Our weekly news round-up below highlights core macro trends in the U.S. short term rental (STR) market:
- Local jurisdictions continue to pass laws limiting or banning STRs; while state governments attempt to keep the power to regulate those laws at the state level
- Despite all of this, the vacation rental market is strong and continues to project strong growth (5% per year over the next 5 years)
- STRs are good for home prices; which means by definition, banning STRs is bad for home prices
The last point is an important one: many STR laws are passed, in part, to protect against a perceived housing crisis. However, if governing bodies see that STR laws are hurting home prices – an obviously unpopular concept – we may see a decrease in attempted STR laws around the country. (Granted, there is some merit in decreasing home prices helping in housing affordability. We’ll see if that desire wins out should people see their home values drop.)
A recent realtor.com analysis of Palm Springs’ home prices in the wake of its 2022 limit on STRs provides data behind this idea. They found that:
- “After Palm Springs’ new short-term rental regulations were in place, listing prices per square foot here didn’t just level off as they did throughout the Coachella Valley—and even the rest of California. Instead, they actually dropped by 4.5%”
- In 2023, some areas in the Coachella Valley saw more price reductions compared to a year earlier, while others saw fewer… Palm Springs, however, led the Valley in price cuts by several percentage points, with 22% of home sellers slashing their prices in 2023—more than at any time since 2019.”
To forecast how STR laws will develop around the country, keep a close eye on the impact of home prices on legislation.
Below, please find Property Guard's weekly short term rental regulation round-up, highlighting state and local news regarding short term rental regulations to regulate (or prohibit) Airbnbs and other STRs. If you want a comprehensive data solution on STR regulations in all 20,000 state and local jurisdictions, contact us here.
New and Proposed Regulations:
- Hawaii: Bill progresses in legislature that will allow counties to regulate (and even ban) short term rentals (link)
- Florida: Pressure builds for Florida governor to veto new STR legislation that limits local jurisdiction’s ability to regulate short term rentals (link)
- Asheville, NC: Buncombe County Planning Board working on new set of short term rental laws that will significantly reduce total listings (link); local businesses lobbying against laws (link)
- Peachtree City, GA: STR laws in process that include a cap of 1% of households only allowed to have an STR permit (link)
- Narragansett, RI: Counsel approves STR rules that reduce number of permits, disallows STRs to host events, among other changes (link)
- Lewisville, TX: Once its current one-year STR ban expires, Lewisville’s new short term rental laws will go into effect (link)
- Anchorage, AK: Bill up for vote to regulate, tax STRs (link)
- Anacortes City, WA: City council bans short term rentals in a 4-1 vote (link)
- Ithaca, NY: STR regulation moves forward; would only allow primary resident to list short term rentals, disallowing corporate ownership (link)
- Rockwall, TX: STR rules in process to regulate STRs (link)
- Plano, TX: New law requiring registration of STRs open for public comment (link)
- San Marcos, TX: New STR rules limit total permits (link)
- Skokie, TX: STR rules proposed including a cap on total number of listings (link)
- Park Township, MI: STR laws passed in March being temporarily withheld as lawsuits progress (link)
- Watertown, MA: Planning board of town supports limits on short term rentals (link)
- Caroga, NY: New STR law requires permit, fees in this Adirondack town (link)
Other Noteworthy News:
- Palm Springs STR Cap Hurts Home Values: Since a December 2022 STR law in Palm Springs significantly capped the number and operation of STRs in the town, real estate market has softened; nearby towns (without the same legislation) haven’t have the same trends (link)
- Vacation Rental Market Growth: Over the next 5 years, the vacation rental market is to grow at an annual rate of 5.1%, to $57 billion (link)
