• Leaders in cities such as Atlanta and San Diego have aimed to limit short-term-rental activity.
  • Atlanta lawmakers want short-term rentals to be licensed and to fine owners who violate city laws. 
  • Some short-term rental owners are pushing back against government regulations. 

Short-term rentals became a go-to asset for real-estate investors in cities such as San Diego, Detroit, and Philadelphia during the pandemic as low interest rates and federal stimulus dollars made it easier and cheaper to buy investment properties.

According to AirDNA, as of September there were over 6.1 million short-term-rental listings, up by 19% from September 2019. But lawmakers and housing advocates say that too many properties listed on short-term-rental sites like Airbnb and Vrbo makes it hard for regular homebuyers to compete for houses.

Investor-owned Airbnb rentals have become so ubiquitous that even The Onion has skewered the trend.

In some cities, government officials are trying to regulate the number of short-term rentals that investors can purchase. New regulations have pitted municipalities against corporations and mom-and-pop investors alike by requiring short-term-rental operators to be licensed or by requiring that homeowners live in the properties they plan to rent out.

Cities fight back

This spring, San Diego’s city council adopted an ordinance that would cap short-term-rental properties at 1% of the local housing stock, or about 5,400 units. At the time, there were thought to be more than 12,000 short-term rental properties in the city, the La Jolla Light reported.

A view of the San Diego Convention Center and the harbor. Foto: Steve Proehl

“The sad fact is that the housing stock in Ocean Beach has been decimated by short-term vacation rentals,” Gretchen Newsom, a San Diego resident, told The San Diego Union-Tribune in March. “I have watched over the years as properties on our block get snapped up by investors and get transitioned to short-term vacation rentals.”

Nearly 2,100 miles east, in Atlanta, Mayor Andre Dickens has been pushing for greater regulation of the short-term-rental industry. In March 2021, Atlanta’s city council adopted an ordinance requiring landlords of short-term rentals to register with the city and imposing a $500 fine for each violation committed by their tenants.

In the first quarter of 2021, according to Redfin stats, about 22% of homes sold in Atlanta were purchased by investors, making it the second-busiest market for investor purchases in the country.

Andre Dickens, the mayor of Atlanta. Foto: Courtesy of Andre Dickens

“We’re using every resource at our disposal to ensure that the people who call Atlanta home have access to quality, affordable housing regardless of their ZIP code,” Dickens told Insider in October.

Groups like the Atlanta Metro Short Term Rental Alliance have challenged Atlanta’s short-term-rental ordinance, and enforcement has been delayed several times; it’s now set to go into effect next March.

“A lot of the horror stories that get out are a very few bad apples,” Rich Munroe, the president of the alliance, told The Atlanta Journal-Constitution in August, describing complaints the city had received about short-term-rental houses.

The debate over short-term rentals in Atlanta is emblematic of similar debates in other cities. For instance, voters in Colorado towns like Dillon, Aspen, and Steamboat Springs this year approved measures to tax short-term rentals to help regular homebuyers afford homes.

AirDNA indicates each of these cities has more than 1,000 short-term rentals, and each has a median home price above $1 million, according to the Colorado Association of Realtors. Steamboat Springs led the way with roughly 2,900 short-term rentals, according to AirDNA, compared with the city’s nearly 10,000 total housing units, according to census data.

A representative for Airbnb told Insider in an emailed statement: “Over the last decade, Airbnb has worked with hundreds of cities to put in place regulations that balance the economic opportunity short-term rentals create while also protecting communities and supporting local tourism, and we are committed to doing the same moving forward.”

Residents feel the squeeze

Residents of Joshua Tree, California, say they’re also feeling the squeeze from Airbnbs and similar rentals. Kerrie Bradsford, 43, who’s lived there for more than 25 years, told The Guardian in September that longtime residents had been disoriented by the rapid growth of short-term rentals in the area.

There are more than 1,300 short-term rentals in Joshua Tree, according to AirDNA, compared with a population of 7,700. Zillow indicates that home prices in Joshua Tree have increased by 17.5%, to $434,000, over the past year.

In April, The New York Times described the flood of short-term-rental investment in Joshua Tree as a gold rush and questioned whether the delicate desert region’s housing market could support all of its Airbnb listings.

“Our neighborhood isn’t a neighborhood anymore,” Bradsford told The Guardian. “Literally we do not know who could be in the house next door tonight, or tomorrow night.”

While government officials seem keen to enact regulations, short-term-rental owners like Steve Milo, the CEO of VTrips, say the regulations should come from short-term-rental companies and help them rebuild their relationships with local communities.

“There have been far too many accounts of vacation rentals keeping neighbors awake, causing trouble or even being sites for serious crimes,” Milo wrote in an opinion article for Forbes in November. “This is a company-level problem; too many organizations have little regard for hospitality and homeowners.”

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