Communities across the United States and around the world are creating regulations targeting short-term rentals. Often these regulations are burdensome and onerous and sometimes they are so restrictive they can be considered “effective bans.” Sometimes the regulations even call for an all-out ban.
But, sometimes the regulations are fair to professional property managers, travelers and the local communities. That happens when property managers get organized and engaged early to ensure a fair outcome. Local leaders need input from the community, and as leaders in the industry your voice should be heard.
WHY ARE THEY REGULATING?
There are a variety of reasons why regulations come up, and it’s difficult to predict a single event, or combination of events, that might make your town start down the regulation path. However, some examples we have seen include a campaign of Not In My Backyard, local officials being squeezed for tax revenue, or someone in the city reporting a nuisance issue with a guest. Sometimes the originator of the discussion may be an elected official or city staffer who has seen this conversation occur in another community. Often these public discussions do not receive a high-level of publicity; thus, it catches property managers by surprise.
There are many arguments used by opponents against short-term rentals, but the most common include: short- term rental operators do not pay their taxes, the neighborhood is harmed by having short-term rentals and their occupants, this is commercial activity in non-commercial neighborhoods, it reduces housing stock for the community, it can drives up property values, and more.
Our point here is local supporters of short-term rentals never know what could start the conversation, but once the conversation starts you can expect to see one or even all of these arguments come up.
WHAT CAN YOU DO TO PREPARE? ORGANIZE!
So what can you do to ensure you and other supporters of short- term rentals in your area are ready?
It’s important to organize early before opponents can frame the discussion in the wrong way. Taking a proactive approach and uniting the stakeholders in the community early has shown time and again to be a successful strategy.
And, it’s easy to get started. In most cases local alliances got started when one property manager called another property manager, who called another, who emailed their owners, and a local alliance began.
Alliances benefit from involving groundskeepers, cleaning companies and repeat tenants-- all the individuals and businesses that contribute to a healthy, local economy. Many times the local alliances included other promoters of the local tourism industry; the local Convention and Visitors Bureaus and boards of directors of Airport Authorities and civic arenas, major event planners, Chambers of Commerce and real estate associations. In one example, the local alliance found strong support from the beneficiaries of the Hotel Occupancy Taxes (or Transient Taxes) including the Convention Center, art and music festivals and cultural groups.
Successful alliances have relied on data and best practices such as the United States Conference of Mayors, which unanimously passed a resolution regarding short-tem rentals stating:
- “Onerous regulations of short-term rentals can drive the industry underground, thus evading local regulations and local hotel taxes”, and, “fair regulation of short-term rentals ensures greater compliance and greater receipt of local hotel taxes”, and;
- “Economic impact studies conducted in 2014 show and overall economic impact by the traditional short-term rental activity in Myrtle Beach, SC at $200.7 million and 2,587 jobs, and overall economic impact to St. Joseph, Michigan of $24 million and 300 jobs, and the Coachella Valley, California communities of $272 million and 2,539 jobs”, and;
- “The U.S. Conference of Mayors urges support for economic development opportunities through the visitors industry by encouraging regulations of the short-term rental industry that (1) establish a reliable way for the municipality to identify and contact the short-term rental owner; (2) make the tax collection and remittance obligations clear to the short-term rental owner; and (3) treat short-term rental tenants the same as long-term rental tenants. Regulations that accomplish all three can achieve a high level of compliance, and are highly effective.”
The VRMA has also tracked other economic impact studies that show benefits to other communities including; Galveston, Texas $283.6 million and 3,100 impacted jobs-a-year, Monterey, California $131.8 million and 1,400 jobs-a-year, North Carolina $4.5 billion total impact, $1.4 billion in annual real estate sales and$180 million in tax revenue, and Florida $31.1 billion, 322,032 jobs affected annually (directly and indirectly supported by VR industry) and labor income from jobs: $12.6 billion annually.
WHAT IS VRMA DOING?
Time and time again we see professional property managers, and the property owners they represent, organize early to take a unified stand for the way their community should regulate short-term rentals to local governments. When this happens, they help drive the conversation about regulations rather than limping along after the fact.
Your community will almost certainly have a discussion of regulations and it is important to organize a local alliance, to follow best practices and embrace a positive, transparent, solutions-oriented and data-driven strategy.
This year the VRMA has engaged with dozens of communities that are discussing regulations. We have submitted testimony and worked with local alliances and have testified at state and federal discussions on regulations.
This month the VRMA will begin regular monthly coordinating calls with national short-term rental stakeholders including the Travel Technology Association, the Short-Term Rental Advocacy Center (), the National Association of Realtors, the American Resort Destination Association and major online platforms.
This fall the VRMA will launch an online toolkit to help you with local regulations. The toolkit will include a white paper, example letters of support and opposition, a data center - with short-term rental facts, and model language for specific regulations that could affect you.
As the VRMA evolves, we continue to focus on the need for advocacy and educating our members on how to advocate at the local level. We will continue to provide advice and examples for our members on how to develop a local alliance. Please email , chair of the VRMA Government Affairs Committee with any questions.