New Arguments and Terminology Emerge in the Short-Term Rentals Debate

vacation rentals debate arguments[Alvin Brickman for Metrosetter Wire]

Some new arguments and terminology are starting to emerge in the debate around short-term (“vacation”) rentals.  Arguments for and against the practice of renting out a property for periods of less than 30 days are typically easy to predict, but because short-term rental regulation is now being considered by city councils across the country, we’re starting to see some new and more incisive perspectives on the issue.

New Argument For Strengthened Enforcement Against Short-Term Rentals

For most cities grappling with the legality of short-term rentals for the first time, the dialogue is primarily centered around how to regulate them. But as regulations are enacted by more and more cities, we’re finding that the question has changed to “How can we effectively regulate them?” City governments are finding that most short-term renters will continue the practice without official approval even with strict prohibitions in place and are, consequently, having to rethink their strategies. For instance, in Austin, the regulations on vacation rentals enacted in August have been almost entirely ignored, and in San Francisco, a 1981 law banning renting properties for periods of less than 30 days has been expanded to counteract the swell of properties being rented illegally. Thus, it isn’t simply a questions of what rules to set in place, but how to ensure that those rules are enforced.

In New Orleans, members of the Professional Innkeepers Association of New Orleans, in an editorial by neworleanscitybusiness.com, have focused their their protests on this apparent laxity of enforcement of governmental policies. Because the lax enforcement of existing laws are enabling short-term renters to continue renting illegally, it seems that the association believes a more equitable solution would be to simply increase taxes on the “legal” short-term rentals (i.e., those with a permit).

[Note: I refer to the person(s) represented by the article’s arguments as “it” below because the article’s authorship is attributed anonymously to “CityBusiness Editorial” rather than a specific person or group.]

“[the 55 B&B members of the Professional Innkeepers Association of New Orleans] … have no problem with the additional competition; they take issue with city being selective with the laws it enforces….

The boutique hospitality industry isn’t intent on shutting down websites such as Airbnb.com. It’s more interested in the city establishing fair standards, including a uniform tax structure for bed and breakfast operations instead of the current formula based on available rooms.

In other words, the boutique hospitality industry wants a new policy that exacts the same amount of tax from someone renting out a spare bedroom as it does from a hotel renting out 20 rooms, giving larger hotels a competitive advantage.

The New Orleans CityBusiness Editorial then poses a strong argument that unenforced regulations creates liability for the city:

It’s also in the best interest of the city to move away from its half-hearted enforcement of the short-term rental law, as its leniency creates a potential minefield of liability. Someone who stays at an unlicensed guesthouse and is injured physically or financially could seek recourse from the city for failing to uphold its codified standards.

The city could simply nullify the short-term rental ordinance, but that would only further penalize legitimate businesses.

The editorial does have a strong argument. As we are seeing repeatedly, official regulation simply being put in place isn’t enough — it must be actively enforced.

Just as an aside, I will say that after making the argument citing city liability, the editorial reveals that it in fact is acutely interested in averting additional competition by asserting that the non-regulation of hotels somehow positively penalizes “legitimate” ones, belying its earlier claim of disinterest.

Nonetheless, there doesn’t seem to be any strong arguments (or anyone outspoken) in favor of vacation rentals continuing completely unregulated.

New Term Coined in Support of Short-Term Rentals

In addition to new arguments springing up in short-term rentals discourse, there is also new terminology being coined.

Consultant Tammy L. Wisco of Eco-Systems Inc., who is meeting with the Ocean Spring’s planning commissioners to draft an ordinance on vacation rentals in Ocean Springs, MS, has coined the term “unique lodging” to describe how the recent vacation rental explosion is largely due to their having a special quality that travelers value:

The vacation rental is a different animal. But like the bed-and-breakfast, it appeals to the vacationer who prefers a home setting….

‘Unique lodging’

It allows alternate lodging for small groups and families, important to a city where lodging options are limited.

She calls it “unique lodging embedded in the fabric of the town,” where visitors are more likely to spend money at local shops.

It may seem that this pro-short-term rentals argument is basically a truism, but it’s one that has been so deeply buried under vilifying arguments citing their unfair exemption from taxation and disruption to local communities that it deserves pointing out. I suspect that many engaged in the debate have forgotten why travelers enjoy alternative lodging in the first place.

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