Rio Rancho Governing Body discusses regulating short-term rentals

The Rio Rancho Governing Body held a work session Aug. 20 to discuss several topics.

The session, which went for nearly 2 ½ hours, focused on three items, including the regulation of short-term rentals — Airbnb, Vrbo, etc. — in the City of Vision.

Rio Rancho does not have official regulations or an ordinance specifically targeting short-term rentals operating in residential homes. This differs from cities like Santa Fe and Albuquerque that have imposed permitting processes, taxes, penalties and other limitations.

However, even without clearly defined statutes, hosts must adhere to general state and local laws around taxes, zoning, noise, parking and nuisance issues.

While the city's current ordinances do not address STRs, they are subject to the Lodger's Tax, making them impermissible commercial uses. The city has 300 STRs, with 70% being entire house rentals. A proposed ordinance discussed at the work session would limit STRs to 1% of total housing units, require annual safety inspections and impose a $300 annual permit fee.

The estimated revenue from the ordinance is $208,000, with $156,000 for staffing. The ordinance would also address public health, neighborhood quality and housing costs.

“When we talk about public health, comfort and well-being, unregulated, short-term rentals are not monitored for things like short-term rental insurance, building code compliance and fire safety,” City Assistant Attorney Jessica Tolle said. “Looking at neighborhood quality and character, renters may not know or respect local ordinances that our citizens care about, things like noise, parking, pets and trash, rapid turnover. Some of these rentals just increase the number of unknown people in the neighborhood, people that might be less invested in the community.”

The city is considering three options for regulating STRs: allowing them unregulated, prohibiting them entirely, or allowing and regulating them. While the first option has not been implemented in any local municipalities, the second and third options are more common.

The proposed ordinance outlines specific regulations for STRs, including occupancy limits, parking requirements and safety inspections. It also addresses concerns about housing costs and neighborhood quality.

The city is now seeking public input on the proposed ordinance and will continue to refine its approach to regulating short-term rentals in Rio Rancho.

“Looking at the economy, making short-term rentals permissible would allow homeowners to supplement their income. Here, we have a lot of tourists, actors, contractors, traveling nurses, Facebook and Intel employees,” Tolle said. “Renting to them on a short-term basis, they can see higher yield, up to 30% more than they could for a long-term rental. Allowing short-term rentals would also increase the available lodging within the city, increasing our largest tax revenue and potentially gross receipts tax on things like dining, entertainment and shopping activities.”