. “They worry that if there are too many [short-term rentals] in an area, then it will lose that neighborhood feeling. They don’t like that idea of having a different group of people there every weekend as opposed to neighbors they know,” Flynn said.
The mayor added that right now, the main goal is to ensure the amount of short-term rentals doesn’t outrun the percentage of available housing stock.
Hot Springs has long been a tourism hot spot, thanks to the national park, colorful mob history, and unique blend of art and culture. Hot Springs City Manager Bill Burrough explains that while the Spa City is a destination for visitors, residents call the place home as well. “The board set a cap on short-term rentals within the city at 500. If it’s a horizontal property group or condominium outside of our regulation … we don’t regulate those,” he said.
Burrough says city management worked on the short-term rental ordinance for more than a year, conducting meetings with stakeholders and capturing citizen input. “The ordinance we started with changed over time as we learned more about short term rentals and how they impact our city and the character of our neighborhoods,” he said. For instance, a few months ago, the city lowered the short-term rental cap to 400 but honored all those approved at the time, with 425 licenses now active.
Main complaints from citizens regarding short-term rentals involve garbage pickup, parking and occupancy. Hot Springs took action by regulating how many people can stay overnight in a rental: two per bedroom. “The number of people that can be on the property is 50% more than what is allowed to sleep overnight,” he clarified. “That comes into effect when we see a complaint. Part of our ordinance requires a local contact to be available 24 hours a day, and they have to be able to respond to a complaint within 60 minutes.”
Burrough pointed out that even though there is an ordinance in place, it’s subject to change again if the community deems it so. “Being a resort community we have to be cognizant of the fact that short-term rentals are something that people look for when they travel as well as staying in our hotels. It all goes back to that balance and finding what works for your community,” he said. “I think there’s a place for them.”
Bentonville offers individuals many reasons to visit, from renowned art institutions to Walmart HQ and quality trails. Considering this, Bentonville has a plethora of short-term rentals. “Bentonville does not have specific regulations for short-term rentals,” Bentonville Planning Manager Sherri Kerr said. She notes that common complaints include parking, noise and property maintenance. “Bentonville city codes regarding those issues apply to all property, including those being used for short-term rentals,” she said. “Bentonville enforces existing regulations particularly related to nuisance issues to help ensure that short-term rentals remain good neighbors.”
Instead of direct regulation, the city offers programs aimed at encouraging neighborhoods to create a sense of connection and safety. “We offer a Great Neighborhoods Program designed to build bonds between neighborhood residents, foster communication between the residents and city, and empower residents to enhance their neighborhood all to help create strong, stable neighborhoods,” Kerr said.
No matter the municipality, it all comes down to specific needs. “If I was a mayor and city council member, I would want to have a lot of information,” Hayes said. “The key is making sure we listen very carefully to what the residents of the city say.”