Dallas Short-Term Rental Alliance Sues the City

Good morning, readers. I was off the clock when this broke Monday night, but among the latest short-term rental alliances to sue a big city is one in Dallas. 

The Dallas Short-Term Rental Alliance filed a lawsuit against the city, alleging that recently enacted regulations prohibiting short-term rentals in single-family neighborhoods violate constitutional and property rights. The lawsuit, filed on Monday, also alleges discrimination against short-term rental owners and operators. 

Approved by the Dallas City Council in June, these new rules are set to be enforced starting in December. The group seeks a court order to prevent the city from implementing these regulations. 

We have seen the different ways these things can go: Like in Austin where a court ruled in favor of homeowners, or in New York where Airbnb’s lawsuit was dismissed. 

If rentals continued to be banned in single-family neighborhoods, that would change the makeup of rental supply but also skew ownership towards investors and developers building in zoned areas.

Hotel prices might see a temporary surge and then again, but they might eventually level off.

At the Skift Global Forum last week, Booking Holdings CEO Glenn Fogel, commenting on the New York City clampdown, said:

“Maybe there are other ways instead of a blanket [bans], maybe there are better zoning that could do it, working out better for everybody. But every municipality that has a large influx of tourism, tourists, they’ve got to work these issues out because there are competing interests here,” he said. “And sometimes people say, ‘well, how about just price? Why don’t we just put in a really big tourist tax on it?’ But then only people who have more money could then visit. And maybe that’s not fair either. So I’m glad I’m not a politician, but I do believe we have a responsibility to participate and try and make sure this is what is the optimal solution for all the stakeholders.”

If New York City is anything to go by, one interesting possibility is many of those rentals will still continue to operate on the black market. 

KeyData Partners with Australian Short-Term Rental Association

Key Data, has entered into an exclusive partnership with the Australian Short Term Rental Accommodation Association (ASTRA). Under this collaboration, Key Data will furnish ASTRA with essential industry and market data for educational purposes and to inform government bodies, media outlets, STRA industry stakeholders, and ASTRA members about vital insights and trends. With this, all ASTRA members will gain access to Key Data’s business intelligence and benchmarking tools at a preferred member rate. 

Columbia, South Carolina’s Regulatory Journey

Columbia, South Carolina’s efforts to regulate the short-term rental market have yielded fewer permits than anticipated, with just over 200 property owners obtaining permits, a fraction of the initial projections, The Post and Courier reported.

The Columbia City Council introduced regulations in April mandating permits for properties available for rent for 30 days or less, aiming to oversee this burgeoning sector. During the application window from May 4 to September 5, the Code Enforcement Division issued 233 permits, falling short of expectations — the division identified several hundred additional properties without permits, prompting the issuance of 214 letters on September 25, notifying owners of the need to apply. 

Columbia had nearly 1,000 listings in August, though this figure doesn’t distinguish between properties within the city and those in unincorporated Richland County. Across South Carolina, various cities and counties have implemented their own regulations, including caps on permits and zoning restrictions to manage the short-term rental industry. 

Safely’s New Money

Atlanta-based insurtech firm Safely raised an additional $8 million in funding, led by Highgate Technology Ventures with participation from LAGO Innovation Fund to further expand in Europe, Short-Term Rentalz reported.

Established in 2013, Safely specializes in offering insurance policies tailored to rental properties, with coverage for personal injuries as well as damage to property contents and structures. In addition to insurance, the company also offers a guest screening solution, providing background checks. Since its inception in 2015, Safely has garnered approximately $16 million in funding and an additional $4.5 million in venture debt.

Elsewhere on Skift

Executives at the Skift Global Forum 2023 challenged the notion that hotels and short-term rental managers are in direct competition, asserting that they cater to distinct customer needs. While the current landscape sees peaceful coexistence, looming growth ambitions from both hotels and Airbnb suggest potential future competition.

Hilton‘s CEO, Christopher Nassetta, and Airbnb‘s Brian Chesky emphasized the divergence in customer preferences between the two sectors. Attempts to professionalize short-term rentals to emulate hotel experiences have yielded mixed results, with concerns over maintaining quality control as these companies expand.

“In a break with the past, hoteliers’ and Airbnb’s growth ambitions point toward rising competition for similar customers,” writes Skift’s Sean O’Neill

Airbnb and Hotels: Growth Ambitions Could Threaten Peaceful Coexistence