Own a short-term rental in Lexington? Register before deadline or face these fines
Few short-term rental operators have paid registration fees with the city of Lexington despite a looming deadline to do so, data provided Tuesday shows.
Short-term rental operators caught without appropriate licenses and city sign offs could face penalties of $500 per day.
Only 63 short-term rental operators have applied for a license to operate in Lexington. Yet there were 895 short-term rental properties in Fayette County on at least one short-term rental website, like Airbnb or VRBO, last week, according to city officials.
Current short-term rental operators must also receive a zoning compliance permit.
To date, only 250 have done so, said Wes Holbrook during a Tuesday Lexington-Fayette Urban County Council Budget, Finance and Economic Development Committee meeting. Holbrook is the city’s director of revenue, which oversees collection of license fees.
Those zoning compliance permits are for existing short-term rentals. Twelve new short-term rentals have also applied to the city’s Board of Adjustment; nine have been have approved, according to city officials.
Some of those zoning ordinance compliance permit hearings at the city’s Board of Adjustment have been contentious as many neighbors have pushed back against short-term rentals for a variety of reasons.
It was complaints from neighborhoods that drove the city to enact short-term rental regulations.
In July, the Lexington-Fayette Urban County Council passed comprehensive short-term rental regulations after years of debate. Most cities of similar size or larger have had short-term rental rules and regulations on the books for years.
The ordinance allowed current short-term rental operators nearly six months to get into compliance with the new regulations.
The ordinance requires short-term rental operators to register and pay registration fees of $200 for the first short-term rental and $100 for each additional property by Jan. 11. To get a special license fee, operators must show they have a zoning compliance permit.
In addition, operators must have a business license.
Citations for operating a short-term rental without a special license fee can be upwards of $500 a day, Holbrook said.
“It’s much easier to be registered and be in compliance on the front end,” Holbrook said.
If an operator is operating without proper city permits and then later applies for one, the city can also deny that operator’s license.
Holbrook warned existing short-term rental operators who have yet to file for the zoning compliance permit that the process will take time, particularly considering the upcoming holidays.
Those who do not have a zoning compliance permit should not operate until they receive all city sign offs, Holbrook said.
“We don’t have a lot of information on who these operators are,” Holbrook said when asked about outreach to short-term rental operators during Tuesday’s committee meeting.
“There have been estimates of upwards of 1,200,” Holbrook said, saying there are some people who rent their homes only during certain times of the year, such as during Keeneland race meets.
In addition, if an operator has a limited liability corporation and makes more than $50,000 in gross revenue, they must pay the city’s 2.25% occupational taxes on those earnings.
Complaints, enforcement
The city will have to ramp up its compliance and complaint monitoring after Jan. 11.
Holbrook said the city is buying software programs to help it monitor short-term rental compliance. Fees from short-term rental operators will help pay for that software.
However, Holbrook said that software will not be available until spring. Holbrook said they have other ways of identifying operators in the meantime.
The city is also working to increase communication within city divisions such as building inspection, the police department and code enforcement to deal with an increase in complaints.
Holbrook said there is an appeals process for any operator who loses their license.
Councilman James Brown said Tuesday the council will likely review the registration, fees and complaint process in April.
Short-term rental operators should visit lexingtonky.gov.com/short-term-rentals for more information and to download application forms.
