A Sustainable Cities Network article (2018-07-18) highlighted the actions some local governments have taken across the United States in response to the burgeoning growth of Airbnb and similar short-term rental models. Short-term rentals, such as those offered through services like Airbnb, offer both positives and negatives. They can encourage tourism and provide homeowners with extra income, both of which can help a local economy. However, they can also attract commercial investors and when the concentration of short-term rentals reaches a tipping point, actually destabilize residential neighborhoods, reduce long-term rental options, and threaten jobs in the local hospitality industry.
MACo has supported addressing both the regulation and taxation issues posed by short-term rental properties. The Maryland General Assembly has considered legislation on short-term rentals for several years but nothing has passed to date. The article looked at how several local governments in other states have tried to address this challenging and complex issue.
The article focused on the efforts of Boston, which saw a dramatic spike in commercial investors purchasing residential properties to use as short-term rentals starting around 2013. The issue was brought into focus after a coalition of advocacy groups provided research from the University of Massachusetts showing the increasingly negative effects the short-term rental trend was having on the city’s workers and residents. After being presented with the data, the city’s elected officials took action:
In June 2018, the Boston City Council passed an ordinance eliminating investor unit listings and regulating other short-term residential rentals. It established a registration and data collection system that will allow the city to more effectively monitor the impacts of this industry on its residential housing supply. “At the same time, it continues to allow owner-occupants to rent out extra rooms on AirBnB for as many as 365 days, or their entire home while on vacation,” the ordinance explains.[Fenway Community Development Corporation representative Colleen] Fitzpatrick says that having data about who owns properties and how they are managed as rentals is a very important piece of the puzzle for city leaders to possess. It would be helpful, but not practical, to access the databases of companies such as AirBnB, which has a very sophisticated registration platform. Without access to information, it can be difficult for communities to move from registration to enforcement.
Fitzpatrick also noted in the article that the purpose of the ordinance was not to eliminate short-term rentals but rather find the balance between allowing short-term rentals and having stable communities and housing/long-term rental options.
Miami Beach (Florida)
The article discussed how Miami Beach has struggled to enforce its short-term rental regulations, which limit the location of short-term rentals based on tourist appeal and neighborhood character. For rentals less than six months and one day, homeowners must: (1) submit an affidavit stating that their home is located in an approved short-term rental area; (2) obtain a business tax receipt and resort tax account; and (3) if part of a condo association, show that the association allows short-term rentals. Single-family homes are prohibited from engaging in short-term rentals. Violations result in the eviction of tenants and fines for the owner starting at $20,000.
Denver, Estes Park, and Larimer County (Colorado)
The article noted that Denver has imposed both regulations and taxes on short-term rentals, which generated $1.1 million in the first eight months of 2017. The property registration rate is estimated at around 70 percent.
Nearby Estes Park and Larimer County jointly developed short-term rental regulations to ensure consistency within their jurisdictions. All short-term rental property owners must register and pay an application fee of $200 plus $50 per bedroom. The joint ordinance: (1) sets caps on rentals within residential zones and limits occupancy to eight people per home unless exempted after a review process; (2) requires the designation of a local representative of property manager to handle complaints; and (3) prohibits employee housing, attainable housing, and accessory dwelling units from being registered.
Walla Walla (Washington)
The city of Walla Walla passed a controversial ordinance that prohibited short-term rentals for properties that were not owner occupied for at least 275 days per year and limited rentals to 29 days at a time. Owners must also register short-term rentals as a business and pay applicable taxes. The article described the controversy surrounding the ordinance and the implementation challenges as many short-term renters could not meet the short timeline for the registration and taxation requirements.