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City passes new rules for short-term rentals without requiring 600 feet of space between them
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City passes new rules for short-term rentals without requiring 600 feet of space between them

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Short-term Rental Regulation

Rebekah Schmitz, operator of a short-term rental on South 27th Street, says most of the people who stay in her bungalow are looking for a calm and relaxing getaway. 

Located in the middle of the woods in Hendersonville, North Carolina sits this cozy cabin. Despite the pandemic, the owners of this short-term rental say business has been booming.Donna Lyerly: "From July to December, we saw recording bookings."Keith Lyerly: "As things started opening up a little, we found that people needed to get out, they needed to get away. The month of October, we were booked every day, which is not normal." Keith and Donna Lyerly aren't the only hosts seeing a rise in bookings. Short-term rentals outperformed hotels in dozens of markets around the world in 2020, according to industry analysts. Geleen Antonio who's been traveling around the U.S. for months says she prefers to stay in a short-term rental, because of the amount of control it gives her.Antonio: "I do feel safer because I go through all the checklists, making sure they've cleaned everything and have had space in between visitors."But while more and more travelers search for vacation rentals in remote, rural locations, the demand for rentals in big cities especially ones with large numbers of COVID-19 cases has dropped.Christina Zima: "Pre-pandemic, I was managing 25 houses, and now I'm down to 12."The majority of properties Christina Zima manges are located in Silicon Valley an area that turned into something of a ghost town as tech companies transitioned to remote work allowing residents to flee to more affordable places. While her clientele used to be mostly business travelers, Zima's guests now tend to be long-term renters such as locals renovating their homes or students attending college nearby. Over the course of 2020, Zima saw her gross rental income decrease by about 60% compared to 2019. Zima: "Honestly, I don't see it getting better fast. I think it's going to take a while, at least for what we're doing." Zima says she's repeatedly run into issues with guest expectations during the pandemic.Zima: "We get a lot of people also trying to demand that we leave the house empty for three days before they arrive. Then we're just like 'OK, I guess it's not the house for you,' because we can't survive if we have to give three free nights away with every booking. That's not going to work.  AirBnB guests aren't willing to pay a deep-clean rate. I mean, deep cleaning would be $450 dollars for a regular house. Nobody's paying that for an AirBnB where they stay maybe a week or something. But they expect it to be cleaned as if it were a deep clean." But the Lyerlys who also run a short-term rental hospitality and cleaning company  say they've gotten used to people's differing standards regarding cleanliness. Donna Lyerly: "They're here to party. They are sick of being cooped up in their own home and they're just ready to relax and be on a vacation. And then we've got the people that are pulling the furniture out from the wall and pulling bed linens off to check mattresses."Either way the couple has high hopes for 2021.Donna Lyerly: "If the activity in bookings is any indication, this will be a banner year for us because we've just got a lot more activity." The data backs them up. While half of U.S. hotel rooms are projected to remain empty this year, industry analysts at AirDNA expect short-term rentals to become the primary lodging choice for vacationers as travelers seek more space and privacy. 

The Lincoln City Council on Monday approved rules governing short-term rentals that don’t require 600 feet of space between them or include occupancy limits in downtown high-rises.

The rules represent the city’s attempt to find a compromise between two groups: Neighbors who say large parties in short-term rentals create noise and parking headaches and property owners who thought the proposed rules were too restrictive.

The city decided to draft rules after the Legislature passed a law in 2019 preventing cities from banning short-term rentals, initially proposing rules that would have required that property owners live in the rentals.

The pandemic put a halt to the work, but city officials picked it up again in January and property owners made clear their opposition to the residency requirement.

The new proposed rules, approved by the Lincoln-Lancaster County Planning Commission, scrapped the residency requirement but included the 600-foot spacing rule — the equivalent of about two city blocks — for all properties except those in commercially zoned areas. That primarily includes downtown high-rises.

The proposed rules also exempted complexes with more than 100 units from the spacing requirement, though large units in both commercial and residential areas would have been limited to having no more than 10% of their units used as short-term rentals.

On Monday, City Councilman Richard Meginnis proposed two changes: doing away with the 600-foot spacing rule for at least a year and eliminating the 10% occupancy requirement for commercial high-rises. Those in residential areas would still have to abide by the occupancy limits.

Meginnis’ amendment requires that the city track short-term rental activity and review the spacing rule — or lack thereof — after a year and make changes if necessary.

Among the problems with the 600-foot rule, he said, is that it would prohibit duplex owners from using both units as short-term rentals.

Councilwoman Jane Raybould said she supported Meginnis’ amendment because of the review provision and the fact that the new rules allow the city to revoke licenses of short-term rental users if they have more than three verified complaints in a year.

The new rules require the short-term rentals be licensed annually and pay a $250 registration fee each year. 

“We are going to watch this very carefully,” Raybould said. “Over this year we are going to reassess and reevaluate.”

Raybould took issue with people who testified at last week's council meeting and suggested the 600-foot spacing rule violated the 2019 law that prevents cities from banning short-term rentals. The new law clearly allows them, she said.

“We do have the authority to come up with rules and regulations that impact our municipality,” she said.

Meginnis’ amendment on eliminating the spacing requirement passed by a narrow margin, with Bennie Shobe, James Michael Bowers and Tammy Ward voting against it.

Ward noted that the Near South Neighborhood Association supported the new rules that include the spacing requirement. She also said noise and parking problems caused by the short-term rental near one man's home prompted him to move because the city couldn't do anything without rules in place. 

The council unanimously supported Meginnis' amendment to eliminate the 10% occupancy requirement in downtown high-rises and other commercially-zoned property. And despite concerns with Meginnis' spacing amendment, council members unanimously approved the new rules.

City officials said a 4% occupancy tax — the same one hotels pay — would generate about $10,000 a year and offset the cost of electronic collection and tracking of the rentals.

Lots of questions, some concerns about proposed 600-foot spacing between short-term rentals
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'Incredible visionary and thinker' – Leader of Lincoln Community Foundation will retire this year

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Local government reporter

Margaret Reist is a Lincoln native, the mom of three high school graduates now navigating college and an education junkie who covers students, teachers and policymakers inside and outside the K-12 classroom.

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