I often receive emails from VRMA members asking for talking points to fight back at the most-cited issue with short-term rentals: affordable housing.
This conversation happens in almost every city, big and small. Numerous short-term rental bans of non-owner occupied homes have occurred solely on the basis that those homes take inventory out of the market. It is very difficult to fight back without data. Even then, it can be an uphill battle because housing affordability issues are a very real public policy concern in the U.S. and other countries.
It’s easy for opponents to misquote or mischaracterize the issue. First, there is a difference between affordable housing and housing affordability. Affordable housing is generally housing units constructed for low- to moderate-income families. Housing affordability is a broader term, looking at general housing costs. However, to most people, these terms are interchangeable.
The main argument used against the industry is that vacation rental operators remove homes from a market, driving up prices and limiting options for locals. This is a very simplistic view, and most research on the topic falls into this category.
The main studies that are often citied in this housing debate are from the Economic Policy Institute, “the economic costs and benefits of Airbnb,” and several similar studies done by academics Barron, Kung and Prosperpio research. All of these studies miss one major data point: the U.S. Census statistics on seasonally vacant homes.
Last year, an article appeared in our alerts and stated that Airbnb took over 20% of Sedona, Arizona’s homes out of the long-term market. The U.S. Census statistics showed that for decades, over 20% of Sedona’s housing has been seasonally vacant. This article was really showing Airbnb’s market share in that community. Also, the Economic Policy Institute’s “study” is a cost-benefit analysis—an opinion piece citing anecdotal evidence.
There are very few studies that discuss the impact of short-term rentals on housing costs. This year, the VRMA Advocacy Fund is sponsoring a first-of-its-kind study that will look at various communities across the U.S. to examine housing costs in relation to short-term rental activity. This is not an opinion piece to prove our opponents wrong, but to actually examine the issue to see if there are problems, and to develop policy solutions if there are problems.
I too often hear managers say their homes have never been affordable, so they are not the problem. This is not always the case. There could be situations where short-term rentals may influence rents or pricing. But higher wages, increased tourism, and quality visitors outweigh this. We cannot simply say that the issue doesn’t exist without research. Keep in mind that correlation does not imply causation. Many of the homes you rent are already in hot housing markets. There are massive shifts in populations to urban centers and warmer climates, for example. In addition, young people want to move to trendy neighborhoods, the same neighborhoods tourists want to visit.
The complex net of the vacation rental market, housing market, and economy in general all play a role in housing and rent pricing. To blame short-term rentals for widespread housing price issues is too simplistic of an argument and must be corrected. This is done by providing more research on short-term rentals and the housing market.
We as an industry need to work together to educate policymakers and the public about how the vacation rental industry and housing market work together, and to create thoughtful discussion to fight the anecdotal and combative language that currently is used against the industry. We look forward to sharing our housing affordability study in the near future to help you when this debate comes up in your community.