STRs: The invasion of the property snatchers
The advent of Airbnb-type short-terms rentals (STRs) is disrupting the national housing market like a bulldozer on steroids. So, what’s so alarming about a scheme that uses an on-line, peer-to-peer, computer lodging platform to encourage homeowners to rent their second homes to total strangers? Apparently, the negative impacts are so severe that STRs have been effectively banned in tourist destinations such as: Denver and Crested Butte, Colorado, New York City, San Francisco, Miami Beach, Santa Monica, Santa Fe, Los Angeles, and even Paris, Barcelona, and Berlin. STR operators who fly beneath the radar and do not apply for a permit make enforcement of regulations virtually impossible. That could be why so many jurisdictions ban STRs.
Covenant violations abound. A Google search reveals the most common STR complaints center on violations of neighborhood peace-and-quiet covenants. In fact, some overnight rentals have been used for porn shoots, meth labs, and sex orgies. Some homeowners, who feel their homes have been made less desirable by their greedy neighbors or by outside investors, are gearing up to file class-action lawsuits. Apparently, they would not have bought or built their dream home next to a motel. Some homeowners feel they have been subjected to involuntary rezoning from residential to commercial.
Local officials bewildered. Local officials are caught between the anguish of local homeowners (voters) over the disruption of their hitherto quiet neighborhoods and the commercial interests of the STR owners, most of whom cannot vote in local elections. Some investors buy up multiple second homes for the sole purpose of turning them into STRs.
Negative impacts on housing supply. With STRs reducing the number of homes available for long-term rentals, seasonal, tourist-industry workers, and even full-time locals, cannot find housing at affordable prices.
Enforcement highly problematic. The axiom: "You cannot manage what you cannot measure," applies to STRs. A high proportion of overnight rentals are operating without the knowledge of local governments. State-wide, the New York Attorney General found that 75-percent of STRs are illegal. Some STRs hide behind Delaware corporations, making the service of legal notices virtually impossible. Fines have no effect on STR operators who cannot be identified.
Taxation unfairness and health and safety issues. Typically, STRs are not taxed, if at all, at the same rate as hotels and motels that must provide working fire alarms, carbon monoxide detectors, lighted exit signs, and must submit to periodic safety inspections. Taxpayers complain about paying for health and safety inspections of STRs. In the mountains, where winter snow conditions can make some homes unreachable at times for emergency vehicles and for law enforcement, heavy snow falls can put unwitting overnight renters at physical risk. A bonanza for tort lawyers
Local elections impacted. Local officials, who cannot stop the red ink caused by their ineffective efforts to impose adequate fees on the STR property snatchers, could find themselves out of office. Alternatively, where the Initiative Process is available, voters might put the question of whether or not to allow STRs on the ballot. Or, elected officials might use the Referendum Process to allow the voters to decide. For sure, there will be law suits. Tort lawyers will prosper. For more, go to: http://nbr.com/2018/05/25/unwelcome-guests-airbnb-cities-battle-over-illegal-short-term-rentals/
©2018. William Hamilton.
Nationally syndicated columnist, William Hamilton, is a laureate of the Oklahoma Journalism Hall of Fame, the Nebraska Aviation Hall of Fame, the Colorado Aviation Hall of Fame, and the Oklahoma University Army ROTC Wall of Fame. In 2015, he was named an Outstanding Alumnus of the University of Nebraska. Dr. Hamilton is the author of The Wit and Wisdom of William Hamilton: the Sage of Sheepdog Hill, Pegasus Imprimis Press (2017). "Central View," can also be seen at: www.central-view.com.
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