A study in Real Estate Economics looks at how a short-term rental ban in Irvine, CA, contributed to a three percent reduction in long-term rents over two years.
Housing is set to be one of the hottest topics in the upcoming 2024 legislative session. Unlike any other policy area, the barriers to affordable and attainable housing are overlapping and numerous. One little-discussed challenge has been the increase in short-term rentals (STRs) such as Airbnb’s. Most people are likely familiar with the short-term rental reforms that New York City (NYC) moved forward with earlier this year, but NYC is not alone. In 2018, after residents’ frustration with STRs increasing the cost of living and congestion in once-quiet neighborhoods, the city of Irvine, CA, took bold action by banning short-term rental stays of 30 days or less in residential areas.
Highlights from the Study
The study found that long-term rents decreased by three percent two years after the Irvine, CA, policy started to be enforced. This was largely attributed to the fact that STR units were being reintroduced into the long-term rental market, increasing supply and competition. The major difference between Irvine’s policy and other similar attempts at limiting STRs was that the city was able to enforce it. The city took aggressive action to identify listings that violated the new prohibition and even hired an outside contractor to help identify offenders. New York City recently took similar measures in its crackdown on STRs, requiring all STR hosts to register with the city and banned sites STR sites from posting listings from unlicensed hosts.
According to Business Insider:
It is “common sense,” according to Murray Cox, the founder of Inside Airbnb, a project that examines Airbnb’s impact on cities. “It’s not some abstract commodity,” he said of short-term rentals. “People were living there before.”
There are many communities in Maryland where STRs are a significant contributing factor to the current housing affordability crisis. Local elected officials know best as to where these units should be allowed, but some hosts continue to defy local policies. Further empowering counties to tackle the proliferation of STRs in areas where they are unwelcome will help reduce rents take steps towards greater affordability.
MACo Winter Conference
At the 2023 MACo Winter Conference general session, “Housing – What’s New, What’s Next,” county leaders will hear from the Secretary of the Maryland Department of Housing and Community Development and the Secretary of the Maryland Department of Planning on what the state and counties can do to address the housing crisis.
MACo’s Winter Conference, “Eye of the Storm,” is scheduled for December 6-8, 2023, at the Hyatt Regency Chesapeake Bay Hotel in Cambridge, MD. More information can be found on our conference website.
Learn more about MACo’s Winter Conference:
- Attendee Brochure (with full schedule)
- Exhibitor Details & Waitlist
- Sponsorship Opportunities
- Hotel Details (SOLD OUT – waitlist info)
- Winter Conference Photos