Pandemic Moves Short-Term Rental Regulation More Quickly Into Public-Private Collaboration

In sharp contrast to last year’s fiery exchange about a rapidly growing short-term industry, at this year’s Skift Short Term Rental Summit representatives on Wednesday from both the hotel industry and rental platforms as well as policymakers and former city officials expressed their optimism in experiencing a more collaborative approach to sharing the short-term rental pie.

They also expressed hope for crafting short-term regulations that work for all involved: the city, the public sector, the tourism industry, and communities.

“The industry came in and we weren’t ready as municipalities and now we’re ready for those conversations and I’m excited about them,” Clarence Anthony, CEO and executive director of the National League of Cities said, thinking back to when short-term rentals were new versus how far discussions have come.

Amanda Pedigo, Expedia vice president of government and corporate affairs, agreed, noting that the industry now had a unique opportunity to “set the rules of the road for the sector, and I think those rules of the road can only be accomplished via collaborative partnership between the industry, elected officials and people from throughout the sector.”

Cities Can Learn from Short-Term Legislation That Works

In looking back at successful short-term regulation schemes, Tim Burgess, former Seattle mayor and city council member, shared Seattle’s example, which first considered short-term legislation in 2016. “The impetus in Seattle came from the affordable housing advocacy community, fearful of a great expansion of short-term rentals would harm the long term rental market in the city—that was the original impetus for how Seattle began considering regulations.”

Burgess noted that cities also have a basic public health and safety obligation to make sure short-term rentals are safe, not to mention that whether a customer has a pleasant experience also falls within the purview of cities and towns across the country.

The key to Seattle’s legislation working well, according to Burgess, is that the city took the time to listen to every part involved in and impacted by short-term rental business, from tourism stakeholders to neighbors, to condominium owners and short-term rental providers. Anthony pointed to the fact that when short-term rentals first appeared, it was also “the digital nature of the short-term industry” that exploded in a way cities had not anticipated and that there were no best practices at the time.

“As we look at the growth that developed in the industry, our municipal leaders are interested in engaging with it,” Anthony said. “They can learn from others that have gotten their feet wet in this. They’re interested and I’m excited how we can share those best practices.”

The Economic Benefits Are Huge and Inclusivity is Key

The economic revenue that short-term rentals bring in to their destinations, from restaurants to local businesses cannot be overstated, particularly post-Covid when more people are venturing away from home temporarily. In tandem with the economic benefit, however, Anthony noted that “it has to be about good public policy” as far as the benefits from short term rentals. “When we talk about affordable housing and building wealth, for people of color, specifically, this could be a major opportunity to create business opportunities from all kinds of services […]. I don’t think that was the conversation initially. More and more we’re seeing that municipal officials want to have a conversation about how do you plan the youths and the zoning processes so that it’s integrated in an effective manner.”

It’s a conversation that the short-term industry needs to have with cities and understand as far as city officials’ concerns that go beyond the economic revenue for local businesses, if not building inclusion as well as minimize negative impacts via the short-term rental industry.

Burgess noted his motivation as a former mayor was to reward the entrepreneurial spirit of individuals and not snuff that out, thus focusing on public health and safety but also making sure its actions did not harm this opportunity to create wealth and build long term economic stability.

Regulations will Be City and Community Specific

In discussing the recent San Diego case and locals’ hesitancy to legitimize short-term rentals which went on for years, Expedia noted that it encouraged a conversation to find specific limits that work for San Diego. “We recognized that there need to be all stakeholders at the table when we’re trying to shape effective regulation and so in San Diego, I’m proud of the work we did to work collaboratively with the local labor union who have been historically adamantly opposed to vacation rentals.” Pedigo also noted that the Expedia Group managed to sign a memorandum of understanding with the city of San Diego on fair and effective regulation and is now moving through city council which it expects to pass by the time the next Skift Short-Term Rental takes place in 2021.

More states are now interested in having this conversation with Expedia, Pedigo noted, including Florida, which preempts regulation of vacation rental use and occupancy to state level, as well as other states interested in establishing a statewide standard and determining the parameters.

Anthony countered on state preemptive bills, that, while he understands why an industry would want to go to the state level, for cities it’s about local control.

“There has to be a strategy put in place that provides some flexibility to those communities as you try to develop a welcome mat to the industry. Every city is different, every community is different, and how you manage and communicate with those leaders and citizens in how they craft a place they call home and a neighborhood they call home is important to us.”

In the end, a good policy is one where the industry remembers that cities are businesses as well that need to pay for the use of public services and have to look at data in determining what works for communities, Anthony said, adding that key factors include fair regulation so that housing affordability is available, as well as safety and understanding how the rental community fits with the culture of the short-term rental community.

The Industry has a Role to Play In Community Recovery

Panelists agreed that the trend of people working remotely and moving away from urban communities, traveling slowly and staying in short term rentals is likely to continue. This new way of life is here to stay. What’s the key takeaway from this new spirit of collaboration among the city officials, the tourism industry and short-term rental businesses?

“I want to see more people get jobs out of the industry,” Anthony said. “Covid has unveiled that people of color are struggling and I want the industry to reach out and be good neighbors in that way as well. We need to wake up and say we have a role in the industry to play as well.”