KANSAS CITY, Mo. — Dozens of short-term rental owners and operators are taking Kansas City to court over new regulations that take effect next week.
In the lawsuit, 36 owners and LLCs say the city is violating some of their constitutional rights over their properties and contracts with renters.
They also say Kansas City’s new short-term rental regulations are discriminatory because there are different rules for properties that have an owner living on site and those that are empty when there aren’t any guests.
The lawsuit comes after the Kansas City Council passed two ordinances last month on short-term rentals, like those listed on Airbnb and VRBO. The new restrictions address registration, code violations and even where certain rentals are allowed within the city.
One of the biggest changes is that non-resident short-term rentals — or those where the property owner doesn’t live on site — will no longer be allowed in neighborhoods zoned as residential.
Previously approved non-residential short-term rentals are allowed to continue in residential neighborhoods, but new ones will not be permitted.
Additionally, any non-resident short-term rental found in violation of city code will lose its registration for one year, according to the new regulations.
Any short-term rental owner that has 3 or more city code, state or federal law convictions and is determined to be a threat to public health and safety can lose its registration for 3 years.
The city council has also establish a flat registration fee of $200; however, that fee will increase annually based on the Consumer Price Index.
The council will also require all booking platforms — like Airbnb and VRBO — to remove any unregistered short-term rentals.
The changes came after the city discovered there are hundreds of unregistered short-term rentals in Kansas City. There are over 2,000 unit listings overall across the city, making up an estimated 7-11% of hotel room supply.
But a Kansas City audit determined 93% of those rentals were not listed with the city at the time, estimating the city missed out on at least $1 million in registration fees over 4 years.
Many of the short-term rental owners in the lawsuit say Kansas City was slow to look over their licensing applications, which the city first started accepting in 2018. Two of the plaintiffs said their applications were pending for almost 5 years.
The lawsuit alleges on May 16, the city voided half of the pending applications, and on May 31, the city denied the other half, leaving many owners in limbo.
FOX4 reached out to the city Friday about the lawsuit. Assistant City Manager Melissa Kozakiewicz declined to comment.