Daily Regulatory Notes 03/17/2025

Every day, we bring you a detailed overview of recent news and updates about primary decisions, community feedback, or legislative changes relevant to the short-term rental industry. 📰

Kentucky

Kentucky lawmakers are facing backlash over a last-minute amendment to Senate Bill 61 that strips local governments of their ability to regulate short-term rental density. The change added without public input overrides Louisville’s 600-foot spacing rule for non-owner-occupied rentals.

While the amendment still allows registration and permitting requirements, officials cannot deny applications unless rentals cause significant harm to public safety or welfare.

Houston, TX

Houston is pushing forward with a long-awaited short-term rental ordinance amid growing frustration from residents over "party houses" disrupting neighborhoods.

The proposed ordinance introduces registration fees, requires a 24-hour emergency contact who must respond within an hour, and enforces stricter rules on trash, noise, and parking. Repeat offenders could have their registrations revoked, with immediate bans for properties tied to serious criminal activities.

Ocean City, MD

Ocean City has enacted ordinance 2025-04 setting stricter short-term rental limits in residential and mobile home districts. A five-night minimum stay is required for 2025-26, increasing to a 31-night minimum in 2027.

Officials argue the measure preserves neighborhood integrity, but realtors and homeowners are fighting to repeal it. They claim the law restricts property rights and could harm tourism. A petition drive is underway, aiming to force a referendum. If 40% of registered voters sign, the city must hold a special election or delay the ordinance until the next general election.

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Fayetteville, AR

Fayetteville residents and officials are seeing the impact of stricter short-term rental enforcement with a recent investigation identifying 155 illegal properties—many concentrated in wards near the University of Arkansas and downtown.

The city’s approach includes AI-powered monitoring and a last-resort penalty of shutting off water service, though no property has faced that consequence yet. Enforcement efforts have largely succeeded in pushing illegal operators into compliance, but with the temporary compliance officer position set to expire in April, some question whether the city will maintain oversight at the same level.

Covington, KY

Kentucky lawmakers are debating Senate Bill 110 which would strip local governments of their ability to regulate short-term rentals, eliminating permitting requirements and density restrictions.

Introduced by Sen. Stephen West, the bill has sparked opposition from officials in cities like Covington and Newport who argue it could worsen housing shortages and disrupt neighborhoods by allowing corporate investors to dominate the market. The bill is advancing quickly, bypassing committee hearings in the House and potentially heading back to the Senate.

Santa Cruz County, CA

Santa Cruz County approved new restrictions on short-term rentals to alleviate the county's housing crisis. The proposed changes were unanimously approved by the Board of Supervisors requiring hosted rentals with the owner living on-site would be capped at 250 homes.

The new rules would require rental platforms like Airbnb and Vrbo to remove illegal listings or face penalties. Another rule would see landlords pay former evicted tenants six-month rent if the property becomes a vacation home after living there.

Kamas, UT

Kamas City has put a temporary freeze on new short-term rentals giving the City Council time to craft a more detailed regulatory framework. The unanimously approved moratorium includes a key amendment—a grandfather clause—allowing current short-term rental operators to continue if they obtain a business license and submit proof of operations within the next 30 days.

This decision comes ahead of the expected enactment of House Bill 256 on May 7, which grants local governments the ability to use online listings as evidence of rental activity, provided other supporting information is available.

Additionally, a new 1% transient room tax was approved for accommodations such as tourist homes and hotels. While no date has been set for the next work session, further regulatory updates are expected as the city refines its approach.

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