🎯 STRisker: Bulletin - Fayetteville, AR

Supreme Court Sides with Fayetteville in Short-Term Rental Showdown

The long-brewing legal fight over Fayetteville’s short-term rental (STR) ordinance reached a major milestone this week. On Thursday, October 24, the Arkansas Supreme Court sided with the city, ruling that a lower court judge acted properly when he refused to halt enforcement of Fayetteville’s STR ordinance while a lawsuit by Texas homeowners Stephen and Shelley Hause continues.

In a narrow 4–3 decision, the justices backed the city’s position that the ordinance should remain in effect, reaffirming Circuit Court Judge Doug Martin’s August 2024 ruling. The Hause couple, who live in Round Rock, Texas, own a Fayetteville property near Old Farmington and One Mile roads. Their request to operate the home as a short-term rental was denied last year by the Planning Commission after officials determined that the neighborhood already had too many STRs under city code.

Associate Justice Cody Hiland, writing for the majority, said the court found no abuse of discretion by the lower court, meaning the injunction denial stands. Simply put, the homeowners hadn’t shown “irreparable harm” or a high likelihood of winning their case. While the administrative appeal portion of the case was dismissed without prejudice—leaving the door open for further local challenges—the broader ordinance remains firmly in place.

STRisker Government Office Dashboard

Trying to keep up with the main players in the STR game? Know your councilmembers, commissioners, committee chairs, and key staff that are part of the process.

Create Your Watchlist - 14 Day Free Trial

Fayetteville’s STR framework, adopted in 2021, requires hosts to secure business licenses, undergo building safety inspections, and pay hospitality taxes. Type II operators (those without a full-time resident) must also obtain conditional use permits, a process that has led to frequent disputes and, in this case, a legal showdown. The city capped its STR licenses at 475, which are now fully issued.

Justice Nicholas Bronni’s dissent, joined by two colleagues, argued the ordinance was “unconstitutionally vague,” criticizing terms like “frequency and concentration” of STRs for lacking measurable standards. He contended the court should have more directly addressed whether those provisions unfairly restrict property owners.

Despite the dissent, the ruling is a significant victory for Fayetteville officials, who say the ordinance balances property rights with neighborhood preservation. For now, the city’s STR rules stand—solidified by the state’s highest court—and the broader question of how far local governments can go in regulating the short-term rental industry continues to unfold in Arkansas.

City of Fayetteville, Arkansas

A short-term rental (STR) is the leasing out of a furnished residential dwelling on a short-term basis, less than 30 days. Fayetteville City Council voted, unanimously, on April 20, 2021 to enact legislation to regulate STRs throughout the city.

City of Fayetteville ArkansasGovernment Websites by CivicPlus®

👍 We’d love your feedback.
We're always looking for ways to improve Bulletins.

Was this one useful to you? Other topics you'd like to see get covered?

✉️ Just reply directly to this email. We read and respond to every message!

-Will McClure
🙋 P.S.
Know someone else who should be reading this Bulletin? Feel free to forward this along. We want to make sure operators and stakeholders are aware of regulatory changes in their area.