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Property owners look toward short-term rentals

Property owners look toward short-term rentals

May 13th, 2018 by Nicole Roberts in Local News

Now that operating short-term rentals is legal in Jefferson City, property owners are lining up to receive the proper permits.

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The Jefferson City Planning and Zoning Commission approved four property owners' requests for special exception permits Thursday to operate short-term rentals, which will go to the Jefferson City Council for final approval June 18. These were the first short-term rental special exception permits since the Jefferson City Council legalized operating short-term rentals in January.

City staff sent out about 10 letters to property owners they had identified as operating short-term rentals following the city code change and had received only four responses, Jefferson City Senior Planner Eric Barron said.

There were about 20 properties listed on Airbnb as of Friday, many of those stated they were only for the solar eclipse that occurred last August.

Under the ordinance, a property owner can offer a short-term rental where someone rents a residence for less than one month. A property owner also could rent out a lodging room where someone could rent a single room or basement for less than a month. Short-term lodging room rentals cannot have multiple rentals in the same residence.

A new local experience

The four property owners Thursday night had varying reasons for offering their properties as short-term rentals, but many noted it would give guests a different experience than that of a hotel as guests could have a more local experience.

Mary "Missy" Creed said hotels sometimes can feel too "cookie-cutter," and short-term rentals would be a relief from that. The commission approved her and Joseph McFerron's special exception permit application to operate a short-term rental of a lodging room at 1632 Tanner Bridge Road.

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When hosting guests, Creed and McFerron do little extra things they think set them apart from hotels, like giving guests small gifts around the holidays, offering local magazines, providing a blog with details of Jefferson City, and stocking a toiletries cabinet.

"It gives people coming here a more local experience because they're staying in an actual house than a hotel that is very cookie-cutter, and also, typically in my case, they're meeting locals and talking to locals who live here. Whereas, if they were in a hotel, they might not have a very long conversation with someone who actually lives here," Creed said.

After using lodging website Airbnb herself several times, Creed said they wanted to rent out their spare bedroom to make a little extra money. In the last year, they had about 12 visitors stay with them.

Creed said they would limit the number of simultaneous guests to three.

City code states a maximum of five unrelated people or an unlimited number of related individuals can stay in a short-term rental at one time.

The commission also approved a special exception permit for 412 Cherry St., owned by Gerardo and Staci Cornejor. The couple averaged 10-15 guest stays a month, Gerardo said.

The Cornejors, who have stayed as Airbnb guests before, originally requested allowing six adults in the rental to help offset the cost of cleaning the home. But after speaking with the commission and city staff, the Cornejors agreed to advertise for only five adults in compliance with city code.

The commission received a letter stating there had been issues of parties in the neighborhood. Gerardo said while Airbnb is based on a rating system — hosts rate guests and vice versa — this guest was new to the website and did not have reviews. He later learned from a neighbor there was a party. Since then, he said, he looks carefully at each guest's reviews.

"You can control who stays in your personal house," Gerardo Cornejor said, adding this was the only bad experience they have had.

Property owners cannot use short-term rentals for receptions, parties or weddings, under city code, and all four property owners said they would not allow these types of events. Properties still would be subject to the city's noise ordinance.

Brad and Julie Fitzmaurice plan to use 134 W. Circle Drive as a short-term rental to help offset the cost of the home. They plan to rent out the home to a maximum of four guests.

Julie said she thinks short-term rentals offer a unique, convenient experience for those traveling to or through Jefferson City.

"I love Jefferson City, and I think people love to come here," she said Thursday before the commission approved her permit. "I think it's a good thing for Jeff City. We have people in and out of here from everywhere, going to the lake, going through Jeff City, state track meets, people coming to go look at college at Lincoln (University) and our lawmakers who might enjoy a short-term rental."

The Planning and Zoning Commission also approved a special exception permit for Mike and Lisa Yungbluth, who plan to use the three units of their triplex at 1001 W. High St. as short-term rental units. They plan to limit the number of people for the unit to three or four individuals.

Mike noted someone currently is occupying the third unit long term, but this may be used as a short-term rental in the future. If property owners receive special exception permits for short-term rentals, they can use their homes for both short-term and long-term stays, not just one or the other, Barron said.

With Lincoln University's graduation Saturday, Airbnb experienced a 180 percent spike in guests in Jefferson City, Airbnb Midwest spokesman Ben Breit said, with an anticipated 70 Airbnb guests this weekend.

Jefferson City saw 1,100 Airbnb guests in 2017, averaging about 90 per month. These numbers might be inflated due to a spike in Airbnb guests near the time of the solar eclipse, Breit said.

City staff plans to keep reaching out to property owners operating short-term rentals without special exception permits to get them into compliance with city code.

Barron estimated Jefferson City would have only about a dozen short-term rentals for a while until the market grows.

Impact on hotel industry

While short-term rental property owners said the industry could impact tourism and showcase the city, the state's hotel and motel industry is worried these rentals will impact their occupancy rate. Every room rented in a short-term rental is one less room rented at a hotel or motel, said Trey Propes, Missouri Hotel and Lodging Association board president.

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Until there are several short-term rentals, Propes and Barron said, they do not believe the rentals will impact the hotel industry tremendously.

A lack of a level playing field was the primary reason for Propes' opposition.

If renting out a room, property owners must pay the city's 7 percent lodging tax and obtain a business license, according to city code. Short-term rentals also must adhere to the city's building and fire code inspection requirements.

However, hotels and motels must follow stricter fire and building rules, Propes said. Hotels are considered commercial entities and must follow commercial rules while short-term rentals operate out of residential homes, Barron said.

"(Hotels) have to have a monitored fire system to ensure guest safety, and they have to be inspected by the Department of Health to ensure guest safety, so a lot of these things are safety items that (short-term rentals) won't have to do, hurdles they won't have to jump through," Propes said. "A level playing field is really all that anybody should ask for. If I open up a restaurant in my home, are they going to make me go through health inspections? Are they going to make me go through all the hoops that a restaurant downtown has to do? I bet they do. What's different about a hotel?"

If there was a level playing field, Propes said, he and many hotel owners would be content with short-term rentals.

Over the last couple of years, Missouri legislators have tried to regulate short-term rentals to help level the playing field. Missouri House Bill 2457 would regulate these rentals and was sent to the Legislative Oversight Committee for review in March. There has not been any activity on the bill since, according to the Missouri House of Representatives' website.

Brittney Mormann, Jefferson City Convention and Visitors Bureau communications manager, said she thought there always would be customers for both short-term rentals and hotels because "you have travelers that want the amenities and flexibility a hotel offers, and you have some individuals who stay at a short-term rental because they provide a more home-like atmosphere but don't necessarily offer the services that a hotel does."

Safety was also a top concern for Propes. News outlets have reported illegal activities like drug activity and sex trafficking at short-term rentals on the East and West coasts, he said.

"If someone is cooking meth in my hotel, if someone's doing inappropriate things, illegal things, within a hotel, you may not catch them all but at least there's a desk clerk there for the safety of, if not for the guest doing the bad thing, but for the rest of the guests," Propes said. "But there's nobody at a short-term rental, and that's the one safety aspect hotels can hold on to and promote that a short-term rental can never deal with."

Since property owners tend to be invested in their properties, Barron said, the city hopes short-term rentals will not experience illicit activities. Guests and hosts seem to take the Airbnb rating system seriously, which could deter inappropriate activities, he added.

If there is illegal activity at one of the short-term rentals, he added, someone can call the Jefferson City Police Department to investigate.

If a property owner violates the short-term rental ordinance, he or she could be fined up to $1,000 and/or be imprisoned up to three months.

If the police department find signs of illegal activities or the city's code enforcement officials decide property owners have violated their special exception permits, the property may face revocation of their permits.

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