Welcome to Tea with

Brittany Lea

Presented By:

With: Matt Curtis of the VRMA

Short-term Rentals Provide Long-Term Benefits To Travelers, Homeowners, and Communities Alike

Travelers • Responds to the demand from families and large groups for spacious accommodations at an affordable price

• Vacation travelers can fully immerse themselves in the local culture

Homeowners • Opportunity to earn supplemental income when property is not in use

• Sixty-two percent of homeowners rely on income from short-term rentals to pay for household improvements

Communities • Incentives to maintain homes that typically sit vacant • Patronage of neighborhood businesses brings benefits of

tourism to areas that lack hotels • New employment opportunities

Benefits

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Short-term Rentals (STRs) Provide An Alternative For Families And Extended-Stay Travelers

HeadingPrimary Rentals

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• Bringing travelers into often-underserved communities, homeowners rent out their primary or secondary homes on a short-term basis

• On average, travelers spend 6.2 days in a STR and frequent local boutiques and restaurants

• 54 percent of homeowners earn enough STR income to cover 75 percent of their mortgage payments

Short-Term Rentals

What Are They? Who Uses Them?

• Grandparents rented STR in Chicago, IL to attend their grandson's graduation ceremony

• Students rented STR in San Francisco, CA while presenting at research symposium

• Family rented STR during annual vacation to Orlando, FL

• Spouse of surgery patient rented STR near medical center in Boston, MA

• Business conference attendees rented STR in Philadelphia, PA

New Technology Has Brought Short-Term Rentals Into The Mainstream, Boosting Safety And Availability

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Vacation Rentals In The Past… …Vacation Rentals Today

Concentrated in classifieds sectionsEasy-to-use platforms with built-in maps of cities and traveler reviews

Limited availability of short-term rentals, forcing families to pay for multiple hotel rooms

Growth of Internet led to influx of short-term rentals, expanding options for travelers

Licensing, reviews and occupancy requirements give travelers and neighbors peace of mind

Safety and conditions of rentals unknown

Tourist hotspots restricted to city centers

Diverse array of neighborhoods reaping economic benefits of tourism

The Lack Of A Formalized State-Level Regulatory Approach For Short-Term Rentals Has Hurt Travelers And Homeowners

Solution: Coordinated state-level policies that respect rights of homeowners, expand choice for travelers, protect neighbors, and spur local business

No formalized regulatory approach to STRs creates two main challenges, specifically…

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Fragmentation Across Markets

• Fragmented and inconsistent movements, sparking some communities to regulate and others to prohibit STRs

• Uncertainty for homeowners and travelers regarding local rules

Lost Tax Revenue For Governments

• High opportunity costs, as STR owners provide valuable contributions to city funds through lodging taxes

• Concentrates tourism in hotspots, neglecting neighborhoods that stand to benefit from STR

Attempts To Address Short-Term Rentals With Regulatory Measures Should Adhere To Certain Core Tenets

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Work with new traveler trends and desires, not against them1

Respect property rights of all owners equally2

• If policymakers impose bans on secondary rentals, the market will return underground, eliminating any potential tax revenue

• Polls suggest residents favor smart short-term rental regulation, not prohibition

• Policymakers should not bifurcate primary and secondary properties

• Residential zones should maintain ordinances limiting disruptive active while rewarding responsible renters

Acknowledge that safety of STRs has increased dramatically3

• Acknowledged STRs as a driver of economic growth, underscoring the role they play in bringing travelers to underserved areas

• Imposed reasonable geographic caps on STRs, whereas other cities have banned the activity outright

• Did not bifurcate primary homes and secondary homes

• Outlined licensing requirements and mandated "good neighbor" policies

Nashville, TN

Several Cities Have Already Implemented Legislation That Could Serve As A Strong Model For Future Regulation

• Emphasized need to embrace innovation to support local job growth and to protect residential rights

• Enacted tax collection policies that guaranteed short-term renters would contribute to local revenues

• Implemented short-term rental registration process and called for regular updates on status of rental property

Galveston, TX

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Prohibitive Regulations Based On Circumstantial Evidence Have Complicated Public Perception Of Short-Term Rentals

STRs are not commercial entities; rather, they afford property owners the chance to earn supplemental income on secondary homes.

Regulations that inhibit the STR industry only succeed in hurting residents, travelers, and local businesses.

Potential Harm

Hotel Requirements

Zoning Laws

Housing Stock

Liability

• High compliance costs (e.g. infrastructure requirements) can squeeze responsible property owners out of the STR market

• Restrictive zoning laws that prohibit or severely limit STRs can confine travelers to certain areas

• Overregulation suppresses the growth of housing, as the financial incentive to construct is reduced

• STR bans inadvertently push STRs underground, raising liability concerns and squandering tax opportunities

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Disjointed Movements Across The Country Have Created Uncertainty For Homeowners And Communities

Ohio

Seattle

Hood River, OR

Los AngelesArizona

AustinSan Diego

DenverSan Francisco

NYC

New Orleans

Chicago

Boston

Nashville

Charleston

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Arizona STR Law (SB 1350)

• Prevents cities from creating legislation that would ban the listing and use of STRs

• Provides protections for both primary and secondary rentals

• Adds to a broader initiative aimed at promoting the sharing economy to create jobs and economic growth

• Simplifies STR tax collection process

• Underscores the benefits of STRs for local businesses

Pre-Emptive Efforts To Address The Growth Of STRs Can Lead To Fair Legislation That Appeases All Stakeholders

Moving Forward, Cities Must Respond To STR Movements With Policies That Respect The Needs Of All Stakeholders

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Travelers, especially families, need access to affordable accommodations located in authentic settings

Local businesses need opportunities to expand their customer base while continuing to provide high-quality products to local residents

Residents need reassurance that STRs pose no threats to their

well-being and to the fabric of their communities

Homeowners need a firm guarantee that any

regulations will protect their property rights

When well-regulated, STRs can bolster local economies and

strengthen community ties

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Questions

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