Owners of short-term rentals, like those posted on sites like Airbnb, will now have to get a business license to continue operating in Auburn.

During Tuesday night’s City Council meeting, the Council approved an ordinance creating a category for business licenses specifically for short-term rental owners. Short-term rental owners in approved zones will have to pay a business license fee of 0.25% of the total revenue generated by the rental.

The ordinance was approved in a 7-1 vote. Ward 5 Council member Steven Dixon abstained from the vote, and Ward 4 Council member Brett Smith voted no.

“The reason I’m voting in favor of this is not because I’m in favor of short-term rentals or the amended ordinance that passed,” said Ward 3 Council member Beth Witten. “I think it’s very important that we provide the proper tools and processes. For that reason, I’ll be in favor for this piece of the process.”

When the amendment is enforced, short-term rentals will be regulated more like other businesses. City Manager Megan Crouch said the City needed these codified guidelines so they can tell owners in zones where short-term rentals are prohibited to cease operation and to tell owners of properly zoned short-term rentals to obtain a license, as the previous lack of guidelines made it unclear whether they needed one.

Crouch said the City will start sending letters to owners soon, informing them to obtain a license or stop renting their residence within 30 days, depending on the zoning of the property. After 30 days, the City will send another letter to owners who don't comply before more strict enforcement begins.

Violations of the recently adopted short-term rental regulations will follow the fine structure of other zoning laws, costing the violating owner $500 per day in violation or six months in prison per day in violation, Crouch said. The decision between the fine and prison sentence will be left to the judge.

Concerns have been raised about compliance with new regulations during football season, when many owners rent their residences to out-of-town guests, Crouch said, as there were reported issues over graduation weekend which the City has been unable to penalize. Crouch said the City will continue to enforce regulations during game weekends, bringing in more staff members to assist in doing so.

A 2012 case from the Alabama Court of Civil Appeals, Slaby v. Mountain River Estates Residential Association Inc., held that short-term rental operations are not commercial use and therefore do not need to be regulated like businesses. Based on this case, Smith, who is a practicing attorney, opposed the amendment out of caution. 

"What we're doing is we're regulating it as commercial use, so I think it potentially opens the door for litigation if someone wanted to do that," Smith said. 

When discussing a new sign for the Boykin Community Center, Ward 1 Council member Connie Fitch-Taylor asked that Crouch explain the importance of the sign. Crouch said that it will promote various functions within the complex on an LED board.

“[The sign will] promote all that’s going on from a City of Auburn lens for board and commission meetings, workshops, events [and] what the public needs to know,” Crouch said. “We have a lot of activity at the Boykin Community Center. We have a number of citizens who have their children in daycare there, we have workout facilities, a gymnasium, senior programs, a new library kiosk … we’re doing a lot of things there.”

Community groups will not be able to advertise on the sign, Crouch said. It will be used exclusively to promote City meetings, events and road construction. The sign was unanimously approved.

Reporting for this story was contributed by Evan Mealins.