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Little Rock Short Term Rental Regulation: A Guide For Airbnb Hosts

Little Rock, Arkansas

Starting a Short Term Rental Business in Little Rock

In June 2023, the Little Rock Board of Directors approved a new ordinance establishing comprehensive regulations for short-term rentals (STRs) like Airbnb and VRBO properties5. The ordinance aims to create a balanced regulatory framework that allows STRs to operate legally while preserving neighborhood character and addressing potential issues that may arise from their proliferation6.

Key provisions of the ordinance include456:

  • STR operators must obtain a business license through either a special use permit (for owner-occupied properties) or planned zoning development (for non-owner occupied properties). This is to ensure STRs meet zoning and safety requirements.
  • The total number of STR licenses is capped at 500 citywide to manage the overall scale and density of short-term rentals in residential areas.
  • Operators must pay an annual inspection fee of $500 to cover the city's costs of administering the program and conducting necessary inspections.
  • Three verified complaints related to an STR property within a calendar year can result in revocation of the operator's business license, providing a mechanism to address repeated problems.
  • Existing STRs that were active when the ordinance passed in June 2023, estimated to number around 300, can continue operating but must obtain the proper permit within a grace period. This allows current operators to come into compliance.

The ordinance was carefully crafted over a two-year period with extensive input from various stakeholders including STR hosts, neighbors, housing advocates, and the tourism industry. The goal was to strike a delicate balance between supporting the economic benefits that STRs provide to hosts and the city, while mitigating potential adverse impacts on housing affordability, neighborhood character, and quality of life69.

However, some STR hosts feel the regulations, particularly the $500 annual licensing fee, are overly burdensome and could put them out of business57. The city maintains that the fee is necessary to properly administer the program and is not out of line with other business licensing costs. How strictly the ordinance will be enforced remains to be seen.

Short Term Rental Licensing Requirements in Little Rock

To legally operate a short-term rental in Little Rock, hosts must obtain a business license and pay an annual inspection fee of $50045. The city is limiting the total number of STR licenses to 500 to manage the density and distribution of short-term rentals146.

The licensing process differs based on whether the STR is the owner's primary residence or not468:

  • Owner-occupied STRs (where the owner's primary residence is on the same property or within 1500 feet): Approved through a special use permit granted by the Planning Commission.
  • Non-owner occupied STRs: Require a planned zoning development approved by the City Board of Directors.

Existing STRs that were active when the ordinance passed in June 2023 can continue operating but must obtain the proper permit within a grace period69. If no permit application is submitted or approved, the property must revert to its prior use4.

In addition to zoning approval, STR properties must pass a city inspection covering building safety, smoke detectors, fire extinguishers, and other basic requirements before a license is granted8. Inspections are valid for one year and must be renewed annually along with the business license.

Required Documents for Little Rock Short Term Rentals

To apply for a short-term rental business license in Little Rock, hosts need to provide the following documentation8:

  • Property owner name, address, phone number and email
  • Rental property address, parcel number, and type (single-family, condo, etc.)
  • Proof of $500,000 in short-term rental liability insurance
  • Number of rentable units and bedrooms
  • Parking plan showing required off-street parking spaces
  • Floor plan indicating rooms to be rented, locations of smoke/CO detectors and fire extinguishers
  • Signed affidavit agreeing to comply with all provisions of the STR ordinance

For multi-unit buildings, no more than 25% or 2 units, whichever is greater, can be licensed as STRs8. This is to ensure buildings remain primarily long-term residential.

All documentation must be re-submitted each year to renew the STR business license. If any of the required information changes during the license term, hosts must notify the city within 30 days8.

Little Rock Short Term Rental Taxes

Short-term rentals in Little Rock are subject to the city's hotel tax of 4% on gross receipts from stays of less than 30 days4. This is in addition to state sales and tourism taxes totaling 9.5%9.

STR operators are responsible for collecting these taxes from guests and remitting them to the proper state and local tax authorities on a monthly basis49. Failure to collect and remit taxes is a violation of the STR ordinance and can result in fines or license revocation.

Revenue from the 4% city hotel tax on STRs will be allocated to support Little Rock's travel and tourism promotion efforts, as well as to offset city costs of administering the STR program46. This tax is seen as a way for STRs to contribute to the tourism economy from which they benefit.

Little Rock Short Term Rental Operating Rules

In addition to licensing and tax requirements, Little Rock's STR ordinance establishes operating standards that all licensed properties must follow456:

  • No private parties, special events, or commercial activities other than lodging allowed
  • Maximum occupancy limited to 2 people per bedroom plus 2 additional (e.g. 2 bedrooms = 6 guests max)
  • Minimum 2 off-street parking spaces required, more in certain zoning districts
  • Quiet hours between 10pm and 7am, no excessive noise audible off-property at any time
  • Property must be kept clean, safe, and in good repair with no visible trash or debris
  • STR license number, owner contact info, and a copy of STR rules must be posted inside the unit
  • STRs in multi-unit buildings limited to 25% of units or 2, whichever is greater
  • Rentals must be for a minimum of 24 hours, no hourly rentals allowed

Three confirmed complaints to the city related to a particular STR property within a calendar year can result in fines, license suspension, or revocation56. This "three strikes" policy aims to prevent licensed STRs from becoming a chronic nuisance.

The ordinance also prohibits any property with unresolved city code violations or unpaid fines from being licensed as an STR4. This is to ensure STRs are not negatively impacting neighborhoods by violating building, zoning, or property maintenance codes.

Does Little Rock Strictly Enforce STR Rules?

While Little Rock's STR ordinance sets clear licensing requirements and operating rules, questions remain about how strictly they will be enforced in practice. The city seems to be aiming for a balanced approach - allowing STRs to operate legally while establishing guardrails to protect neighborhood character and quality of life7911.

The $500 annual licensing fee is a potential barrier, with some hosts arguing it's excessive and could force smaller operators out of business57. City officials maintain the fee is necessary to cover costs of administering and enforcing the program.

Enforcement is likely to focus on egregious or repeat violations related to noise, over-occupancy, parking, and other neighborhood impacts. With an estimated 300 STRs already active before the ordinance, the city recognizes it will take time to bring all into compliance9.

Compared to some tourist hotspots in Arkansas that have banned or severely restricted STRs, Little Rock's approach is relatively permissive711. The city spent over two years engaging stakeholders to craft a compromise69. But some hosts worry the ordinance still goes too far.

Time will tell if Little Rock struck the right balance as the new STR rules phase in. The city has said it's open to revisiting provisions that prove too onerous6. But blatant scofflaws could face escalating fines, license revocation, and court action.

Hosts should carefully review the ordinance and educate themselves on all requirements. Compliance is critical to running a successful STR business and being a good neighbor. Those who make a good faith effort are likely to find a path forward in Little Rock's emerging STR landscape.

How to Start a Short Term Rental Business in Little Rock

If you're interested in starting a short-term rental in Little Rock, here are the key steps:

  • Determine if your property is eligible for STR use under current zoning rules. You may need to consult with the Planning Department.
  • Evaluate your property for compliance with building and safety codes. Make any necessary repairs or upgrades.
  • Obtain at least $500,000 in short-term rental liability insurance and provide proof to the city.
  • Complete the STR business license application with all required documentation and submit with $500 fee.
  • Schedule the city's required life-safety inspection and make any additional improvements identified.
  • Furnish and equip the rental to meet all standards in the STR ordinance, including posting required notices.
  • Create a detailed listing on Airbnb, VRBO and/or other STR platforms. Be transparent about license, rules, etc.
  • Implement a system to collect and remit all applicable state and local taxes on a monthly basis.
  • Carefully screen potential guests and establish clear rental agreement terms aligned with city rules.

Be a responsible host and good neighbor. Respond promptly to any complaints and maintain open communication with the city and community.

Who to Contact in Little Rock about Short Term Rental Regulations and Zoning

For questions about Little Rock's short-term rental regulations, business licensing, zoning, or complaints, contact:

Planning and Development Department

Little Rock Fire Department

Little Rock Treasury Management Division (for tax collection)

What do Airbnb Hosts in Little Rock Think About the New Regulations?

As the new ordinance takes effect, reactions from Little Rock STR hosts have been mixed. On the Bigger Pockets forums, one host called the $500 annual licensing fee "outrageous" and said it will "kill" their small hosting business15. Another Reddit user expressed confusion about differences in how owner-occupied and non-owner occupied STRs are permitted11.

However, a Real Estate Guys forum post described Little Rock as a "hidden gem" market for both short-term and long-term rentals, noting the new regulations provide helpful clarity compared to the prior gray area19. The author felt the city was aiming for a reasonable balance between supporting STRs and protecting long-term housing.

As the rules phase in, local host forums will likely feature ongoing debates about compliance hurdles, enforcement practices, and impacts on STR businesses and the broader community. Hosts should follow these discussions while doing their own due diligence.

Some see the regulations as growing pains in Little Rock's emergence as a tourism destination69. With landmarks like the Clinton Presidential Center and renowned arts and culture scene, demand for STRs is expected to remain strong, at least in prime areas.

Hosts who educate themselves, comply with the new rules in good faith, and strive to be responsible community members stand the best chance of thriving long-term in Little Rock's STR market. While not perfect, the regulations appear to offer a viable path forward for STRs as part of the city's lodging and economic development mix.

In summary, Little Rock has joined a growing list of cities adopting STR regulations in an effort to allow but not unrestricted this emerging lodging category. The new ordinance creates a legal framework for STRs to operate but with clear licensing requirements and operating standards aimed at minimizing neighborhood disruption.

While hosts are split on whether the rules go too far or not far enough, the city maintains it struck a reasonable compromise after an extensive 2-year stakeholder engagement process. As the ordinance phases in, all sides will be closely watching its real-world impacts.

Responsible hosts who take the time to understand the new rules, obtain proper licensing, pay their fair share of taxes, and strive to be good neighbors will be best positioned for STR success in Little Rock. The city seems committed to finding a balanced approach that harnesses the economic benefits of STRs while protecting its neighborhoods and residents.

Reveal your property’s rental profitability

Buy this property and list it on Airbnb.