Short-term Rental Policies, Rules and Regulations
Applications for new short-term residential (STR) rental business licenses within the City of Hot Springs will be available on Jan. 3, 2022. This abeyance is in place to allow for implementation of an online portal in connection with the application process for the licenses, as well as the compliance with the STR policies, rules and regulations.
Purpose of STR Regulations
The purpose of the STR regulations, as outlined in Ordinance No. 6399 and in summary below, is as follows:
- Provide a licensing system and operational requirements to minimize negative secondary effects of STR use on surrounding neighborhoods, while also preserving neighborhoods’ character
- Address traffic, noise and density issues
- Ensure health, safety and welfare of neighborhoods, as well as of STR renters, occupants and guests
- Impose limits on the number of licenses issued to ensure long-term availability of the affordable housing stock
- Set regulations to ensure enforcement of these standards, and collection and payment of fees and applicable taxes
STR Business Licensure
STR owners must maintain a Short-Term Residential Rental Business License at all times, and agree to collect and remit all applicable taxes on all pertaining gross receipts. The STR license must be displayed in a prominent location within the interior of the STR; a copy must also be provided for each responsible tenant. The license number must also be prominently displayed on the following: each online advertisement, sign, circular, card, telephone book or newspaper ad representing the STR.
Business License Fees
The initial and subsequent annual STR fee/occupation tax is based on the maximum overnight occupancy authorized by the STR license.
STR licenses issued during any part of any calendar year must be renewed the succeeding year. Annual License fees are due on January 1. Late fees will apply.
Each STR license application must:
- Identify the name, address, phone number and email contact information of the local contact person.
- Include a floor plan that labels each room and the structures of the property, including the total square footage of living space; number bedrooms and the square footage of each; and the number of required off-street parking spaces.
- Provide the City of Hot Springs Certificate of Occupancy. One of the purposes of the Certificate of Occupancy inspection is to ensure compliance with all applicable fire and building codes, including the Hot Springs Fire Prevention and Building Code (HSC 15-7-1 et seq) and the Swimming Pool and Spa Code (HSC 15-3-1 et seq), in order to receive a required certificate of occupancy from the City.
- If the proposed STR site is in Zoning Districts R-1, R-2, R-3, R-4 or R-L, the applicant must obtain a valid special use permit, issued by the City's Planning and Development Director.
- Be accompanied with all required annual fees. The applicant must renew and/or amend the license if there is a change in any fact stated in the application. The annual license fee cannot be prorated for any portion of the calendar year.
Maximum Number of STR Licenses in Residential Zones
The maximum allowable number of STR business licenses for sites located within Zoning Districts R-1, R-2, R-3, R-4 and R-L, other than a horizontal property regime, shall not exceed 500 per calendar year. The renewal of existing licenses will be given priority over initial applications for new STR sites.
A separate STR Business License must be obtained for each separate STR unit, including every separate STR site that is advertised. Such an STR License will authorize the licensed owner to transact and carry on transient use of residential property only at the specified location, and in the manner and subject to the limits designated in each specific license.
STR licenses are not transferable to other persons or locations, except for the following:
- Amendments to any information provided on the license that are made within 30 days of any change of owner, a change of the owner representative, a change in the local contact person, a change in any material fact upon which the license was issued or if any other person acquires an ownership interest in the STR site.
- In the event that STR ownership transfers to an immediate family member by means of a gift or testamentary transfer, the new owner of the property shall also acquire ownership of the existing short-term rental license until its expiration without paying additional fees. The new property title owner shall, within 30 days of transfer of ownership of the transient rental site, update the information provided on the license issued via an online portal established by the City and on the City's website, and shall provide all information and prerequisites required therein.
License Denial, Suspension or Revocation
The City Manager or his/her designee may deny any application for an STR business license, or suspend or revoke a license, as a result of a failure to comply with the STR requirements. Continuing to advertise for or operate any type of STR in the City of Hot Springs without a business license may result in the forfeiture of the certificate of occupancy for such use.
Any applicant or license holder whose license has been revoked will be ineligible for a two-year period from applying for a new license.
Failure to comply with any of the STR provisions shall be subject to the following fines, penalties and forfeitures:
- $1,000 for the first offense or violation
- $2,000 for the second offense or violation
- $4,000 for each subsequent offense or violation
- If a prohibited action continuous in respect to time, the fine or penalty for allowing the continuance shall be $500 for each day it is unlawfully continued
For more detailed information, read the full Ordinance No. 6399 relating to Short-Term Residential Rental Businesses within the City of Hot Springs from the Oct. 5, 2021, Board of Directors meeting.