Nov 27, 2019

Cities see red over short-term rental party houses

Animated illustration of a neighborhood at night with the house in the center showing flashing colored lights.

Illustration: Aïda Amer/Axios

Private properties in Sunbelt tourist magnets are increasingly up for rent on short-term-rental platforms like Airbnb, HomeAway and Vrbo — prompting some local officials to fight back.

Why it matters: Cities are on edge after some high-profile incidents, including a shooting that killed five at a Halloween party held at an Airbnb rental in a San Francisco suburb last month. Afterwards, Airbnb banned "party houses" and cracked down on unauthorized conduct.

The big picture: A chief complaint against home-rental companies has been their potential impact on housing prices in already unaffordable places. In some markets, the bigger complaint is that rental properties are becoming such popular alternatives to hotels that they are drastically changing the nature of neighborhoods — and even chasing away families.

What's happening: Residents are becoming peeved in communities across the country.

  • A home near Naval Base Point Loma in San Diego is consistently a party scene, and residents worry Airbnb's rules won't be enforced, per NBC 7 in San Diego.
  • A shooting at a house party at a rental home in Plano, Texas, spurred residents to push the city to take action, per CBS 11 News.
  • Some Cape Cod residents report endless bachelorette parties, blaring music and fire pits that have fundamentally changed the neighborhood, per NBC 10 in Boston.

What they're saying: The trend was a hot topic of conversation at last week's National League of Cities City Summit in San Antonio. Elected officials from many small and mid-sized cities decried the rise of outside investors snapping up homes as rental properties, and the increased cost to public safety in dealing with disturbances.

  • In Tennessee: "We're seeing homes in neighborhoods turned into party houses with police having to be called out every week," said Nashville City Councilwoman Gloria Hausser. "We're seeing families needing to move out because it's not a neighborhood anymore."
  • In Florida: Ormond Beach City Commissioner Troy Kent said neighborhoods in his beach-town community have been overrun with short-term rentals. He no longer knows his neighbors and routinely witnesses behavior that requires public safety's attention. "It's wildly inappropriate," he said. "That's not what my constituents signed up for. There's zoning for that."
  • In Texas: College Station Councilwoman Linda Harvell expressed concern that short-term rentals can cost the city more due to police calls and clean-up needs, yet they don't necessarily pay occupancy taxes like hotels are required to.

The other side: Amanda Pedigo, vice president for government affairs at Expedia, which owns short-term rental platform Vrbo, said the company wants to work with cities to develop regulations for rental properties to alleviate concerns.

  • Vrbo has set up a portal for neighbors to file complaints about properties. "We're committed to getting rid of party houses," Pedigo said, adding that all short-term rental owners should be paying hotel occupancy taxes.
  • Seattle is one major city that has regulated short-term rentals to cut down on abuse. Most rental operators can operate only two units. Seattle set up a special tax on short-term rentals equivalent to what hotels pay.
  • San Francisco's rules allow only permanent residents to host short-term rentals. Rentals without the owner present are limited to 90 days a year.

The catch: Legislatures in some states, including Tennessee, have passed laws on short-term rentals. But some city officials say state-wide laws can limit city-specific restrictions that try to go further.

Editor's note: This story has been corrected to reflect that Tennessee's law does not pre-empt cities from passing short-term-rental ordinances.

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