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“Planning and Regulating

Short Term Residential Rentals

in Small Towns and Rural Areas”

DWIGHT H. MERRIAM, FAICP

ROBINSON & COLE LLP

Part of the Trend of Sharing

Transportation Network Companies …

• Cars

– Zipcar

– Enterprise

– Turo

• Ridesharing

– Uber

– Lyft

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Peer-to-Peer or Collaborative Consumption

• Service

– TaskRabbit

– Skillshare

• Goods

– Listia

• Space

– Airbnb

– HomeAway

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Airbnb

• Founded 2008, San Francisco

– Two roommates with air mattresses

• 600,000+ hosts

• 3,000,000+ listings

• 150,000,000+ guests

• 191+ countries

• 65,000+ cities

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Airbnb

• 6-12% commission above rental

• 3% listing fee

• Profits of $3.5 Billion by 2020

• Capitalized value of $30 billion

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Do you have any short term rentals listed in your small

towns and rural areas?

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Centennial, CO

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Fairbanks, AL

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Provincetown, MA

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Weston, CT

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Collegedale, TN

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Charlottesville, VA

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Tivoli, NY

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Leavenworth, KA

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Jeffersonville, IN

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St. John the Baptist Parish, LA

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Ann Arbor, MI

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Charles Town, WV

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Martin County, FL

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Pendleton, OR

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Duluth, MN

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Lenox, MA

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Grand Island, NE

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Morton County, ND [Breien]

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Helena, MT

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Taft, CA

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Columbus, OH

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Detroit, MI

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Clayton, MO

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Kingsport, TN

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Grand Junction, CO

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Jackson Heights, NY

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Hutchinson, MN

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Benbrook, TX

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Ashburn, VA

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Stakeholders

• Hotel owners

• Unions

• Municipalities

• Landlords

• Co-operative and condominium owners

• “Hosts”

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Short-Term Rental (STR)

“We define a ‘short-term rental’ (STR) as a residential property that is rented to a visitor for less than 30 days.”

-Short Term Rental Advocacy Center

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Questions You Might Ask

• Are they hotels?

• What if they are rented for longer periods?

• How are they used? – Vacations

– Business

– Temporary lodging during renovations

– Visiting patients

– Family gatherings

• Does it matter how they are used?

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What Are You Trying to Achieve with Regulation?

• Preservation of single-family values?

• Avoidance of commercialization?

• Better property stewardship?

• Protecting appearance?

– Too many cars?

– Too much activity?

– Noise?

– Trash?

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Benefits and Burdens

• Will additional income result in better maintenance?

• Can aging in place may be facilitated? • Is it possible that people forced out by

economics may be able to stay? • Can you meet housing needs for certain

demographics? – Young person returning to town – Divorced man – Abused wife – Foreclosed property owner

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Benefits and Burdens

• Will regulation create willful violators?

• Could it reduce housing supply and affordability?

• Will failure to regulate endanger people?

• What will be the impact on taxes?

• Do owners need counseling on insurance and mortgage covenants?

• What about existing covenants and easements?

• Is it zoning?

• How do you enforce?

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Is It Economic Development?

PROMOTION OF ECONOMIC DEVELOPMENT THROUGH THE VISITORS INDUSTRY

WHEREAS, communities throughout the United States rely on local hotel taxes to promote travel and tourism and support the local visitors industry; and WHEREAS, local hotel taxes often fund convention and visitors bureaus, convention centers, sports arenas and sports teams; and WHEREAS, local hotel taxes often support local cultural programs including music, film, gaming, visual arts, dance and more; and WHEREAS, short-term rental of homes can often be subject to hotel taxes; and

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WHEREAS, short-term rental of homes can provide a flexible housing stock that allows family travelers spending longer periods of time in a community a safe accommodation while contributing to the local economy; and WHEREAS, short-term rental of homes can provide homeowners an opportunity to hold property as an investment, for a better sales market, or for future planning; and WHEREAS, fair regulation of short-term rentals ensures greater compliance and greater receipt of local hotel taxes; and WHEREAS, regulations of short-term rentals that establish a reliable way for a municipality to identify and contact the short-term rental owner, make the tax collection and remittance obligation clear and treat the short-term rental owner the same as long-term rental owners can achieve the highest level of compliance; and WHEREAS, onerous regulations of short-term rentals can drive the industry underground, thus evading local regulations and local hotel taxes;

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NOW, THEREFORE, BE IT RESOLVED, that the U.S. Conference of Mayors urges support for economic development opportunities through the visitors industry by encouraging regulations of the short-term rental industry that (1) establish a reliable way for the municipality to identify and contact the short-term rental owner; (2) make the tax collection and remittance obligations clear to the short-term rental owner; and (3) treat short-term rental tenants the same as long-term rental tenants. Regulations that accomplish all three can achieve a high level of compliance, and are highly effective.

RESOLUTION ADOPTED JUNE 2012

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Planning

• What is the need?

• What do you have now?

• What is the market?

• In what zones?

• How many where? – Austin, Texas by census tract

• In what structures? – New?

– Old?

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How Do You Permit?

• As of right?

• Site plan?

• Discretionary, site-specific approval , e.g. special permit?

• In an overlay zone?

• With a floating zone?

• Forever or for a term?

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What’s in the Regulations?

• Definition

• Process

• Fees

• Submission requirements

• Reviews

– Fire

– Police

– Health

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• Prohibition on commercial activity

• Parking

• Duration

– Owner present or not

– Compensation or not

• Number of guests

• Notification of neighbors

• Safety inspections

• Licenses, fees, taxes

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Questions and, we hope,

some answers…