Overview

Yes, short-term rentals are allowed in Gadsden, AL, but with significant restrictions and regulatory requirements. As of January 1, 2024, the City of Gadsden has implemented comprehensive regulations governing short-term rentals through Ordinance O-75-23. The city previously imposed a six-month moratorium on new STR applications in R-1 zoning districts from July 1, 2023, to January 1, 2024, to allow time for developing these new regulations.

How to Start a Short-Term Rental Business in Gadsden, AL

Step-by-Step Process:

1. Verify Zoning Compliance

   • Confirm your property is appropriately zoned for STR use
   • Properties in R-1 (single-family residence) districts are prohibited from STR operations unless they obtained a special exception before July 1, 2023
   • Obtain a zoning verification letter from the Planning Department

2. Prepare Required Documentation

   • Gather all required documents (see next section)
   • Complete the STR Permit application
   • Secure vacation rental insurance coverage

3. Submit Applications

   • Apply for STR Permit through the Building Department
   • Obtain Business License from Revenue Office
   • Submit all required documentation simultaneously

4. Notify Adjacent Property Owners

   • Provide written notice to adjoining property owners
   • Submit copy of notice to Building Department
   • Include required contact information and occupancy details

5. Pay Required Fees

   • STR Permit fee: $100-300 annually
   • Business license fees (variable)
   • Prepare for lodging tax collection and remittance

Required Documents, Permits, Licenses, and Guidelines

Required Permits and Licenses:

1. Annual STR Permit

   • Issuing Authority: Building Department
   • Fee: $100-300 annually (adjustable annually, max $300 without council approval)
   • Duration: January 1 - December 31 annually
   • Transfer: Non-transferable to other locations or entities

2. Business License

   • Issuing Authority: Revenue Office (Chapter 74, Article III)
   • Requirement: Mandatory before operating any STR

3. Lodging Tax Registration

   • Authority: City of Gadsden (Chapter 74, Article X)
   • Responsibility: Collect, report, and remit lodging taxes

Required Documentation:

1. Emergency Contact Information

   • Name, cellular/mobile phone number
   • Physical and mailing address
   • Email address
   • 24/7 availability requirement
   • 1-hour response time to complaints and on-site requests

2. Property Documentation

   • Copy of property owner's driver's license or government-issued ID
   • Current house rules for STR property
   • Zoning verification letter from Planning Department
   • List of advertising platforms for STR promotion

3. Insurance Documentation

   • Vacation rental insurance, short-term rental insurance, or equivalent
   • Must be in addition to homeowner's insurance
   • Annual proof required for permit renewal

4. Compliance Statements

   • Sworn statement acknowledging receipt of ordinance
   • Affirmation of compliance with all city rules, regulations, and codes
   • Adjacent property owner notification (with copy to Building Department)

Specific Regulations for Short-Term Rentals

Zoning Restrictions:

• R-1 Districts: STRs are unlawful in R-1 (single-family residence) zoning districts
• Grandfathered Properties: Properties with special exceptions granted before July 1, 2023, may continue operations
• Other Districts: STRs allowed in properly zoned districts (non-R-1)
• Special Exceptions: Properties requiring special exception approval must obtain it before STR permit issuance

Operational Standards:

1. Permitted Use: STRs limited to lodging use only
2. Prohibited Activities: Weddings, parties, concerts, or similar events
3. Signage: No on-premises signage legible from public street right-of-way in any district

Occupancy Requirements:

• Maximum Occupancy: 2 persons per bedroom
• Fire Marshal Override: Fire marshal may determine different occupancy limits
• Zoning Override: City zoning ordinances may specify different limits
• Building Official Override: Chief Building Official may determine different limits

Parking Requirements:

• Adequate Off-Street Parking: Concrete or asphalt parking required
• Minimum Spaces: 1 designated parking space per bedroom
• Prohibited Parking: No RVs, buses, or trailers on street or forward of front building line
• Transient Parking: All vehicles must park within designated areas
• Overnight Street Parking: Strictly prohibited for transients

Safety and Compliance Requirements:

• Permit Posting: STR permit, emergency contact information, and house rules must be posted conspicuously within the STR
• Violation Response: Owner/operator/emergency contact must promptly notify renters of violations and take corrective action
• Insurance Maintenance: Continuous vacation rental insurance required in addition to homeowner's insurance

Violation Penalties:

1. First Violation: Written notice with corrective action requirements and compliance deadline
2. Continued Violation: Temporary permit suspension until corrected
3. Recurrent Violations: License revocation or suspension proceedings

Complaint-Based Penalties:

• Two Valid Complaints (12 months): Minimum 6-month permit suspension
• Second Suspension (2 consecutive years): Minimum 12-month suspension
• Third Suspension (3 consecutive years): Permanent permit revocation

Financial Penalties:

• Fine: Minimum $500 per incident upon conviction
• Fee Adjustments: Annual STR permit fee adjustments possible (effective January 1 each year)

Tax Requirements:

• City Lodging Tax: 4% (per Summer.com market analysis)
• County Lodging Tax: 5% (per Summer.com market analysis)
• Collection Responsibility: STR operator must charge, collect, report, and remit taxes

Contact Information for Local Authority

Building Department (STR Permit Authority):

Primary Contacts:

• Brian Greer, Chief Building Official

  • Email: bgreer@cityofgadsden.com
  • Phone: (256) 549-4764

• Jan Turley, Deputy Building Official

  • Email: jturley@cityofgadsden.com
  • Phone: (256) 549-4535

Administrative Support:

• Beth Kerzic, Administrative Assistant

  • Email: bakerzic@cityofgadsden.com
  • Phone: (256) 549-4764

• Donna Ingram, Administrative Assistant

  • Email: dingram@cityofgadsden.com
  • Phone: (256) 549-4529

Revenue Office (Business License Authority):

City of Gadsden

• Address: 90 Broad Street, Gadsden, AL 35901
• Phone: (256) 549-4500

Additional Important Contacts:

• Code Enforcement: (256) 549-4746
• Rental Inspections: (256) 549-4564
• Permit Application Platform: https://gadsdenal-energovpub.tylerhost.net/Apps/SelfService#/home

Source Links

1. City of Gadsden STR Ordinance O-75-23 - Primary regulatory document
2. Building Department - STR Application - Permit application
3. Gadsden Times - Moratorium Article - Background on regulatory development
4. WBRC - Zoning Regulations Change - News coverage of moratorium
5. GoSummer.com - Gadsden Market Overview - Market analysis and tax information

Note: The ordinance became effective January 1, 2024, superseding previous regulations. Property owners operating STRs within the city had 30 calendar days from the effective date to obtain necessary licenses. Investors should verify current requirements with the Building Department before proceeding with any STR operations.