Since founded in late 2007, Airbnb has emerged as one of the most popular short-term rental websites, with a current market cap of $86.5 billion (https://www.cnbc.com/2020/12/10/airbnb-ipo-abnb-starts-trading-on-the-nasdaq.html). Started in the US, Airbnb has properties listed in more than 200 countries. VRBO, TripAdvisor and Booking offer the same short term rental travel accommodations. These services have really helped people over the past few years, especially tourist who do not want to spend huge amount of money on hotels which are normally more expensive. However, with Airbnb IPO in December 2020 and the numbers of these short-term rentals rapidly increasing, a lot of cities are facing difficulties in finding the best way to regulate short-term rentals. City and County leadership have held council meetings, to discuss the best way to regulate short-term rentals in their respective jurisdictions. One of the most popular regulations imposed by cities on short-term rentals are to restrict short term rentals to the host’s primary residence. This means that the place being rented by the host should be the place the host lives for the majority of the calendar year (such as San Francisco requiring at least 180 days per year), or the place identified on the host’s personal document (such as Denver requiring a driver’s license or tax return). Regulating short term rentals helps to keep housing prices stable in a specific area. Recent studies have concluded that housing affordability suffers when short term rentals are not regulated. Most cities in California, such as Los Angeles, San Francisco, and Sacramento have established this restriction for quite a while now (https://www.harmari.com/harmaristr/2020/09/02/protecting-affordable-housing-through-primary-residence-restrictions-on-short-term-rentals/). Furthermore, with the COVID-19 pandemic still taking its toll, it presents government officials with an extra variable to consider. For example, 99 cities located in states of Delaware, Connecticut, and Florida decided to ban short-term rentals when the pandemic started to minimize the spread of the virus (link to our covid-19 blog showing restrictions). The City of Atlanta, Georgia is planning to regulate short-term rentals by increasing the tax rate to 8% during the pandemic (https://www.usatoday.com/story/money/2021/01/25/homes-near-me-atlanta-considers-ban-short-term-rentals/4246017001/). Obviously, different states do have different ways in regulating short-term rentals, depending on the situation they are currently in. However, a lot of cities and municipalities in the US decide to regulate short term rentals by banning them in residential areas. Many people will argue that this is one of the best solutions to overcome short-term rental problems. It is not. There will always be people who secretly use their homes as Airbnb, and this can be easily done without a trace. Instead, it would be way easier for cities to regulate them, since everything will be recorded properly by the city. At first, it might seem complicated to do so, but at the end of the day, regulating short-term rentals might be a better bet. Additionally, regulating short-term rentals will also help the city to oversee any issues regarding Airbnb, as well as the process of tax collection.
When the COVID-19 pandemic started in late 2019, safety has been an extremely important element for most people, especially tourists. That being said, the number of bookings for short-term rentals increased as people are generally more reluctant to stay at a hotel due to safety reasons. This should also be taken into account by government officials since some cities in Texas and California do experience an increase of almost 200% in short-term rental bookings. The increase in bookings is also followed by the increase of the average staying days, which again proves why cities and counties should choose to regulate short-term rentals instead of banning them (https://www.harmari.com/harmaristr/2020/09/30/recent-trends-in-the-short-term-rental-industry-coronavirus-and-beyond/). Moreover, cities should also emphasize safety measures such as the importance of wearing masks and using hand sanitizers to anyone who decides to stay at an Airbnb.
In conclusion, it is very important for government officials to make the right decision in terms of dealing with short-term rentals, using the variables mentioned above. It is almost impossible to get rid of short-term rentals in any area because there will always be one. Instead, cities have to take a different approach depending on the situations that the city is in (budget, tourist, citizen).