Short-Term Rental Regulation Silver Linings

05.09.2024 - 15:18 / skift.com

The Australian state of Victoria this week moved to give its local governments the power to limit short-term rentals in their regions.

It comes as the state moves to implement a 7.5% tax on all short-term rental listings – set to take effect Jan. 1, 2025.

It’s just the latest example of the global pushback to platforms like Airbnb, Vrbo and Booking.com, as a wave of cities have in recent years implemented a range of regulations seeking to curb the growth of short-term rentals.

The Spanish city of Valencia just this month instituted strict new regulations on short-term rentals. That follows Barcelona’s announced crackdown earlier this year, which would eliminate all short-term rentals in the city by 2029. New York City last year imposed new regulations so strict, Airbnb has called it a “de facto ban.”

Prompted by concerns over affordable housing and overtourism, new efforts to regulate or curb major platforms appear to create new setbacks for the growing short-term rental industry. But some experts say the reality is more nuanced: regulation isn’t inherently a death knell for the industry, and in some cases can actually help short-term rental operators.

It all depends on the kinds of regulations, according to Pam Knudsen, a short-term rental industry expert and the senior director of compliance operations at Avalara MyLodgeTax.

“New York City’s regulations are so restrictive that it has basically shut down that market to a large extent,” Knudsen told Skift. “But a number of other ones have continued to see growth because they’re doing sensible and thoughtful regulations.”

Not all regulations need be as restrictive as New York’s, which limit the number of guests, require hosts to be on-site during stays and require hosts to register with the city before advertising, Knudsen said. Regulations that instead focus on things like noise control or conduct can help short-term rental hosts understand what’s expected of them within a given community.

“There’s a wide gamut of regulations that are in play and a lot of them really do work on helping those short-term rentals become good neighbors,” Knudsen said.

Some regulations are aimed at addressing challenges within a community. Some cities, for instance, might require short-term rental hosts to get licenses or pay fees that help a city fund affordable housing efforts or infrastructure improvements. Those efforts come as many worry the proliferation of short-term rentals might be contributing to rent increases by gobbling up local housing supply. Those measures may bring some real benefits to communities at large.

In Australia, for instance, Victoria’s 7.5% tax would fund the construction of social and affordable housing, according to local news reports. Indeed,