St. Louis approves new STR fee- Is more regulation coming ?

Question

Curious how other investors are looking at this- St. Louis officially approved a new 3% fee on short-term rentals under 30 days, along with additional licensing and compliance requirements.

This isn't about just the 3% fee itself (and the licensing requirements)  - it's about it being yet another step toward cities treating Airbnb-style rentals more like regulated hospitality businesses instead of the 'everyday' landlord investment properties.

The direction seems pretty clear:• more oversight• more compliance• more fees• more process

I don’t think this suddenly makes STRs bad investments- many  properties will still do very well. But I do think the margin for error keeps shrinking, especially for highly leveraged deals or properties that only work if occupancy stays extremely high year-round.  I notice more investors starting to prefer mid-term rentals with 30+ day stays instead. Not only is it less regulation & turnover -  in the right locations  the numbers can still work really well without relying on constant 2 day bookings.

To me, this is really becoming more of an operational and risk-management conversation than just a cash flow conversation. Curious what investors in other markets are seeing.

Michael Baum · Answer

Idaho just passed protections against local municipalities/counties trying to regulate STRs.

Michael Koeplin · Answer

I think this is exactly the right framing: STRs are increasingly becoming an operational and risk-management business rather than simply a real estate cash-flow business.

The 3% fee by itself probably isn’t what changes the economics for most operators. The bigger shift is cumulative complexity:

• licensing
• inspections
• tax compliance
• occupancy rules
• insurance requirements
• local permitting
• platform regulation
• neighbor complaints
• evolving municipal enforcement

Each individual layer may seem manageable, but collectively they increase operational overhead and reduce margin for error.

I also think this trend has important insurance and liability implications. As municipalities increasingly view STRs more like hospitality operations than traditional rentals, underwriting assumptions and regulatory expectations may continue evolving in that direction as well.

The operators who probably adapt best long-term will be the ones treating STRs less like passive investments and more like professionally managed operating businesses with:

• compliance systems
• operational controls
• documented processes
• proper risk management
• capital reserves

I don’t necessarily think that’s bearish for the industry, but I do think it raises the bar operationally.

Michael Koeplin

Sam Kapp · Answer

You’ve framed this right — it’s a risk-management conversation now, not just a cash-flow one.

The underrated cost isn’t the 3% or the license fee. It’s the operational drag of keeping up. St. Louis adds a fee this year; meanwhile another city you’re in quietly moves a renewal date or adds a posting requirement, and there’s no central place that shows up. And it’s a pain across multiple markets.

Genuinely curious for those of you in multiple markets: how do you actually stay on top of permit renewals, tax deadlines, and rule changes across cities? Spreadsheet? CPA? Memory and hope? Never found a clean way to do it myself.

Daniel O'Neill · Answer

North Carolina also has state level protections. Doesn't stop municipalities from trying things though. Fees etc.

Andrew Steffens · Answer

Thats tough.  Hard to run a business when a group of local "leaders" can hold a meeting and vote you poor or out of business.  Florida and Arizona have good state level protection to help guard against this.

John Underwood · Answer

New rules make more regulation easier.

Mike Grudzien · Answer

Ouch!

St. Louis approves new STR fee- Is more regulation coming ?

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