Fayetteville seeks to extend start-up period for short-term rental operators

“The Faye Chateau” (left) off Church Avenue is managed by Cohobnb Properties and listed on Airbnb / Photo: Todd Gill, Fayetteville Flyer

UPDATE: This proposal was passed 7-0 at the Nov. 16 City Council meeting.

Anyone who rents a home in Fayetteville through sites like Airbnb and VRBO might have some extra time to get their permit without a Planning Commission hearing.

The City Council in April approved an ordinance to legalize the short-term rental of homes, which had previously been illegal.

The rules

The new rules require anyone operating a short-term rental to get a business license and a safety inspection if the rental is not in one of the city’s commercial or mixed-used zoning districts where hotels are allowed.

Short-term rentals are categorized as either Type 1 or Type 2.

Type 1 rentals are homes that the owners live in, but sometimes rent out rooms or the entire house to guests when they’re out of town. Accessory dwelling units also count as Type 1 properties.

Type 2 rentals are rented all year, and have no owners living in them.

Owners of both types must pay the city’s 2% hotel, motel and restaurant (HMR) tax, and are required to obtain vacation rental or short-term rental insurance coverage. They must also designate a representative who can be at the unit within three hours in case of an emergency.

Type 2 owners have an additional requirement, which is to obtain a conditional-use permit from the Planning Commission.

The new law includes an occupancy limit which states that a short-term rental can only house two people per bedroom plus two more.

Special events – like parties, weddings, anniversaries and receptions – are not allowed. Parking is limited to the maximum number of vehicles allowed in the underlying zoning district.

The law also states that no more than 2% of all residential units in Fayetteville can be Type 2 rentals.

Start-up period

The ordinance went into effect May 21, but the council included a six-month start-up period for operators to come into compliance without going through the Planning Commission hearing process and paying the $100 conditional-use permit fee.

That six-month deadline is Nov. 21, but city staff have asked the council to extend the start-up period by three months to Feb. 21, 2022.


City planners estimate there are between 500-600 homes being used as short-term housing for visitors in Fayetteville, but as of Oct. 15, only 240 applications had been submitted, of which 69 had been approved. Of those, 199 are for Type 2 rentals, with only 59 having been approved.

Staff said during the first few months of the start-up period, a process was established for reviewing and inspecting short-term rental units, but many applicants either did not yet have the necessary insurance or ownership documents or didn’t fully comply with building safety standards which require things like smoke and carbon monoxide detectors, fire extinguishers, and other items.

“Addressing these issues has taken weeks or months in many instances,” a staff memo stated. “Given the large number of applications still in review, totaling over 70% of the total received, staff recommends affording applicants and staff additional time through a three-month extension of the start-up period, for a total of nine months.”

City Council discussion

The council first heard the proposal to extend the start-up period at their Nov. 2 meeting.

Council members were in favor of the idea, but suggested holding off for two weeks to allow even more time to help get the word out.

The discussion will continue on Nov. 16 at the next City Council meeting.