NATCHEZ — City officials are considering a new ordinance that could affect short-term rentals through platforms such as AirBNB or VRBO in Natchez.

The mayor and Board of Alderman will hold a public hearing at 6 p.m. on June 20 on the proposed ordinance to regulate short-term rental property, also known as guesthouses.

The ordinance is driven, in part, by a need to track the number of short-term rentals in the city and ensure appropriate taxes and fees are being paid. (Click here for a draft of the ordinance Natchez aldermen are considering.)

A quick search of AirBNB or VRBO, online platforms that handle the reservations for guesthouse rentals, shows more than 100 guesthouses in operation in Natchez. However, Natchez City Planner Frankie Legaux said only 12 guesthouses are licensed with the city. (Click here for the list of guesthouses registered with the city at present.)

Why city approval and licensing for guesthouses matters

In the city, visitors who stay in hotels, bed and breakfast establishments and short-term rentals are required to pay a $2 per room per night tax that comes back to the City of Natchez as revenue.

Whether that is actually happening with short-term rentals is unclear.

“AirBNB and VRBO are telling us they are paying that tax. However, there has been no transparency in what they are paying or what that payment represents,” said Devin Heath, executive director of Visit Natchez.

“If you own a guesthouse that operates on AirBNB, they collect the tax and money for the stay and then give you your share of the money. Then, they pay the state department of revenue. We haven’t been able to reconcile with the department of revenue what is being paid and if the city is getting its fair share,” he said.

Heath thinks the issue of not properly seeking approval for guesthouses or paying the necessary taxes among individual property owners is one of communication.

“I just think that they don’t know. We want to start working to educate everyone and know what taxes they are paying so they don’t get a big bill at the end of the year,” he said.

Heath is on the Mississippi Tourism Association board, and is part of working on an advocacy plan for fiscal year 2024, which includes working with the state’s department of revenue to get more transparency about what is being remitted.

“I don’t think they are trying to be sneaky,” he said of the revenue department. “I think they are undermanned. They don’t have the manpower to provide the necessary information we would like to see. We’ve got to figure out a solution to help them in order for them to be able to share with us the information we need.”

Guesthouses are important to the city, as is the sanctity of neighborhoods

Natchez Mayor Dan Gibson said both sides of the guesthouse and neighbor issue can come out winners.

As an owner of a guesthouse at 914 State St., Gibson said the city’s attorney has advised him that he should recuse himself from the short-term rental public hearing on June 20. That may be the same situation for Ward 3 Alderman Sarah Carter Smith, who with her husband, Jim, recently received approval from the city’s planning commission to operate a guest house at 401 Madison St. The guesthouse is yet to be operational, so it is not on the list of those currently operating in the city.

Owners who are operating a guesthouse in the city and have not been granted approval from the planning commission or are doing so without a privilege license could face penalties for doing so.

“That depends on the outcome of the short-term rental ordinance. However, I will say the city will work reasonably with anyone who has good intentions and wants to do things the right way,” Gibson said. “We don’t want to penalize individuals who have moved here in good faith, taken properties that were once dilapidated and are now offering them as beautiful properties to tourists in our city. We are a tourism rich community and all the numbers we have show we are having increased tourism.

“I am hopeful reason will prevail on both sides of this issue. Individuals need to have a say with what goes on in their neighborhoods. Anyone offering their property for commercial use, which lodging is, should be done according to code and safety standards,” he said. “I think the planning commission has done their best to accommodate everyone with the ordinance they are proposing.”

Gibson said he thinks of Natchez as the tourism capital of the south and “we have to keep our tourism doors wide open. Tourism is important to jobs, small business owners, shops, restaurants and our tourism partners.

“In this post-COVID world, more families are wanting to travel together. They want to have a kitchen. They have their children with them and they have their pets. We love having them in Natchez. They might now come here if the only options they have are hotels and bed and breakfasts,” he said. “And we definitely don’t want to return to the days of having so many vacant houses and so many for sale signs in yards in Natchez.”