Fayetteville council denies short-term rental permits on Fletcher Avenue

A row of new townhomes is shown on Fletcher Avenue in Fayetteville. Several owners of units in the row were recently denied permits to operate the homes as short-term rental businesses. (Todd Gill/Fayetteville Flyer)

The owners of two new homes on Fletcher Avenue will not be allowed to use their dwellings as short-term rental businesses.

The City Council on Tuesday voted 7-1 to deny separate appeals from the owners to approve their conditional use permits, which were both rejected by the Planning Commission in March.

The property previously included two single-family homes, but was rezoned in 2020 to allow both houses to be demolished and replaced with five two-story townhomes for a total of 10 units.

Shortly after being sold, the owners of two of the units applied for a short-term rental business permit, but were denied by the Planning Commission. A third owner’s request for a permit was later denied, but has not yet been appeal to the council.

Planning commissioners last month expressed frustration about the requests, saying that the plan for the homes was originally touted as an affordable housing development that could provide workforce housing at a time when the city is facing a shortage of homes.

At least a dozen neighbors spoke against the requests on Tuesday. Some made bait-and-switch comments similar to those of the commissioners, but others complained that since being built and sold, the units have sat mostly empty, sometimes with trash cans and recycling bins strewn across the sidewalk and curb for days after being emptied.

One person who lives in one of the new Fletcher townhouses said there are only two units with full-time residents. He said he’s spoken to the owners of several of the other units and was told they may also seek permits for short-term rental businesses.

The other full-time resident of the units said before moving to Fayetteville, she lived near downtown Bentonville where there were numerous short-term rentals being operated in a residential neighborhood. She said in a situation like that, the onus is on the full-time residents to keep track of the problems that arise when out-of-town investors are not around to take care of their property. It’s a burden that the residents should’ve have to bear, she said.

Councilmember Holly Hertzberg, who cast the only vote in favor of the appeals, said the homeowners shouldn’t be held responsible for claims made during the rezoning process.

“I think it is very unfair to blame the property owners for a promise broken by the developer,” said Hertzberg.

Mike and Christy Scott of Little Rock own one of the units that was denied a permit. They purchased their unit in November, and said the plan was to stay there when they’re in town and operate it as a rental business in the meantime to supplement the mortgage cost.

Mike Scott said he knows affordable housing is an issue in Fayetteville, but Fletcher Avenue is so close to the Washington-Willow Historic District that it doesn’t make sense to expect homes there to be inexpensive.

Six of the 10 new townhomes on Fletcher include three bedrooms and sold for an average of $506,666, according to Washington County property records. The other four units include two bedrooms and sold at prices ranging from $370,000 to $400,000.

“It is one of the most coveted places,” said Scott. “To me, that it was ever considered affordable housing…is a little beyond my comprehension.”

Christy Scott said without the ability to use their unit as a short-term rental, she and her husband’s options are significantly limited.

“I don’t know how it’s going to be affordable now, even for a long-term renter,” Scott said. “How do you make that affordable as a long-term rental?”

Scott said it’s frustrating to get this far only to be rejected.

“We did this because we want to be in this community, and now we can’t pursue our American dream,” she said.

Councilmember Sarah Bunch, who is a local real estate agent, said there is a risk someone takes when they purchase a dwelling if the plan is not to live in it since people don’t have any inherent right to convert a residential home into a business.

“I think it’s unfortunate for the people who bought these thinking they could use them as short-term rentals,” said Bunch. “But I don’t think we’ve prevented them from using their property.”