Eureka Springs city council considers ban on nightly residential rentals

Tuesday, September 21, 2021
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The Eureka Springs City Council is moving forward with a proposed ordinance banning tourist lodging in residential properties, despite two council members’ request for more information.

City planner Kylee Hevrdejs presented the proposed ordinance to the council on Sept. 13, saying the planning commission worked with residents on the document. The proposed ordinance states that tourist lodging is “incompatible and inconsistent use” in residential zones and would amend Chapter 14 of the city code to establish restrictions in the R-1, R-2 and R-3 zones.

Hevrdejs said she researched the issue and found that nightly residential rentals have positive and negative effects. While the rentals bring in revenue for owners and increase tourism, Hevrdejs said, they reduce the number of long-term rentals.

That has caused a housing crisis in Eureka Springs, Hevrdejs said.

“If you look at the housing data in Eureka Springs, we’re ranked third in Carroll County for the number of housing units at 1,306,” Hevrdejs said. “In reality, only a little over 1,000 are available on the market. Workers can’t find housing. When it is available, the prices are artificially inflated.”

Council member Terry McClung asked about the data, pointing to a section that states there are 476 listings in Eureka Springs. Hevrdejs said that number includes listings across all online marketing programs such as Airbnb and Vrbo, so some properties are listed multiple times. There are 299 unique rental units, Hevrdejs said.

“I find that hard to believe,” McClung said. “I find that really hard to believe.”

Council member Melissa Greene said nearly 30 percent of the community is commercial and McClung asked if all 299 rentals are single-family homes. Hevrdejs said 83 percent of the rentals are single-family homes, totaling 248.

“I still find that hard to believe,” McClung said. “How many do we have permitted?”

“Less than that,” Hevrdejs said.

“Yeah, I’d bet the CAPC doesn’t collect taxes from a dozen,” McClung said.

McClung said he’s glad the six-month moratorium on new tourist lodging in residential areas is ongoing, because he’d like to wait a bit to approve the ordinance.

“We need to be sure that we’re on solid ground whenever the ordinance comes, that we can truly resolve the problem,” McClung said.

Council member Harry Meyer asked how many conditional use permits exist.

“There are actually very few,” Hevrdejs said.

“How often do we have a reported illegal nightly rental?” Meyer asked.

“I hear things about suspected nightly rentals weekly,” Hevrdejs said. “The challenge with that is the burden of proof and how you prove they’re operating an illegal tourist rental, unless you have an Airbnb listing as evidence.”

Greene said she wouldn’t have supported the proposed ordinance a few years ago, but there are plenty of commercial properties available for nightly rentals today. She doesn’t want to take family homes away from residential neighborhoods, Greene said.

“This is a good ordinance,” Greene said.

Greene then moved to assign the proposed ordinance a number and read it for the first time, and the council agreed to do so. After city clerk Ann Armstrong read the proposed ordinance, council member Laura Jo Smole said it was a “really meaty” document and asked to have a workshop to get more information.

“I just want to make sure we’re doing the most effective ordinance that we can produce,” Smole said.

“I don’t know about having a workshop,” Mayor Butch Berry said. “I mean, if you have questions, you can always … I mean, this is going to be … we can vote on this. We don’t have to vote on all three. It’s going to take a process of over a month at least, if not six weeks.”

Planning chair Ann Tandy-Sallee said the planning commission created the proposed ordinance with the help of residents.

“I feel very comfortable with the input we got,” Tandy-Sallee said. “I feel very comfortable with the research [Hevrdejs] did. My hope is you will move forward with this.”

McClung reiterated that there’s a six-month moratorium on new tourist lodging in residential areas.

“I don’t want to rush through it, and I don’t think we’re ready for the first reading,” McClung said. “I think [Smole] is right about the workshop idea. We need to do that.”

“The planning commission has been holding workshops,” Berry said. “The city was welcome to attend all those workshops. If you have questions, you can contact [Hevrdejs] or you can ask [Armstrong]. We don’t need another workshop to go through it.”

Council member Bill Ott moved to amend a section of the proposed ordinance to state, “Each 24-hour period of any tourist lodging rental shall be considered a separate offense.” The amendment came at the request of city attorney Tim Weaver.

The council then voted to approve the proposed ordinance on its first reading.

Also at the Sept. 13 meeting, Berry presented two resolutions to lease property used by the city. The courthouse lease agreement states that the city will lease the courthouse from the county, paying $24,744 annually for five years beginning Jan. 1, 2022. The city will maintain the lower level of the courthouse, the agreement states, while the county will take care of the second and third floor.

The parking lot lease agreement states that the city will pay the county $23,000 annually for five years beginning Jan. 1, 2022, to lease the courthouse parking lot. The council approved the two resolutions allowing Berry to enter into the agreements.

In other business, the council approved a proposed ordinance establishing protocol for removing city commission members on a first reading, as well as a proposed ordinance for the annual property tax levy on first and second readings.

The council’s next meeting is scheduled for 6 p.m. Monday, Sept. 27, at the Auditorium.

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