The Hot Springs Board of Directors will revisit the cap on vacation rentals in residential areas Tuesday night.
The board tabled an ordinance lowering the annual cap on short-term rentals in areas zoned for residential use at its June 21 business meeting. It's expected to consider an alternate version Tuesday that retains the lower cap of the original ordinance, which reduced the annual limit from 500 to 400, effective next year, and adds a provision making the board part of the appeals process.
Appellants have criticized the current process, telling the city the Board of Zoning Adjustment is powerless to consider the effect short-term rentals have on neighborhoods. The BZA hears appeals of special use permits the city issues short-term rentals in residential areas.
The permitting process comes from the STR regulatory scheme the board adopted last year in response to the growth of the vacation rental industry in residential areas and its effect on the availability of affordable housing. The alternate ordinance uses a change to the Municipal Building and Zoning Regulations Chapter of the state code to insert the city board into the appeals process.
The BZA is still part of the process under Act 930 of 2021, but its rulings can now be appealed to a municipality's governing body. Appeals of BZA actions went directly to circuit court prior to the change.
"If there's an appeal to the BZA, that would come to the board at no fee to the appellant," City Attorney Brian Albright told the board at its June 28 agenda meeting.
The process would be similar to how conditional use permits are appealed. Issued by the Planning Commission, conditional uses, or dispensations for land uses that aren't granted by right in a zoning district, are appealed to the city board.
The city's zoning code allows the board to consider how a conditional use affects other properties, whereas the BZA's review is limited to the actions of the administrative officer who issued the special use permit. The panel has denied both of the special use permit appeals it has heard this year.
An early version of the STR regulatory ordinance the board adopted last year used the conditional use process to permit STRs in areas zoned for residential use, but Albright advised that the board not be part of the appeals process.
Serving in a quasi-judicial capacity when it hears conditional use appeals, the board is prohibited from receiving or soliciting information relevant to the appeal. It can only consider what's presented in board chambers.
Albright told the board last year the prohibition on ex-parte information prevents city directors from talking to their constituents, making city government less representative and potentially requiring directors to recuse from hearings. Several have had to recuse from conditional use appeals after talking to constituents about the appeal or visiting a site where a conditional use had been granted.
He said directors would be under the same prohibition when hearing appeals of special use permits.
"You would be under the same quasi-judicial function," he told the board at last month's agenda meeting. "My advice to the board and any member of the BZA is not to have any discussions."
Conditional uses remain with a property after the land is sold, but special use permits don't transfer when ownership changes.
"We want to avoid bringing conditional use permits to the board, because a conditional use permit runs with the land," Albright told the board. "They cannot be expunged. So forever more that piece of property would have the ability to have a STR on it, because it would have a conditional use permit. We would like to stay with the special use permit process the board did last year."
The board will also consider lowering the annual cap on STR business licenses in residential areas from 500 to 400, effective next year. Nov. 1 would be the deadline for accepting special use permit applications for 2022. If there are more than 400 licenses at the start of next year, those over the cap would be eligible for annual renewal.