Short term Rental Regulations, Good or bad?
New Short term Rental laws aimed at regulating companies such as Airbnb, are being discussed and introduced in cities across the United States. New York, San Diego and Boston have all recently presented bills in efforts to add some order to the vastly growing market, which would affect all the sector’s stakeholders, hurting the finances of the landlords, while leaving tenants with either higher rent prices, or nowhere to stay at all. Whether or not these markets require regulation is not necessarily the right topic of conversation however, as all industries should be contained by some set of rules as to maintain order, establish a level playing field, and ensure the absence of exploitation. The question becomes then, what type of regulation does this sector require?
New Laws
In New York, Mayor Bill De Blasio, believes that a step towards order can be obtained through transparency, and has signed a new law July of this year, which requires short term rental services to provide data on all their tenants. With failure to do so resulting in a $1500 fine per month, for each occupied listing. Airbnb stakeholders believe that the move in this direction is not entirely motivated by a need for transparency with the tenant’s interest at heart, but is instead fueled by the relationships which exist between law makers and hotel industry. Travel Tech, an association for online rentals called the bill’s requirements “an assault on data privacy.”
Meanwhile, San Diego’s new ordinance limits primary residences to only be rented for six months a year, in an attempt to curb the city’s short term rental activity and volume, a move which has also been seen in various parts of Europe such as London and Barcelona. This has left many property owners in the sector dreading the eventual economic fallout given that their inventory will now be unusable for half the year.
Finally, in Boston, MA, short term rental rooms will be now be taxed thanks to a bill which received support from the Massachusetts House and Senate. A move which some, such as Senator Ryan Fattman, believe is a move too far. Senator Fattman is quoted as saying, “We are essentially taking a group of people and treating them as if they are the Hilton corporation.”
A win or loss for the Short Term Rental Industry?
Within the sector, a move to regulate pricing, erect basic property and customer service standards and create an equal playing field amongst providers are all regulations that once implemented, can positively propel the market forward.
The attempted regulation of the short term rental industry defines the society we live in today. Although all the approaches differ, they all illustrate these cities are beginning to see the need for serious regulations when it comes to the rental market. One would have to ask though, in a world that consists of constant advancements, how do we allow for constant innovation, whilst maintaining a level playing field and keeping consumers safe? Only time will tell if these new laws and regulations are the proper way forward for the fast-growing short-term rental industry or if they are the beginning of the end.