STR & Housing Affordability
If you’re thinking about turning your property into a short term rental and listing it on sites like “AirBnB”, you should take a moment to review recent legislation and efforts by local government to restrict these types of properties. This is not to say that STRs are going away, but simply to underscore the fact that many cities are cracking down on short term rentals with heavy regulations and restrictions. Why would this be happening?
The main driver creating tension between city leaders and investors is the looming housing and affordability crisis, which many politicians are crediting directly to the operation of short term rentals. The United States is not the first nation in the world to respond to this crisis, in such a way, in fact, Spain has taken this a step further by attempting to eliminate STRs altogether by 2028. This brings us to the question, will the US follow suit?
Large cities like New York are already implementing laws that make it very difficult to rent out a home for less than 30 days, but many are arguing that since these changes came into effect, housing inventory has yet to see any positive change. According to the Airbnb website, rents have not decreased since these changes, hotel prices are at an all time high, and rather than short term rentals being eliminated, they are moving to underground sites. There is no debating that these effects are not helpful for anybody, the latter of which creates safety concerns for guests. So what’s the solution?
Many STR platforms are advocating for collaboration with local governments to create rules and regulations that maintain economic benefits to the community while allowing STRs to continue operations. Those in favor of this are advocating that short term rentals are helping operators stay in their home thanks to the added income. Additionally, restaurant revenue is noted to have been positively impacted from STR operations. Lastly, advocates are also pointing out that a housing crisis is directly the result of underproduction of housing and not short term rentals.
What do you guys think? I would love to hear your thoughts in the comments.
Thanks for reading!