Last month, Galveston, Texas topped the R Street Institute’s list of U.S. cities most open to innovative short-term rental practices. The Washington, DC-based think tank released a study examining the STR market in the country’s 59 largest cities, and found that Galveston and Savannah, Georgia offered the best environments in the nation for short-term rentals.
As we discussed in our post last month for VRMA, these kinds of success stories often occur when vacation rental management firms approach STR regulations as advocators and collaborators, rather than as opponents. Galveston is a fantastic example of this approach.
In Galveston, collaboration between STR owners and local governments benefit the entire community. The Short-Term Rental Owners Association of Galveston (STROAG) is a nonprofit education and advocacy group whose mission is to advance Galveston’s thriving STR market by sharing information and forging mutually beneficial relationships. STROAG has successfully collaborated with municipal leaders to protect Galveston visitors, residents, and homeowners through well-considered and responsible regulation.
At the time of this writing, Vacasa manages approximately 75 properties in Galveston—and our local teams can attest to the benefits of reasonable regulation at the city level, including a safe environment for both guests and employees and a better reputation for vacation rental management groups. For example, Galveston city officials and vacation rental managers recently agreed that all STRs be represented by a property manager able to arrive at the home within an hour. Additionally, the new Galveston ordinance requires all rentals to provide guests with standards of conduct, and supplied a “Good Neighbor Policy” from STROAG as the example to follow.
On a broader scale, professionally-managed vacation rentals deliver economic and social benefits that many self-managed properties simply can’t compete with. Vacation rental management companies create more jobs than property management groups that focus on long-term rentals. The addition of vacation rentals to a community boosts demand for shopping, dining, and tourist activities, all of which benefit the local economy.
Even a cursory look at the data will show that plenty of people are willing to operate illegal STRs—and plenty of people are willing to stay in them. The R Street Institute’s research makes it clear why illegal STRs are a tempting proposition: many communities make it costly, confusing, and time-consuming to operate an STR. The proliferation of fly-by-night outfits contributes to a negative perception of the STR industry as unreliable and transient—a perception that organizations like STROAG and brands like Vacasa are working hard to change.
In the R Street Institute’s scoring system, cities were ranked highly if they had robust legal frameworks to support STRs and only mild restrictions in place. Burdensome licensing requirements, expensive fees and assessments, disproportionately high insurance rates, restrictive occupancy rates, and mandates to provide parking all caused cities to lose points. In addition to Galveston and Savannah, Dallas and San Diego also ranked as STR-friendly destinations.
Cities like these that do vacation rental regulations right create minimal barriers to entry and success, establish an easy-to-navigate legal framework for homeowners, and work with industry advocates to make it more convenient (and more profitable) for owners to operate legally than illegally. When STRs operate above-board, with the blessing and assistance of their municipal leaders, they are able to provide a safer, more copacetic environment for both guests and employees. Equally important, STRs that operate in partnership with local government earn the trust and respect of their communities, which is always good for business.