The Kansas City Auditor’s Office released an audit focused on compliance with the city’s short term rental permit requirement.
The City Council passed an ordinance in 2018 regulating the operation of short term rental units in Kansas City. These regulations require hosts to follow steps to obtain a permit depending on the type of zoning and ownership of the unit. These regulations also include requirements for health and safety standards, prohibitions on certain activities in the unit, and an enforcement process.
The audit concluded that in August 2022, only 11% of the over 1,800 short term rental units in Kansas City had permits as required. Since the program began in 2018, only 7% of units obtained a permit. Because of this the city did not collect over $1 million in permit fees and renewals that help fund staff to process applications and enforce regulations. Without permits, the city does not have information about the owners of short term rentals and their location or the resources to fund program staff.
City code’s approach to permitting is ineffective, according to the report. A violation occurs only once a guest stays at a short term rental unit. This regulatory approach requires a high degree of evidence to prove. Because most of the short term rental transactions occur on intermediary websites, hosts have little incentive to comply with city requirements. Other cities we reviewed prohibit either hosts or intermediaries from listing, booking, or collecting fees from units without permits. Additionally, the audit found that the City Planning and Development Department could better communicate with intermediaries, define what information intermediaries and hosts should retain, and come up with a process to obtain that information.
The audit makes recommendations aimed at creating a regulatory framework where all units must have a permit to list on platforms and give city staff the information and resources necessary to better enforce all short term rental regulations.
The audit was scheduled to be presented to the council on Thursday, Dec. 8.