Residential “Short Term” Rentals
The term “Short Term Rentals” is used to define a residential leasing, which has various definitions of time but is generally less than ninety (90) days. The term has become synonymous with companies like airbnb or vrbo, that manage websites used to market and book residential properties for short term stays. Lately, here has been a big increase in media exposure related to regulation of these activities as properties traditionally not used for such purposes are attempting to be converted to such use.
Proponents argue that these rentals promote tourism, generate revenue for a community (in sales and hotel occupancy taxes), can defray the expenses of a family’s vacation home and often offer a budget friendly option to travelers. Opponents cite increased noise, traffic and parking issues, strangers in neighborhoods, reduction of residential housing availability and unfair competition with other more traditional rental options. Communities that create regulation of short term rentals are doing so for many reasons, but typically they are attempting to: (1) balance the economic opportunity created by short term rentals with the need to supply long term housing; (2) ensure safety and (3) protect the rights of neighboring properties and residents.
Communities all over the world have been struggling to find a balance on this issue. Paris and Barcelona have regulated such activities and have come down on violators with fines nearing $25,000. San Francisco and New York have similar legislation with time limits, registration requirements and requiring that the landlord still be in residence. Santa Monica has some of the toughest regulations which require a business license, payment of a 14% occupancy tax and requiring that the landlord remain in residence.
In Texas, Austin has been at the forefront of juggling the two sides of this issue. After passing ordinances allowing such uses (with certain limitations), in February Austin made significant changes to the ordinances to further regulate these activities. The new ordinance imposes new requirements for inspections, sets occupancy limits, and creates a process for denying, suspending or revoking a license, along with an appeal process. The ordinance also sets limits on the geographic distance between some types of rentals, establishes requirements related to noise and prohibits certain types of gatherings. In master-planned communities with deed restrictions and strict use covenants enforced by community boards, an additional layer of approvals and restrictions make such use even more complicated and controversial and less likely to be approved without significant limitations.
In communities all over the globe, renters and homeowners need to be aware of the local regulations and the changing landscape related to short term rentals and assess how such rules may impact rights of owners, renters and neighbors.
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