In a recent government meeting, the city of Rio Rancho took significant steps towards regulating short-term rentals by introducing an ordinance aimed at establishing clear guidelines for their operation. Currently, short-term rentals are not permitted in the city due to zoning violations, leading to enforcement challenges and ongoing complaints from residents regarding noise and parking issues.

Assistant City Attorney Jessica Tole presented the ordinance, which has been developed over several months by a working group that included representatives from various city departments. The proposed regulations would require short-term rental operators to obtain a permit, maintain a valid business registration, and comply with health and safety codes. Additionally, operators would need to carry insurance, pass annual safety inspections, and be available 24/7 to address complaints.

The ordinance also includes provisions to limit the number of permits issued, capping them at 1% of the total housing units in the city, which currently translates to approximately 420 permits. This cap is intended to balance the interests of short-term rental operators with the need to maintain neighborhood character. Occupancy limits are set at two guests per bedroom, plus two additional guests, with restrictions on gatherings and rental frequency.

To fund the administration and enforcement of these regulations, the city plans to charge a $100 application fee and a $300 permit fee, alongside collecting gross receipts and lodgers taxes. The estimated annual cost for enforcement, including new staff positions and third-party compliance services, is projected at $191,000, with potential revenue from compliance fees estimated at $200,000 if half of the operators comply.

The ordinance is set to take effect on July 1, 2025, allowing time for the city to prepare for its implementation. During the meeting, public comments were invited, with local resident George Wilson expressing support for the ordinance while suggesting improvements to its provisions.

This move aligns with a broader national trend of increasing regulations on short-term rentals, as cities seek to address the unique challenges posed by this growing sector. The governing body will continue to gather feedback as they finalize the ordinance, aiming to create a balanced approach that benefits both the community and short-term rental operators.