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Airbnb owners are suing Kansas City to block restrictions on short-term rentals

A woman browses the site of US home sharing giant Airbnb on a tablet in Berlin on April 28, 2016.
(John MacDougall/AFP/Getty Images)
John MacDougall
AFP/Getty Images
Kansas City passed stricter rules on short-term rentals like Airbnbs in May.

The Kansas City Council passed stricter rules on short-term rentals last month to crack down on unlicensed Airbnbs. The rules include prohibiting some Airbnbs in residentially zoned neighborhoods.

A group of short-term rental operators is suing Kansas City over new rules restricting Airbnb locations and operations.

The lawsuit was filed in the U.S. District Court for the Western District of Missouri on Friday, and comes about a month after the Kansas City Council passed new laws overhauling the short-term rental program in an effort to rein in unruly Airbnbs and prevent unlicensed rentals. The lawsuit includes 31 plaintiffs who applied for short-term rental permits they allege Kansas City never processed. The plaintiffs are asking the court to block the new rules, which are set to go into effect June 15.

The lawsuit also alleges the new rules violate property rights under Missouri law and the plaintiffs’ due process rights.

The city declined to comment.

Since the city passed these new rules, it paused new permit applications for short-term rentals, according to a message on CompassKC, the city’s online permitting site.

Under the new rules, it's illegal for an operator to advertise their short-term rental on a site like Airbnb or VRBO without listing a registration number. Listings in violation will be taken down.

The city increased fines for operators breaking city rules from $150 to a minimum of $200 and a maximum of $1,000 per day of violation.

The ordinances transfer oversight of short-term rentals from City Planning and Development to Neighborhood Services. They also prohibit short-term rentals in neighborhoods zoned as residential if the owner does not live on the property. If a short-term rental site changes ownership, the registration is no longer valid, requiring the new owner to get a new permit.

All short-term rental operators already licensed with the city will be grandfathered into the new system, including those who do not live in their short-term rentals located in residentially zoned areas.

The lawsuit says the plaintiffs applied for a short-term rental permit from the city before the new rules were passed, and had made “substantial investments” in their rentals.

Sandra Swearingen, one of the plaintiffs, co-owns an Airbnb in Waldo. She owns another property in Hyde Park she hopes to rent out, but says her permit application to the city was denied last month because the short-term rental was located in a residentially zoned neighborhood.

She says the city’s new rules are unfair and will eliminate short-term rentals from the city entirely.

“I'm happy to comply with any registration requirements or rules around the property itself,” Swearingen said. “I just think that doing an all-out ban on non-owner-occupied short-term rentals and residential zones is just excessive. It punishes those of us who have been following the rules all along.”

Swearingen says she purchased the Hyde Park property to turn it into a short-term rental. She says operating short-term rentals makes up a big part of her income.

“Most of us short-term rental owners, we are just trying to make a living,” she said. “We're not being disruptive and we're just asking for, one, delaying enforcing the new regulations and two, due process to process the applications that were already submitted.”

The rule changes came after a city audit that found 93% of short-term rentals in Kansas City were unlicensed and skirting city laws. Updated numbers from April found that only 19% of short-term rentals were licensed.

Many residents complained about the abundance of unruly and unregulated Airbnbs in their neighborhoods.

“My philosophy is that a home should be a home and it's not lodging,” said Kate Barsotti, president of the Columbus Park Community Council.

Barsotti has supported the city’s stronger rules for Airbnbs. She’s concerned about the lawsuit potentially reversing the new rules.

“I should know what I'm signing up for in my neighborhood,” she said. “I should know that if I'm in a block with homes, that they're gonna be homes. If anything can be turned into a business, I really don't know where I live.”

As KCUR’s Missouri politics and government reporter, it’s my job to show how government touches every aspect of our lives. I break down political jargon so people can easily understand policies and how it affects them. My work is people-forward and centered on civic engagement and democracy. I hold political leaders and public officials accountable for the decisions they make and their impact on our communities. Follow me on Twitter @celisa_mia or email me at celisa@kcur.org.
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