The city of Fayetteville could shut off water service for illegal short-term rentals

FAYETTEVILLE — Violators of the city’s short-term rental ordinance could have water shut off under a proposal making its way through a City Council committee.

The council’s Code Review Committee last week discussed ways the city could impose penalties on short-term rental property owners who operate their businesses without a license.

The discussion comes as Fayetteville is rapidly approaching the citywide density cap for properties that operate year-round as short-term rentals.

The cap was set at 475 in July when the council voted to reduce the number from about 900 when city code stipulated that no more than 2% of all housing units in Fayetteville could be rented year-round.

The council in 2021 adopted regulations that classify short-term rentals as either Type 1 or Type 2. Type 1 rentals are homes where the owners live, but sometimes rent out rooms or the entire house to guests when they are out of town. Type 2 rentals are rented year-round, and have no owners living in them.

As of last week, there were 395 Type 2 rentals licensed in Fayetteville, with another 34 applications pending, said Jonathan Kurth, the city’s director of development services. So far this year, 49 applications have been approved and 16 denied, Kurth said.

An external consultant is currently investigating the number of short-term rentals operating without a licence. So far, the company has discovered 183 non-compliant short-term rentals and another 122 rentals in unknown status, Kurth said.

The commission first discussed involving the criminal court system as a penalty for noncompliance, but City Attorney Kit Williams said that process could take months and would likely only end with the property owner paying a fine.

“They can pay the fines,” Williams said. “They make enough money making mistakes so they can pay the fines.”

But even then, the city can’t control the fines. “It will be up to the judge who may not even order any fines the first two or three times he is convicted,” Williams said.

He said the best approach is to shut off water service to the home after due process.

Williams said the property owner will receive at least one warning before shutting down service. They will also have a chance to present their case to city officials.

“It’s a very powerful measure that has to be used carefully, but it will be very effective because they won’t be able to operate a short-term rental without water,” he said.

The Code Review Committee consists of four City Council members. Current makeup includes Sarah Moore, Scott Perna, Theresa Turk and Holly Hertzberg. The group is scheduled to meet again on September 12 before making a formal recommendation to the full council.

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