In 2021, Jennifer Meyer spent most of her life savings on a house she planned to list on Airbnb. The 3-bedroom, 1-bath ranch in Fairview Heights, Illinois, sits in a residential neighborhood that caters mostly to working families and retirees. 

Before buying, Meyer, a paralegal by training, says she did her due diligence. She reviewed the ordinances that covered short-term rentals in her area, completed an anti-crime certificate program for rental owners and spoke with the then-director of land use to confirm her compliance with the law. She thought she was in the clear. “I wanted to be extra sure,” Meyer told Skift. 

After closing on the property, Meyer, 39, quit her job with the state of Illinois, walked away from her pension, and started on renovations.

“When I got my first booking, I felt disbelief and excitement,” Meyer remembers. “After all of our hard work, it was happening!” 

Meyer’s first guest was a travel nurse who worked at the local hospital’s Covid unit. In the subsequent months, she hosted an Amazon executive in town to restore a local warehouse damaged by a tornado and an Ohio police officer and their official K-9 police dog.

Meyer was thrilled; her neighbors, not so much. 

Several of them felt strongly that short-term rentals were not beneficial to the community. So strongly, in fact, that they lobbied the city council to change the ordinance governing properties listed on platforms like Airbnb and Vrbo. 

After the city council met on the issue, Fairview Heights enacted an ordinance requiring a 30-day minimum stay for renters, essentially banning short-term rentals. 

Alderman Pat Peck called the result a “compromise decision.” But that was little consolation to Meyer. 

“It really broke my heart, truly, when all of this happened,” Meyer says. “I really love that house.”

The Zone of Interest

In 1916, the United States’ first zoning ordinance came into effect in New York City. It wasn’t until just after the Gilded Age that America’s booming industrial revolution prompted governments to start separating different types of land use. 

As years passed, sweeping urban reform and development strategies became even more en vogue. During the mid-century, subdivisions and planned residential neighborhoods exploded in popularity. Suddenly, businesses were primarily located in one physical location and residential homes were largely in another.

The result – if you bought a house in a local suburb to raise a family, chances were the neighbors next door were doing the very same thing.

But that all changed with Airbnb, a company with a name so powerful it’s used as a verb for the entire industry. 

Now, scattered amongst the cozy bungalows with manicured lawns and white picket fences, you’re likely to find a few homes with no one living there full time. 

They’re used as short-term rentals – or STRs for short – with guests staying for anywhere from a night to a few weeks at a time. Renters might be there on vacation, in town for a girls weekend, or attending sporting events or concerts. Even some corporate travelers have made the switch.

Short-term rentals have turned into a lucrative side-hustle for many Americans looking to exchange their extra space for some extra cash. It’s also provided the key to first-time homeownership for many who previously found the costs simply out of reach.

And there’s big money at stake across the board – for individual hosts, property managers, and short-term rental platforms alike. As of 2023, the STR industry generated a whopping $165 billion and accounted for approximately 15% of the accommodations market, according to Skift Research. It’s projected to reach about $187 billion by 2025. 

Good Fences Make Good (Airbnb) Neighbors 

Jennifer Meyer’s situation is far from unique. Short-term rental hosts and their neighbors are feuding at a resounding rate. 

A homeowner in Southern California, Mrs. F, who requested anonymity, is one such Airbnb neighbor. She told Skift that her community dramatically deteriorated after an influx of short-term rentals. 

“Before they started into our neighborhood, it was quiet and we knew who lived here and who didn’t,” she said. 

When the house next door was sold, it was immediately turned into a short-term rental. “The first guest had a rager party,” she remembers. “And a dog that did nothing but bark the entire weekend. I love dogs, but come on.”

In June 2023, there was the SWAT stand-off in her neighborhood involving an Airbnb host that left one man dead. “That was absolute insanity,” she said. “Nothing like waking up to the sound of a flash bang. I myself don’t always feel as safe in my home as I used to.”

Now, Mrs. F laments many of her original neighbors are leaving because of the short-term rentals – and she fears more will just replace them. “The fact that the residential people are moving out in droves should say something about the impact.”

Party Down

A common complaint among unhappy Airbnb neighbors is noise. So-called short-term rental party houses popping-up in residential neighborhoods is the cause of most of this discontent. 

Airbnb said it’s seen a 50% drop in the rate of party reports since it started banning large gatherings in 2020 and has technology within the platform to weed out likely party planners. “Globally in 2023, fewer than approximately 0.035% of reservations on Airbnb resulted in an allegation of a party,” an Airbnb spokesperson told Skift. 

That’s still a lot of parties.

In residential Chicago, another short-term rental neighbor who we’ll call Regina (not her real name), said her issue with the Airbnb next door is that the host is not local. Rather, the home is owned by a corporation on the East Coast. 

Regina said there are minor annoyances like the overgrown lawn and trash being put out after pickup day. But there are also bigger issues as well. 

“We have a child and are not comfortable with the constant turnover of people,” Regina said.

Airbnb says it takes action against hundreds of accounts per year raised through its Neighborhood Support Line, a dedicated space created by the company to field complaints by those living in the same area as an Airbnb.

The Social Sphere 

When the topic of Airbnb owners vs. neighbors enters the chat on social media, both sides of the debate light up. It often devolves quickly.

On host-centered message boards, it’s common to see posts asking for advice on neighbors who are allegedly trying to sabotage guest stays by causing bad reviews, repeatedly calling the police and lodging complaints every time a new car pulls into the driveway. 

One host in Florida, who asked to remain anonymous for fear of further neighbor retaliation, said the people who live behind her STR run their lawn mower next to a shared fence for hours at a time hoping to annoy her guests and cause a bad review. 

On the other side of the issue, STR neighbors complain guests are loud and unruly and are ruining the quality of life in quiet residential areas. They say corporate investors are swooping in to buy real estate, which drives up prices and pushes out the locals. That, and there’s unattended garbage everywhere. 

In a Facebook Group called the “Rants of Airbnb Neighbors,” guerilla tactics are openly suggested. “Flood the place with lights, harbor bay wind chimes, bucket of chicken fat, fish guts will get rancid and may attract buzzards,” one member writes. “You need the guest to feel unwelcome and leave bad reviews.” 

Airbnb said it takes threats like these seriously and will assist law enforcement with investigations where appropriate. 

What’s in a Review?

There’s a reason we keep coming back to reviews. They are one of the most powerful ways to impact a short-term rental business. Listings live and die by them. 

Here’s why: When a host gets a 5-star review, Airbnb’s algorithm rewards the listing by improving its visibility on the website. The result is more potential guests viewing the home, which will likely result in more bookings. The cycle continues and a business is born. 

The flipside is when a host receives even a few 4-star reviews, never mind 1s or 2s – the listing is penalized harshly by the platform. Airbnb’s most coveted designations – Guest Favorites and Super Hosts – are largely determined by having almost universal 5-star ratings from guests. Lukewarm reviews cause hosts to lose these precious classifications and the listing may be relegated to the back of the algorithm, never to be easily seen again.

Both neighbors and hosts know this. 

In the “Rants of Airbnb Neighbors” group, some fed up neighbors suggest using the review system to their benefit and are taking matters into their own hands. “Have a friend rent it and leave a Very Bad review,” writes one member. “A couple of bad reviews will ruin a abnb, this is what you want!”

In the Eyes of the Law

When does the action of an angry neighbor become a potential legal matter? According to Laura Kaplan, a real estate attorney in Massachusetts who primarily represents owners of short-term rental properties, neighbors may cross a line when their actions fundamentally interfere with a host’s ability to have a rental property.

“This is a real threat to the business model,” said Kaplan. “If you feel like you’ve suffered damages – monetary harm – you could sue for that.” 

Short-term rental owners would measure those damages by looking at revenue they have historically made and then compare it to what’s coming in after any alleged retaliatory action taken by the neighbors, Kaplan said.

“A negative review absolutely will impact my listing,” said the Florida host with the lawn-mower-running neighbors. While it hasn’t happened so far, she said if she started to get negative reviews because of her neighbors, she would consider talking to an attorney.

Where the STR is physically located, if there’s a homeowners association, and the owner’s physical relationship to the property all weigh heavily.

Kaplan stresses the best route is often a non-legal one. “There’s suing, and then there’s winning – and then there’s having a lawsuit worth the cost,” Kaplan notes. “These are all separate questions.” 

High Drama at the City Council

Around the country, Airbnb neighbors have also started to organize. The common city council meeting is now one of the most likely places to hear heated public debate about short-term rentals.

In Texas, the TX Neighborhood Coalition provides information for homeowners with the aim to restrict and regulate short-term rentals. Its website provides step-by-step instructions and borrows from the tactics of old school community activism. They teach neighborhoods how to create mailing lists, document disturbances and work with the media on anti-short-term rental coverage. 

They also recommend running for office.

From Santa Ana, California to Pooler City, Georgia to Holland, Michigan, residents are flocking to their local town halls to be heard. 

But the results, and the way communities are handling STR neighbor-complaints, vary widely.

In Plano, Texas, the city council recently moved to bar new short-term rentals from opening in single-family neighborhoods – but grandfathered-in any already operating STRs. In Park Township, Michigan, authorities will start enforcing already-on-the-books regulations that fully prohibit short term rentals.

Where Mrs. F lives in California, the city council instituted caps on the number of STRs relative to available housing. And recall Fairview Heights, Illinois, the location of Jennifer Meyer’s house, now only allows medium length stays of over 30-days.

Some short-term rental owners have challenged the constitutionality of these ordinances in court, but most restrictions have been upheld, said Kaplan, because owners still have other viable economic options with what to do with their property other than using it as an STR.

“An owner may need to entertain having longer-term rentals, or whatever the ordinance allows,” Kaplan said. “These laws have been found generally constitutional, because there is still the ability to pivot in that manner.”

Jennifer Meyer said she’s out about $1,500 per month in lost income now that her property is restricted to a medium-term rental of 30 days or more.

Unsurprisingly, Airbnb doesn’t take this lightly. When it discovers a municipality is considering short-term rental regulations the company mobilizes. “We reach out to city staff and local lawmakers to share information about our trust and safety policies and input on best STR regulatory practices,” Airbnb said. They also let Airbnb hosts know how to contact their local representatives.

More Money, More Problems

But for all the friction, hassle, police and court time, municipalities do have a reason to want to keep short-term rentals in their area: money.

According to Airbnb, travelers who used the platform generated more than $85 billion in economic impact across the U.S. in 2023. They found for every $100 spent on an Airbnb stay, guests spent about $264 at local businesses like restaurants and shops. 

Airbnb also notes that because many listings are in areas outside traditional tourism hubs, those dollars led to approximately one million U.S. jobs and generated about $50 billion in income for workers. Guests also infused more than $24 billion in taxes to government coffers, including over $2.2 billion in tourism taxes remitted by the platform on behalf of hosts, Airbnb said.

When the Harvard Business Review examined how short-term rentals impacted local economic activity, it found that in places like Chicago with distressed neighborhoods, fostering STR development created a parallel surge of retail properties – creating jobs and adding value to the broader community. They recommended creating, “targeted policies,” noting that, “restricting STRs can have a significant, negative impact on local economic activity.” 

When Jennifer Meyer downloaded the income information for her STR from Airbnb, she says her property brought in approximately $2,700 to the State of Illinois, and would support a city tax to help local government.

What’s Next For Short-Term Rentals?

Anyone hoping that the debate over short-term rentals will simply go-away will find themselves out of luck. States, cities and neighbors will continue to battle it out with no easy answers in sight. And how municipalities are handling the disputes are as varied as the communities themselves. 

Individuals are largely deciding with their pocketbooks how they feel about short-term rentals. 

Regina, the angry neighbor from Chicago, says she and her family no longer use Airbnb or other short-term rental platforms when they travel. “It’s about the principal of these properties affecting the communities.”

While 300 miles away in Fairview Heights, Illinois, short-term rental owner Jennifer Meyer is still mourning the loss of potential from her first house, but despite the city council saga, she wasn’t deterred. 

Meyer recently opened up another short-term rental.

Sarah Kopit is editor-in-chief at Skift. Contact her at [email protected]
Graphics by Beatrice Tagliaferri

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