Movement to ban STR's

Short-Term & Vacation Rental Discussions

Movement to ban STR's

Real Estate Agent · Colorado Springs, CO · Member since 2017 · 224 posts · 201 votes

I've been trying to follow what is happening on the STR front nationwide and would love to hear from BP members about what's happening in your particular city/location as far as restrictions? When we bought our property in Colorado Springs, I knew there was a chance we only had a window to do STR's in as I saw Nashville beginning the start of a ban. A year and a half ago, the city of Colorado Springs was extremely STR friendly. After we closed on our property, we heard about restrictions being discussed and I was very involved in that whole process. The permitting process and rules which were instituted at the start of this year seemed very fair and reasonable to people on both sides of the issue. Somehow in the past several months, all on our city council except for two members have decided they pretty much want to ban any further STR's other than owner/occupied despite the lack of any verifiable data showing any issues (no permits have been revoked and very, very few complaints to code enforcement). I do believe they will grandfather in those who currently have a permit. We had quite a bit of success at the start by banding together and forming an alliance of owners, but that influence doesn't seem to be helping at this point. I did see the Texas State Appeals Court just struck down the city of Austin's attempts at banning non-owner occupied which could mean more STR owners will turn to the legal system if they feel the city isn't treating the issue fairly. If you are an STR owner, I'd love to hear what your city is doing?

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Chris MasonPro Member

Moderator

Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes

6y

The market for furnished rentals is a lot larger if you think of it as a "furnished rental" rather than as a "short term rental."

When a nurse is in town on a 3 month contract gig, where are they staying (healthcare is a big employer in my area)? When an actor is in town for a play that's going to be in rehearsals for a month then run for 2 months, where are they staying? That wedding planner has a short list of suggestions for where the bride and groom should stay, are you on that list as an option (near me is wine country => lots of weddings happen there)? XYZ Medium Sized Company takes on 3 unpaid interns per year but covers their lodging, who do you know at XYZ Medium Sized Company? Almost any industry or region you can name has stuff like this. Hotels dominate these things b/c they are markets that typical AirBnB hosts don't even know exist, meanwhile the hotels are building corporate B2B relationships (& not giving a cut of their action to AirBnB to boot).

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Dominique Palmer
Rental Property Investor · New Orleans, LA · Member since 2018 · 87 posts · 45 votes
6y
@Nancy Bachety thanks
0 Reply
Carolyn Fuller
Cambridge, MA · Member since 2015 · 651 posts · 736 votes
6y
Cambridge, MA has regulations restricting STRs to owner-occupied or owner-adjacent in 4-family or smaller buildings. But, unlike Boston which has forced the platforms (e.g., Airbnb) to remove illegal listings as of last Sunday, Cambridge has to go after the illegal hosts one at a time. So Cambridge still has tons of illegal listings but they really do seem to be mostly gone from Boston. Rumor was that Boston had more than 3000 illegal listings before Dec 1.
At least now, Massachusetts state regulators are sending the city of Cambridge the names and addresses of all Cambridge hosts so that it will be easier to track down the hosts who have illegal listings.
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Nancy Bachety
Rental Property Investor · North Fork, NY · Member since 2016 · 1k+ posts · 631 votes
6y
@Jacob Kline we’ve always been registered and paid bed taxes too. Don’t you? I thought you were referring to the 7 day minimum. That didn’t pass yet, as far as we know.
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Anthony Rosa
Rental Property Investor · New York City · Member since 2019 · 703 posts · 538 votes
6y
From what i understand, STR is not allowed in NYC within MF housing. STR are still advertised as if its not illegal but the city is starting to crack down on it. The city urges homeowners to call a hotline and report if they suspect that a place is being used as a STR . Last month the city raided 27 STR (which is nothing in a city of over 8 million people) with most of the complaints coming from homeowners calling the hotline.

https://www1.nyc.gov/site/specialenforcement/stay-in-the-know/about-illegal-short-term-rentals.page
After clicking the link and reading the "Stay in the know" click on the "News" link for more STR cases and fines.
1 Reply
Jacob Kline
Rental Property Investor · St Augustine, FL · Member since 2019 · 74 posts · 47 votes
6y
@Nancy Bachety are you talking about the STR market in your area or St Augustine? Sorry, I'm just confused as your location says NY.
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Jacob Kline
Rental Property Investor · St Augustine, FL · Member since 2019 · 74 posts · 47 votes
6y
@Nancy Bachety nevermind my previous message. Did a quick search and looks like your property is actually in the my neighborhood, even funnier built by the same builder who built my house! Small world.
It’s not a 7 day minimum as far as I know, it’s one rental per 7 days. And that is in the zoning code for RS-1 already, there’s nothing to pass. They will just start enforcing it, along with the parking requirements and fees.
This is just what I have heard and seen discussed at the city commission meetings.
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Jacob Kline
Rental Property Investor · St Augustine, FL · Member since 2019 · 74 posts · 47 votes
6y
@Jacob Kline also, I dont have any STR in St Augustine for that very reason. I knew they would enforce the one rental per 7 days and one parking spot per room rented (at some point), which makes the investment no longer profitable.
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Nancy Bachety
Rental Property Investor · North Fork, NY · Member since 2016 · 1k+ posts · 631 votes
6y
@Jacob Kline It fits into our model perfectly and we are totally compliant. Good to hear we’ll have less competition:) We like weekend rentals, bigger bang and less wear and tear. And still profitable.
We’ll have to meet up next time we’re in town, in a few weeks.
1 Reply
Jacob Kline
Rental Property Investor · St Augustine, FL · Member since 2019 · 74 posts · 47 votes
6y
@Nancy Bachety great to hear! I’d love to get together next time you’re here. I’m sending you a request to connect now.
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David M Trapani
Rental Property Investor · Franklin, TN · Member since 2019 · 160 posts · 125 votes
6y
Personal philosophy - Research local STR ordinances. Find friendly STR venues, with high demand and growth. Make cosmetic improvements to the property to force appreciation. Pay down mortgage principal aggressively. Keep eyes and ears open. Be ready to 1031 your equity out or have an LTR or other alternate strategy if there's a move to severely restrict or ban them. Keep diversified with other forms of real estate as well. Keep low LTV's or free & clear if possible.

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Robin Searle
OP
Real Estate Agent · Colorado Springs, CO · Member since 2017 · 224 posts · 201 votes
6y
@David M Trapani exactly what we have done! Great advice!
1 Reply
Ken Latchers
Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes
6y
Town I bought my last two buildings in made the national map so we maintained a short-term friendly jurisdictions. I expect these changes to happen almost everywhere throughout the country except for some traditional tourist areas. But we are a tourist area here.

I think the bigger problem is there's going to be a over saturation of short-term rentals throughout the country that's going to depress rent and occupancy.

I am actually of the mind that strong regulation will squeeze out a lot of operators and actually help to support the market if you know where to be.

I think it favors being in that community and even better be in that building. So perhaps living in a multi-family might be a better place for having short-term rentals.

and as some have said, perhaps getting a commercial house or multi-family might also have some protection as it may already be resume for hospitality

posted by @David M Trapani:
Personal philosophy - Research local STR ordinances. Find friendly STR venues, with high demand and growth. Make cosmetic improvements to the property to force appreciation. Pay down mortgage principal aggressively. Keep eyes and ears open. Be ready to 1031 your equity out or have an LTR or other alternate strategy if there's a move to severely restrict or ban them. Keep diversified with other forms of real estate as well. Keep low LTV's or free & clear if possible.

0 Reply
Nerissa Marbury
Rental Property Investor · Richmond, VA · Member since 2017 · 71 posts · 10 votes
6y
In Richmond, VA you need a special use permit (requires city council and civic association approval) to be deemed as "legal" for STRs. Per newspaper articles more than 50% of the STRs in Richmond are "illegal" and all STRs in the city brought in over $3MM in revenue in 2018.

I've reached out to the person responsible for overseeing the special use permit process, but he has not been responsive and I've been trying to get more info since October. Makes me feel as if the city really isn't wanting any more applicants.

For those who aren't aware, Richmond has draft STR regulations on the books that have yet to be voted into law by city council. They want to limit STRs to only those with special use permits ($300/yr), property must be occupied by a VA resident (occupancy based on 185 days min), and can rent out as STR for no more than 180 days.
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Brenda Whittaker
Investor · Cottonwood, AZ · Member since 2015 · 287 posts · 57 votes
6y
In my area vacation rentals are destroying people's lives and we hate them more than anything. They are like a gigantic plague infecting the neighborhood. Since investors can rake in as much in a week as they normally could in a month with a long term rental there is a greed frenzy going on and the biggest problem is the local work staff has nothing to rent and are living in tents out in the cold. Some are in RV's or living in their cars. There are whole areas full of homeless workers, wait staff, janitors, grocery clerks, and the like who are suffering because of vacation rentals and I will do everything I can to ban those demons however the city counsel told me that evil Air bnb paid off our state governor to tie the hands of cities who want them banned, so again it's profit and corruption over the basic needs of the very people who clean up after you and serve you. Who cares if they're out in tents, as long as you make profits, right? Vacation rentals are a curse and should be banned everywhere.
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Brenda Whittaker
Investor · Cottonwood, AZ · Member since 2015 · 287 posts · 57 votes
6y
What you refuse to see is the workstaff and the elderly being kicked out of their rental homes because investors buy the home and triple the rent, I've seen an 83 year old woman simply thrown out onto the street, I've seen a single father thrown out onto the street, and another family I am acquainted with thrown out because their rent wasn't profitable enough, and these buyers are abusing landlord tenant laws because they know tenants most likely will not do anything about their abuse, such as kicking them out before the lease is up, turning off their utilities, etc. When I speak this truth everyone attacks me and bans me from chat lines, yet this problem is very real and very painful but all you people care about is your profits and it's disgusting how you turn the other way and ignore what you are doing to others who are less fortunate than you, those who are struggling to get under one roof while you have many. BAN VACATION RENTALS, the worst plague of modern times.
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Robin Searle
OP
Real Estate Agent · Colorado Springs, CO · Member since 2017 · 224 posts · 201 votes
6y
@Brenda Whittaker Wow! First I'm sorry you've had and seen such a horrible example of STR's. But I have to ask are you as anti-fix and flip? Over the years I've helped investors buy homes that they fix up and then turn around and sell them for a pretty good profit. In my opinion, it's a free market and good for them improving the neighborhood. But you could also certainly look at it that they stopped a first time homebuyer from purchasing that home at a low price and using an FHA203K to fix it up thereby knocking that first time homebuyer out of the market. I wouldn't say the fix and flipper was greedy anymore than I'd say an STR investor or a long term landlord was greedy for employing an investment strategy. Are there greedy investors? Certainly but there are greedy people in every walk of life.
As for my STR - we actually ADDED living units to Colorado Springs. We bought a single family home with a 3 car detached garage on the rear of the property the owner was using for storage. We rented the front unit long term and converted the area above the garage to a 2 bed/2bath beautiful furnished unit we are doing STR out of. Not ONE complaint about crime, trash, or noise after a full year. We are now finishing the studio on the lower level and will do STR out of that - each unit gets their own garage and the space behind so we are not adding any parking issues to the neighborhood. We are zoned R4 and have a commercial roofer right behind us and commercial buildings across the road.
So saying ban ALL STR's is a bit over the top. My family ALWAYS stays in STR's when we travel and we absolutely love them. Until now, Colorado Springs has had fair regulation and has zero data to do an all out ban. No permits have been revoked and very, very few complaints to code enforcement. The city council will be voting today and I believe they will vote to completely ban all future STR's in R1 zones but will grandfather in those who have permits already. So the anti-STR people get their wish and my property will benefit, but I still don't like the government overreach. As an investor (in anything) I prefer less government - but that's just me.
4 Reply
Myka Artis
Rental Property Investor · Arlington, TX · Member since 2016 · 706 posts · 611 votes
6y
I live in the Dallas-Fort Worth area and there seems to be a split on it. The city of Plano is the only city in the DFW that receives tax payments directly from Airbnb. Fort Worth has banned STR's while Arlington has put restrictions so tough that getting an STR up and running is dang near impossible. When I invest in a property that I see STR potential in I first verify if any of the booking platforms such as Airbnb or VRBO pay taxes to that city. I've noticed the city councils in these cities aren't looking to ban STR's. There's only 5 cities in the entire state of Texas that seem to be accepting STR's with open arms. The rest is all up to the city council. Texas state law approved STR's a few years back but have failed to enforce their law on the cities so at the moment the cities are just making up whatever laws they see fit. It will be interesting to see what will happen in the future.
1 Reply
Ken Latchers
Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes
6y
Ignore Brenda Whitaker. I believe it is her that pops up every now and then to push pins into voodoo dolls of anyone who considers short term rental. Just a troll.

Originally posted by @Robin Searle:
@Brenda Whittaker Wow! First I'm sorry you've had and seen such a horrible example of STR's. But I have to ask are you as anti-fix and flip? Over the years I've helped investors buy homes that they fix up and then turn around and sell them for a pretty good profit. In my opinion, it's a free market and good for them improving the neighborhood. But you could also certainly look at it that they stopped a first time homebuyer from purchasing that home at a low price and using an FHA203K to fix it up thereby knocking that first time homebuyer out of the market. I wouldn't say the fix and flipper was greedy anymore than I'd say an STR investor or a long term landlord was greedy for employing an investment strategy. Are there greedy investors? Certainly but there are greedy people in every walk of life.
As for my STR - we actually ADDED living units to Colorado Springs. We bought a single family home with a 3 car detached garage on the rear of the property the owner was using for storage. We rented the front unit long term and converted the area above the garage to a 2 bed/2bath beautiful furnished unit we are doing STR out of. Not ONE complaint about crime, trash, or noise after a full year. We are now finishing the studio on the lower level and will do STR out of that - each unit gets their own garage and the space behind so we are not adding any parking issues to the neighborhood. We are zoned R4 and have a commercial roofer right behind us and commercial buildings across the road.
So saying ban ALL STR's is a bit over the top. My family ALWAYS stays in STR's when we travel and we absolutely love them. Until now, Colorado Springs has had fair regulation and has zero data to do an all out ban. No permits have been revoked and very, very few complaints to code enforcement. The city council will be voting today and I believe they will vote to completely ban all future STR's in R1 zones but will grandfather in those who have permits already. So the anti-STR people get their wish and my property will benefit, but I still don't like the government overreach. As an investor (in anything) I prefer less government - but that's just me.

1 Reply
Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
6y
Originally posted by @Robin Searle:
@Brenda Whittaker Wow! First I'm sorry you've had and seen such a horrible example of STR's. But I have to ask are you as anti-fix and flip? Over the years I've helped investors buy homes that they fix up and then turn around and sell them for a pretty good profit. In my opinion, it's a free market and good for them improving the neighborhood. But you could also certainly look at it that they stopped a first time homebuyer from purchasing that home at a low price and using an FHA203K to fix it up thereby knocking that first time homebuyer out of the market. I wouldn't say the fix and flipper was greedy anymore than I'd say an STR investor or a long term landlord was greedy for employing an investment strategy. Are there greedy investors? Certainly but there are greedy people in every walk of life.
As for my STR - we actually ADDED living units to Colorado Springs. We bought a single family home with a 3 car detached garage on the rear of the property the owner was using for storage. We rented the front unit long term and converted the area above the garage to a 2 bed/2bath beautiful furnished unit we are doing STR out of. Not ONE complaint about crime, trash, or noise after a full year. We are now finishing the studio on the lower level and will do STR out of that - each unit gets their own garage and the space behind so we are not adding any parking issues to the neighborhood. We are zoned R4 and have a commercial roofer right behind us and commercial buildings across the road.
So saying ban ALL STR's is a bit over the top. My family ALWAYS stays in STR's when we travel and we absolutely love them. Until now, Colorado Springs has had fair regulation and has zero data to do an all out ban. No permits have been revoked and very, very few complaints to code enforcement. The city council will be voting today and I believe they will vote to completely ban all future STR's in R1 zones but will grandfather in those who have permits already. So the anti-STR people get their wish and my property will benefit, but I still don't like the government overreach. As an investor (in anything) I prefer less government - but that's just me.

>So the anti-STR people get their wish and my property will benefit, but I still don't like the government overreach.
I suspect the R1 zoning never permitted commercial use and that the purchaser of those properties that converted the units to STR were not compliant with the existing rules. I believe a purchaser in a residential area should not have to tolerate a neighbor that converts a residential use to commercial use against the regulations. When I purchase in an area I should be able to research what is permitted and have confidence that something that is not allowed will not be allowed.
I say this even though we have a duplex STR that is in a area that was never zoned for commercial. I will state at the time that we converted it to STR (over 20 years ago) STRs were as prevalent as today and therefore not nearly the same level of problem. The area of our STR has changed significantly in character. There are no residents anymore. I also realize the hypocrisy of stating and believing one thing and having done another. In all fairness to my hypocrisy, 20 years ago (pre Air BNB or VRBO) I did not realize that STRs would ever be so prevalent or what they could do to a market.
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Cody L.
Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
6y
Originally posted by @JD Martin:
Originally posted by @Cody L.:
Originally posted by @JD Martin:
Originally posted by @Bryan Clement:
My city permits them, they give out a certain number of permits and you have to apply to get it. Once you have it, all you have to do is renew it by a certain date and you do not need to reapply. The problem is that they limit it to 100 units in a city of around 15,000.00, and my area is almost entirely tourist based. Completely restricted the market. Neighboring towns now have the corner on AirBnB's and they were nicer areas to begin with. Stupid decisions.

By allowing it and permitting it at all, if someone decided to make an issue out of it it is likely they would have to provide some rationale for what sounds like a completely arbitrary number (why 100? why not 10 or 1000?). Most cities/towns are going to have a lot of difficulty with this issue if they don't approach it from a fact & rationale approach when it comes to licensing and permitting; they'd be on safer ground banning it altogether as commercial activity in residential zoning.

Why is the speed limit 65 and not 66, or 100, or 1? Almost every rule is arbitrary. We elect on people to come up with those arbitrary numbers since everyone would have their own version of what's ideal.

Not true. Rules *can* be arbitrary - there may be no reason at all why the speed limit is 65 or 66 - or they can have research, data and logic at their core. If you don't believe that, then you live in a world in which you believe all decisions are purely arbitrary. Using your speed limit example, design engineers can determine the maximum controllable speed of a car, truck, or tank, based on road surfaces, curves, and the like, and then other stakeholders can consider ancillary effects - road noise at a certain speed with a certain surface, the likelihood of vehicle interaction with animals, pedestrians, or weather events, etc. and use the aggregate to set a speed that is reasonable for most vehicles in most situations. This is how insurance companies determine risk and rates - the most money they can reasonably charge, within the confines of regulations, that will provide the most profit while maintaining the most customers (eg. prevent people from cancelling because it's too expensive), while covering expected losses, figures determined (hopefully) by research rather than arbitrarily guessing how much they may have in losses.

All that doesn't mean rules are always well constructed or even suitable for their intended purpose, but if we want to avoid anarchy well reasoned rules and regulations are the least unpalatable alternative.

My point was saying you can have a STR for 15 days, or 10 days, or 20 days is just as arbitrary. If the speed limit is 50mph, that's based on the factors you point out, but I think my model S performs different from my brothers sentra. So should I be able to drive faster? Also I run my STR more responsibly than the goof ball down the street, so should I get more days allowed?

Maybe to both. But that's unlikely. So an arbitrary rule is set in palce that may be more or less applicable to you but not much you can do other than vote for different people who might agree more with your POV
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Travis Boughton
Rental Property Investor · Bozeman, MT · Member since 2019 · 5 posts · 1 vote
6y
Restrictions on STRs have been instituted in Bozeman city limits. There is a zoning map ranging from Type I to Type III. Most people who want to airbnb, need to live on the premises in order to STR year round. If you would like to vacation rental your home you have to get a fire inspection, and file with the state and city for a permit to run your STR. The influx of STR in the Gallatin Valley is increasing rampantly. I'm sure we will have more restrictions in and around Bozeman in the near future.
0 Reply
Bill O'Donnell
Rental Property Investor · Newburgh, NY · Member since 2018 · 160 posts · 117 votes
6y
@Brian Spies
Short term rental
Think Airbnb and the like
0 Reply
Alex Cardenas
Austin, TX · Member since 2019 · 3 posts · 0 votes
6y
@Trey Farmer What do you know about ETJs here in Austin? I asked around in the a city of Austin’s short term rentals office and they told me that ETJs (extra-territorial jurisdictions) don’t follow short term rental ordinances and that I don’t even need a permit to operate. Coming from the office that regulates STRs sounds pretty legit, but I wanted to double check with someone local that is on the game.
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Trey Farmer
Specialist · Austin, TX · Member since 2019 · 10 posts · 16 votes
6y
@Alex Cardenas, we work in the ETJ regularly but I have no experience with STRs in it. Typically it means you are dealing with the HOA as your "permitting" body, since the only real permits you need are for you septic. My understanding around STRs in Austin is that they are only limited/regulated if they are type-2 ADUs, which means that you cant rent out an ADU as an AirBNB if you don't also live on the property. You can still rent the main house as an STR or a room in the main house, or a unit in a multiplex even if you don't live on the property. ADUs are specific things with their own regulation within the city. The ETJ typically has far less rules, and I am not sure about ADUs or STRs. That said, many HOAs prohibit subletting or short term rentals or multiple units.

Long story short, the limits within the city are very narrow so if you have any issues they will likely be due to the HOA. But keep digging for someone who knows for sure ;)

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Jennifer T.Pro Member
Investor · New Orleans, LA · Member since 2014 · 1k+ posts · 944 votes
6y
In New Orleans, any lease that is shorter than (I think ) 90 days has always been illegal in the French Quarter. Other than that, it was a real BOOM time here for a few years with STRs, in areas that were not the French Quarter...but next to it. I didn't participate, other than occasionally on properties I already owned. I didn't trust it to last. And it didn't.
They changed it earlier this year (maybe it was last year?) to owner-occupied properties only, with 4 units or less. There is also a different license for "mixed-use" buildings, but with a lot of rules for it. The new rules knocked out 80% of the STRs. For the banned ones who currently have/had a license, they could keep running the STR until their license ran out. But they couldn't renew it after that.
Generally speaking, the average citizen here didn't like the STRs. Especially the ones who lived in neighborhoods most greatly affected by them. And those were the voices the City Council was listening to. Like anything else. Some of the points made on both sides were good ones. Some were ridiculous exaggerations.
I need to get on my soapbox for a moment, because I am still salty. One of the ideas was BRILLIANT!!!! It was to allow a STR license for 5 years to anyone who fixed up a blighted property. It is considered a "crisis" if 5% or more of a city's properties are blighted. Here in NOLA, it's something like 16% of our housing is blighted. People blame that on Katrina. While that's part of it, it's also partially a lie. There was a substantial blighted housing problem before that storm.
Talk about a win-win to bring more housing into city...albeit on a 5-year delay...and help solve a major problem the city has historically had. However, that would have required the city leaders to have had wisdom and foresight. Two characteristics they sorely lack. Instead, they went with the most anti-STR choice that was being considered. So here we are.
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