Vacation rental regulatory news for the week of February 11

Regulatory Roundup

Vacation rental regulatory news for the week of February 11, 2018



Republican senators revive effort to overturn strict Airbnb rules in Nashville, other cities
cross Tennessee

From the Article: “As a state, we must find the right balance between reasonable local regulation and constitutionally protected private property rights,” Sen. Stevens said in a statement.

Calling the measure "compromise legislation," Stevens argued proposal "empowers local governments" to create short-term rules related to location, density, quality of life issues, enforcement and health and safety. He said the only limit placed on municipalities would be outright banning any property for use as a rental.

Takeaway: The short-term rental debate has been ongoing in Nashville for several years. Last year the Tennessee lawmakers took up the issue because of what Nashville was doing. The city’s several year attempts to regulate was set to fail from the beginning. The city passed rules and never let the initial regulations work before proposing new regulations and amending others. One set of rules was even defeated in the Tennessee Supreme Court.

Regulations are like weed killer or fertilizer. They need time to eliminate bad behaviors and allow others to benefit the community.  Yearly changes only complicate processes, confuse city staff and cause headaches for community members. Tennessee’s proposed pre-emption will still allow communities to provide for the regulation of the industry and prevents cities from outright banning short-term rentals. This type of scenario allows for regulations and market forces time to work.


Short-term rental ordinance public hearing

From the hearing: The Boston City Council held it’s first public hearing on a proposed short-term rental ordinance. The first speaker, the head of Boston Neighborhood Development Department, began the conversation by stating that whole home, non-owner occupied short-term rentals take housing stock from the market and are a part of the affordable housing issue facing the city. She cited two studies claiming that users of Airbnb who rent whole homes affect housing pricing in Boston and in Los Angeles. Later, a member of the public touted a new report on New York City with similar claims and was paid for by the hotel lobby. Speakers cited these reports repeatedly.

Takeaway: The reports cited during the discussion included a study on Boston at the University of Massachusetts- Boston, a Los Angeles study done at UCLA and a McGill University study in New York. The studies each build off one another and never address one major issue, each community has homes that are seasonally vacant homes and tracked by the U.S. Census. These homes are not part of the overall housing market and in many cases never were.

 The New York study states that Airbnb users potentially removed 13,500 homes from the overall market of 3.4 million housing units in the city. The argument is that these “removed” homes, which account for only .4% of the entire housing market, were responsible for a 1.4% increase in rent across the entire city, on average. Nowhere in the study is there an acknowledgment that the U.S. Census estimates that there are 39,000 seasonally vacant units in the city. The 13,500 homes cited as “removed”, fit within the seasonally vacant figure, meaning that they were never part of the market in the first place.


AB-2777 State employees: travel reimbursements

 From the Bill: "Existing law, until January 1, 2019, requires a state agency to permit state employees traveling on official state business to use… lodging in a short-term rental, as defined."

Takeaway: The focus of the short-term rental regulatory debate centers on whether or not the practice is allowable and what rules should be put in place around allowing the use. It is often forgotten, but there are other regulatory issues in the industry that should be corrected.

This California bill is an example of that. There are still many private businesses, government agencies and schools that do not allow employees to utilize short-term rentals for business travel. Last year, a temporary measure allowed California public employees to utilize short-term rentals for business trips. This bill extends that rule indefinitely.  Rules like this help expand the uses of short-term rental properties and create a friendlier environment when policy is developed. If policymakers stayed in short-term rentals for business and understood their value and convenience, they would understand the industry slightly better and possibly have a better viewpoint on the industry.

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