Many cities across North America are starting to realize short-term rentals aren’t nearly as scary an unknown as they’d been led to believe. Instead, they’re beginning to recognize that short-term rentals carry many economic and even community benefits – and have very little impact on available housing. Let’s dive in to some good news for vacation rental owners who’ve been worried about the rise in bans on short-term rentals.
People are making more bookings on HomeAway and VRBO – this article explains how Expedia has jumped into competition with Airbnb and that their efforts are paying off. HomeAway’s revenue jumped significantly in the last quarter, despite the substantially lower subscription fee to owners. Aligning its interests with owners is clearly paying off for HomeAway, but it also implies the short-term rental industry as a whole is thriving. And that’s good news – because we’re seeing a lot of evidence that cities are going to learn to embrace vacation rentals.
We’ve established that the short-term rental market is in high demand by travelers, but as we’ve covered before, many cities are cracking down on the use of privately-owned residences as short-term rentals – and owners are fighting back. In Nashville, a court just declared that restrictions on short-term rentals is unconstitutional. The ruling also points out a general problem with the way cities are attempting to regulate STRs: by classifying them as “hotels” in an attempt to shoehorn vacation rentals into an existing set of laws, cities are actually failing to create regulations that apply to private residences that are intermittently put to commercial use.
It’s time for cities to stop sleeping on the issue of how to regulate short-term rentals effectively, however, because vacation rentals do present a significant economic benefit. This article explains how Airbnb is driving money to local businesses – which is good news for local retailers and the city alike. The same logic applies to short-term rentals in general: when travelers use vacation rentals, they start spending money in areas away from the pricey downtown areas where hotels congregate, spreading those tourist dollars throughout the city. Many cities already recognize the value of short-term rentals, and their understanding is reflected in restrictions that ensure they can collect tax revenue and tourist dollars alike.
One criticism often leveled at STRs is that they reduce the amount of housing available for rental, a stance with which we vehemently disagree. The belief persists, however, because the way vacation rentals operate isn’t well understood by cities and it’s simpler to ban the unfamiliar than to investigate its potential benefits. This article proposes an alternative: why not acknowledge that short-term rentals are here to stay, and create policies that would encourage owners to improve their surrounding communities in substantial ways? Multiple cities have already found short-term rentals don’t affect housing availability – but do bring significant economic benefits. Most recently, we found studies conducted in Portland, Vancouver, and Toronto.
Here’s one final argument for cities to embrace short-term rentals: Millennials love them. Millennials were already travelling more than Boomers did, and they’re now the most frequent business travelers as well, with no sign of slowing down. Since Millennials represent the largest source of tourist income to cities in the years to come, it’s probably best to acknowledge that they’re going to demand short-term rentals be available to them. Cities need to create the policies that make short-term rentals a boon to their economy and communities – because Millennials will ensure this lodging option isn’t going anywhere.
If short-term rentals are here to stay, how can you get in on the market? We liked this article from the Washington Post on what to consider when buying an investment property. We think it pairs nicely with our own post on what to consider when buying a vacation rental – and if you’re looking for ideas on where to invest, check out our 5 dream vacation rental investment locations. Nashville, which we mentioned above as recently overturning restrictions on STRs, is on the list!
Want to enjoy more bookings even as the vacation rental industry continues to change? Evolve has been … well, evolving alongside the industry, and we’ve kept our owners’ booking rates high so they can continue to enjoy great revenue from their vacation rental properties. Learn how Evolve gets your vacation rental more bookings here.