Homeowners look to the courts to weigh new short-term rental rules 

Short-term rental owners are looking to the judicial system to push back on what they argue are unfair restrictions. 

A Texas couple is suing officials in Fayetteville, Arkansas, alleging the city’s STR rules are “unconstitutionally vague.” The lawsuit also claims the STR ordinance favors residents over nonresidents. The couple had planned to rent out a property they bought in Fayetteville in order to live part-time near their daughter, who attends the University of Arkansas and requires frequent care for medical conditions. The case remains pending as the court considers the city's request that it be dismissed. 

Another recent lawsuit centers on whether a property changing hands alters the way STR regulations are applied. Two couples that co-own a home in Madison, Wisconsin, are suing the town for not permitting them to rent the property as a STR. They argue the city’s STR ban, in place since March 2022, does not apply to their property because the previous owner had been renting out the property on a short-term basis since 2017.

STR owners don’t always come out on top in the courts. A federal judge recently dismissed a lawsuit against Summit County, Colorado. The plaintiffs had argued the county’s STR caps were excessive and violated their rights. The judge was sympathetic, but ultimately found that the county had given sufficient rationale for the ordinance. 

STR platforms are also liable to court entanglements. A new class action lawsuit against Airbnb alleges the platform knows full well that some hosts are unauthorized to rent properties on a short-term basis, but still “enables and facilitates” the illegal rentals and collects “handsome” earnings. 

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:

• Hinsdale, Illinois: Local officials look on their way to banning STRs rented out for three months or less. (link) 
• Tahoe, Nevada: Stricter STR permitting and enforcement is under development as county officials seek to preserve affordable housing for the local workforce. (link)  
• Columbia, Missouri: City officials opted not to require a business license for STRs until 2026. (link) 
• Newport, Rhode Island: Officials could expand a ban citywide on new, non-own­er occupied STRs after restricting the rentals in certain residential zones in 2022. (link) 
• Merced, California: Local leaders shelved a proposal to increase the transient occupancy tax on local hotels and STRs from 10% to 12%. (link) 
• Buckhannon, West Virginia: Residents were pushing for an STR ban. The city attorney warned it would be in direct conflict with state law. (link)
  

Other Noteworthy News:

• Guru under fire: Los Angeles is suing a man who claimed to be a “seven-figure Airbnb host” – and marketed himself as a guru helping others navigate the STR market – for allegedly illegally listing properties on Airbnb (and giving guests false addresses). (link) 
• Weighing the cost: A new report from Hope College outlines some costs of a possible ban on STRs in Ottawa County, Michigan. (link) 
• Tourism tsunami: Axios reports on the impact of some 80% of travelers visiting just 10% of the world’s destinations. (link)