Cities are debating whether to impose new regulations on the short-term rental market, which shows no signs of slowing down.
According to AirDNA, the leading STR analytics provider, US demand for short-term rentals averaged 26.7% higher in the first five months of 2022 than the same time in 2021, giving them high hopes for continued momentum for the remainder of the year. Interest in investing in these properties has ballooned right alongside those values and projections. Just 10% of one Floridian realtor's clients were considering buying a short-term rental property in 2019. By 2021, 60% of his clients wanted a piece of the STR pie.
But STR investors are facing backlash from communities who are concerned about the potential disruptions that come with an increased transient population. The most common complaints are about trash buildup, parking issues, noise disturbances, and a change of the neighborhood’s character.
Yet all that pales in comparison to the real impact of rapid STR growth, as it puts the squeeze on availability of single-family rental homes, especially in areas already struggling with affordable housing. In Orlando, FL, there are only 18 available units per 100 people in need of affordable housing. According to residents and realtors, many vacation homes are rentals that could instead be used for long-term living.
In response to these objections, cities in Texas, Florida, Georgia, and others are adding new, stricter ordinances to upcoming ballots. Residents will vote on proposed solutions which include rezoning; additional fire inspections; capping the number of STRs allowed to operate; and a $50 registration fee per property every two years. As for providers themselves, Airbnb – the top vacation rental marketplace – permanently prohibited parties after a temporary events ban implemented in August 2020 proved effective. The platform also launched new anti-party technology in the US and Canada last Tuesday.
On the opposing side, STR owners and vacation rental sites argue that their properties boost tourism and support small businesses. According to an Airbnb survey, 82% of hosts say they recommend locally-owned shops, cafes, and restaurants to guests. A report from the University of Central Florida’s Rosen College of Hospitality Management shows that the vacation rental industry in just 25 of Florida’s 67 counties earned the state $27.4 billion in 2018.
The public has a chance to help steer the short-term rental market to a more beneficial place for investors, tenants, and communities. Regulations are being reviewed and decided on, and voting will take place within the next few weeks or months, depending on the municipality. In the meantime, residents and property managers should take advantage of the opportunity to share their views with their local government.
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