New rules drafted for short-term house rental

New rules have been hammered out for those who rent homes to tourists in the city of Las Vegas, an industry that supporters say serves an important niche market and in some cases can work as a bulwark against foreclosure for struggling property owners.

Las Vegas last year enacted a ban on rentals of less than 31 days in areas zoned for residential use, joining Henderson and Clark County in having such a prohibition on the books.

The aim was to corral "party houses," which were rented to large groups of people who made no distinction between a residential cul-de-sac and the Strip. But many other properties were caught up in the web as well: corporate and short-term vacation rentals that don't disturb the neighbors.

"They had no idea that the industry even existed," said John Palmer, who runs Las Vegas Retreats. "Party houses and that kind of thing are a problem.

"We were unfairly associated with that activity."

After Las Vegas passed the ban, property owners and managers came forward seeking a compromise, and the City Council is set to consider a new ordinance today.

"We want to help put those down," said Cherrell Tarantino, president of Executive Locations, referring to party houses. "But you can't just obliterate an entire industry."

The amended rules would allow short-term rentals if:

• The property owner or manager obtains a permit from the city for the rental. A licensed property manager could get an annual permit for a property.

• There are no noise and parking complaints associated with the use of the property as a short-term rental.

• The property owner or manager is available at any time to respond to law enforcement or other complaints.

• Room taxes are collected from guests.

"We're getting an ordinance that makes our business legal and legitimate," said Palmer, who said he manages about 40 homes and condos. "This is a good thing all the way around."

The next step is to approach Henderson and Clark County about revisiting bans in those jurisdictions, Tarantino said.

She said her company manages about 200 properties, about 25 percent of which can be rented short-term.

"It's increasing because of the foreclosures," she added, noting that renting for shorter terms can as much as double the revenue from a house. "It's a way for people to keep their homes. It always has been."

Despite the bans, renting a house has long been an option for Las Vegas visitors, as even a cursory tour of the "vacation rentals" section of Craigslist will show.

The extent of the business is hard to pin down, said Kipp Cooper, director of governmental relations for the Greater Las Vegas Association of Realtors.

"If the City Council goes forward with a permitting process, we're going to find out," he said. "I think it's been grossly underreported."

The association hasn't taken a position on the proposed ordinance but did offer technical advice on what it could include.

"I think the city's moving forward in a very prudent way and hopefully is going to pass something that makes sense and is going to be workable for all involved," Cooper said.

Council members Lois Tarkanian and Steve Wolfson have been the ones pushing the subject because of party house complaints in their wards, both of which sit on the southern side of the city, closest to the Strip.

Tarkanian said Tuesday that she'll be watching to see whether permitting the rentals will lead to an influx of visitors in residential areas.

"I'm concerned about residential not staying residential," Tarkanian said. "If we have a problem where there's an inundation of short-term rentals in a neighborhood ... then we will look at amending the bill."