Investor activity is particularly notable in Sun Belt markets with strong population and rental growth. In early 2022, 28% of home sales went to investors buying single-family homes.
Good morning! Is it a toasty Tuesday where you are? What’s on your calendar for this week? I am headed to London to moderate a panel on regulations at the Short Term Rentalz Summit tomorrow. Are you attending?
Onwards! In response to a surge in short-term rentals, British Columbia Premier David Eby has introduced legislation aimed at curbing “profit-driven mini-hotel operators.” The proposed measures include new enforcement tools to address the expanding market.
What would change: If the new regulations are enacted, residents of British Columbia would be legally restricted to renting out only their primary residence and one additional secondary suite as short-term rentals. It’s important to note that these restrictions do not constitute a complete ban on such rentals, and smaller municipalities are excluded from these provisions.
Stateside, we’re looking at one thing that might change communities: investor-owned homes.
Investor activity is particularly notable in Sun Belt markets with strong population and rental growth. In early 2022, 28% of home sales went to investors buying single-family homes. This increase in investor activity persisted even as owner-occupant purchases declined, research from Harvard University’s Joint Center for Housing Studies found.
Skift reached out to CoreLogic, which provides real estate data, to learn the leading states where investors were buying up single-family homes.
You can read the full story here, but here’s a quote that didn’t make it into the copy.
“The big-guy investor, who owns like 100 or more homes, are the ones who got out of the market recently,” said Thomas Malone, chief economist at CoreLogic. “But the small investors are the ones who have actually kind of stepped up to take their place. Overall sales are down, but purchases by big investors are down much more than by small investors.”
Malone’s larger point is: Don’t underestimate investors with fewer assets under management. In a recessionary environment, it’s better to have more small investors for their resilience.
Dutch Landlords Challenge State
A consortium of housing rental companies in Amsterdam and Utrecht, operating under the Fair Rent Foundation, is taking legal action against the Dutch state, contesting the impact of the WOZ-CAP regulation. That’s a rule that has reclassified many properties in the two cities as social sector housing, reducing potential rental income for landlords. The companies claim this has forced some to sell rental properties, limiting tenant options, BNN News reported. While the compensation sought remains undisclosed, the case highlights a pivotal moment in the evolving rental market, emphasizing the need for balanced regulations that consider both landlord profits and tenant affordability.
Charlotte Residents for Regulations
Concerns about short-term rentals such as those listed on Airbnb and Vrbo have prompted some Charlotte, Vermont residents to call for regulation. The issue arose when neighbors discovered a nearby house operating as an Airbnb rental without a permanent owner present, The Citizen reported.
Complaints included overcrowded parking, disruptive traffic on a private road, and a lack of local oversight. According to AirDNA data, Charlotte had 53 active short-term rental listings in August, a 7% decrease from the previous year. However, the neighboring city of South Burlington had 75 active listings in March. Charlotte currently lacks a regulatory framework for short-term rentals, but discussions within the community and local government aim to address this issue and its impact on housing availability and the town’s future.
Toronto’s Ghost Hotels
Toronto is grappling with the emergence of “ghost hotels,” a moniker for short-term rentals listed on Airbnb in condo buildings. These properties are now raising concerns about their impact on local neighborhoods and rental prices, with approximately 600 such rentals found in just three condo buildings, according to advocacy group Fairbnb Canada.
The group is urging the city to investigate whether property management companies or hosts in these buildings falsely declare their units as primary residences to qualify for short-term rental permits, only to convert them into commercial rentals. In a housing crisis where every unit matters, the rise of STRs is diminishing the availability of affordable housing and driving up costs and rents, compounding Toronto’s existing affordability challenges, BNN News reported.
Sonder Expands in Southern California
Sonder is expanding with three new properties in Southern California, including two office-to-hotel conversions. The Winfield and The Craftsman are located in downtown Los Angeles. The third property was in Orange County, California. These additions join Sonder’s existing properties in Beverly Hills, Inglewood, and Santa Monica.
In Case You Missed It: Airbnb Blocked From Banned Buildings
Following the recent enforcement of New York City’s host registration law, a landlord has secured a temporary restraining order against both Airbnb and a host. This legal action pertains to the listing of a short-term rental in an Upper West Side apartment building, which was included on the Office of Special Enforcement’s prohibited building list.
The Rosenberg & Estis law firm, representing property manager Canvas Property Group for the building owner, is hailing the recently obtained temporary restraining order as a groundbreaking success. In late October, both parties will engage in a legal battle to secure the permanent status of the restraining order in a New York state court.
Note: The Short-Term Rental Report won’t be published Wednesday, but we’ll be back Thursday and Friday this week.
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