HOT SPRINGS, Ark – The City of Hot Springs’ new Short-Term Rental ordinance could mean more costs for owners and renters.

City Manager Lance Spicer says the City has been working on a set of rules and regulations for the growing business since March, finalizing plans this month.

He says the city decided to step in after several complaints were issued from neighbors in highly populated areas.

“You get the trash, you get the noise complaints and parking issues,” Spice said.

This is the first time the city has set forth guidelines for the business. They will go into effect January 4 of 2022.

Right now, Spicer says there are about 630 short-term rental spaces in Hot Springs. The new ordinance will put a cap on the number of rentals, decreasing the number to 500.

The 10-page document also outlines rules from occupancy to noise and fees for owners. In it, owners will now be required to pay an annual licensing fee per occupant.

“It’s $50 per occupant,” said Spicer.

Spicer says if the house or rental sleeps eight people, the owner will have to pay $400 per year for the license.

In the ordinance, the city also outlines a $50 annual home inspection fee and a one-time permit fee.

Dylan Driggers who manages nearly 30 properties in the city says these fees could cost owners up to $1000.

“Hot springs will become one of the biggest Airbnb short-term rental fees within the state,” Driggers said. “Honestly with that street, [short-term rental owners] may phase-out.”

That plus the 500 rental space cap, Driggers says that means there will be fewer properties to choose from for renters.

“I think it will turn into possibly a monopoly at that point where owners can jack up prices,” Driggers said.

Driggers said at least for the first couple of months, renters could be paying more per night.

He also says the number of bigger rentals could be cut down as well. In the ordinance the city puts an occupancy limit on short-term rentals, limiting it to two people per bedroom.

The city says the limit was put in place after noise complaints from neighbors.

“You were seeing some of the smaller homes in these older neighborhoods where houses were closer together, they were being rented out by 15, 12 people,” said Spicer.

Some other notable things, if you are renting, quiet hours will be starting at midnight. This means anyone that is not staying the night must be out of the rental property by that time. During the day, according to the ordinance person limits are set based on occupancy plus 50%. This means an 8-person house will be able to house 12 during the day.

The rules will go into effect January 4. The city will also open applications for new short-term rental owners then.