Kansas City cracks down on short term rentals with new rules and zoning restrictions
Kansas City is beefing up its regulations for short term rentals like Airbnb and Vrbo to curb their spread in residential neighborhoods, and to make their owners more accountable to the city.
The Kansas City Council unanimously passed two ordinances related to short term rentals this week, adding a flat fee for owners to register units and limiting where new units can crop up in the city, among other new licensing requirements.
“It’s been a long time coming,” said Fourth District councilman Eric Bunch, the ordinances’ sponsor, during the city council meeting on Thursday.
The proliferation of short term rentals has been a sore point for residents who feel the home sharing trend can be disruptive to neighborhoods while going largely unchecked by the city.
According to the market monitoring site AirDNA, the number of active short term rentals in Kansas City increased by more than 40% in the summer of 2022 compared with the same months in 2021.
An audit of the city’s current short term rental program found that since it started in 2018, about 93% of short term rental units in the city have operated without a permit.
Some short term rental hosts spoke out in opposition to the new, stricter rules and requested, unsuccessfully, that the council take more time to consider the changes before voting.
“The proposals pose significant privacy and safety issues for hosts,” Kelly Morro, a spokesperson for Airbnb, wrote in a statement. “Of particular concern is the provision that would ban (short term rentals) in residential areas unless the property is owner-occupied.”
The new rules come just about a month after Kansas Citians voted to impose a 7.5% tax on short term rentals that Mayor Quinton Lucas said would help the city better regulate them.
“I am proud City Council approved the short-term rental ordinance, providing consistency among short-term rental owners and ensuring all who live in Kansas City can take part in our community’s growing economy,” Lucas said in a statement.
So what are the big changes with short term rentals?
The first ordinance prohibits non-resident short term rentals, meaning those where the rental is not the owner’s primary residence, from registering and operating in city districts zoned as residential.
That means neither local nor out-of-state companies can operate homes that they don’t live in full time as short term rentals in Kansas City’s residential neighborhoods, if those units aren’t already properly registered with the city’s program.
However, non-resident short term rentals can still register units in areas zoned as office, business or commercial districts.
Resident short term rentals, when someone rents out part or all of the home that they live in full time, can still register units in both residential and commercial zones under the new restrictions.
This first ordinance also moved oversight of the city’s short term rental program from city planning to the neighborhood services department, which Forest Decker, the department’s director, said is better suited to enforce housing regulations because it already handles neighborhood code enforcement.
Decker said that the neighborhoods department will meet with neighborhood groups and host presentations on the new rules.
What about the new registration process for short term rentals?
The second ordinance lays out a more intensive registration process for short term rentals, requires that owners provide personal contact information to the city to make it easier to reach them for code enforcement, maintains a public registry of all the legally operating short term rentals, and establishes more consequences for short term rentals that break city code.
The new rules will be effective starting June 15, requiring short term rental owners to:
Register each unit with the city annually
Pay a $200 annual registration fee per unit
Submit contact and personal information for the person responsible to the city for registering the unit — If this person is different from the owner, then the owner also needs to submit this information. If a company or LLC owns the unit, then a singular representative from that company needs to submit this information.
Identify the person who will be staying on the property as a long term resident or the manager of the property who will check on the property at least once a month
The ordinance limits how many short term rentals can be registered in multi-family buildings and buildings receiving city tax incentives at a time.
It gives the city the right to revoke a short term rental’s registration and license to operate if the rental violates city code.
It also makes it unlawful to operate a short term rental if it’s not officially registered with the city, to list an unregistered rental on a third-party site like Airbnb or Vrbo and for those third party sites to take money from any rentals that aren’t properly registered.
What are the consequences for short term rentals that don’t follow city code?
The new ordinances will also create consequences for short time rentals that do not follow these rules. If someone breaks code their registration will be revoked for one year. A short term rental that has violated code three or more times will have their registration revoked for three years.
The city will also work with third-party listing sites to find unregistered short term rentals and require those sites to remove those listings.
Each day that a rental breaks the city’s rules can count as a new violation, which can lead to between $200 and $1,000 in fines and up to 180 days in jail per violation.
What about short term rentals that are already registered with the city?
Short term rentals currently registered with the city will be grandfathered into the city’s new short term rental program.
Starting June 15, new short term rental registrations will have to abide by all the new rules set by the new ordinances.
Between now and June 15, the neighborhoods department won’t accept new registration applications, according to Decker, who said the city saw an influx of applicants since the ordinance was introduced in March. Decker said the city went from getting 30 applications a month to nearly 50 applications a week.
“They kind of saw the writing on the wall,” Decker said.
Short term rentals that are already registered will have to renew their registration with the neighborhood services department once their registration expires.
They will also have to re-register if the owner of the property changes.
Who’s paying for enforcement of the short term rental program?
Much of these new rules will be paid for by the registration fees collected from short term rental owners.
Councilman Bunch said that $74,000 from registration fees has been allocated to the program to hire staff to enforce the new rules. The $1,000 that’ll be used for educating residents will come from the city’s general fund.
What do some short term rental owners think?
Laura Williams, who owns multiple licensed short term rental properties in Midtown and serves as the vice president of the Kansas City Short Term Rental Alliance, said she’s glad that the city is working to make sure unlicensed rentals are held accountable.
“It was really frustrating for me being a licensed owner to see people not following the rules,” Williams said. “I’m happy that the issue was finally being addressed and (that they) put some teeth into the laws.”
Williams said although she likes that the new rules are a good first step, she disagrees with new restrictions on non-resident short term rentals in residential neighborhoods.
“I think it just went a little bit too far,” Williams said. “I think it needs to probably swing back a little bit in the other direction to be balanced.”
What do some residents think?
Groups like “Neighbors Opposed to Short Term Rentals in our KC community’‘ or “NO-STR” have been advocating for stricter enforcement of the city’s home-sharing industry. Residents in the group have complained that the rentals drive up the cost of living, turn residential neighborhoods into business-like districts and disrupt the fabric of the neighborhood.
A 2021 study from Carnegie Mellon University showed that the presence of short term rentals in a community caused a reduction in rental supply, especially among affordable units. The study also found that an increase in short term rentals may benefit lower income landlords.
NO-STR member and West Plaza resident Sharon Pendleton said she’s happy that the city is implementing new rules but feels like little has been done to address the damage that short term rentals have already done.
She said her group is especially upset that the city accepted an influx of applications before the new ordinances were in place from short term rentals that may have already been operating illegally. Any newly licensed short term rentals will also be grandfathered into the program, so they won’t be subject to zoning regulations until they need to re-register, according to the ordinance.
“I think it’s going to improve in the future (of the program) after June 15. But we’ve got another 300 (short term rentals) or so that are going to get into this neighborhood in that period of time,” Pendleton said. “That’s what’s concerning.”
Decker said that most of the neighborhood organizations he’s met with in the past two months agree with the new changes to the short term rental program. If any groups are interested in meeting with him to discuss the new rules, he said he’s happy to meet with them.
“I feel like we’ve addressed the needs of Kansas City residents and the desires of the neighborhoods fairly well with these two ordinances,” Decker said. “I’ll make myself available to meet with everybody who possibly wants to quiz me about it.”
To learn more about the city’s Neighborhood Services department, visit here.
