The Effect of Short-Term Rentals on Communities

Short-term rentals like AirBNB have been notoriously controversial for communities. Like any disruptive technology, they’ve been regarded with some suspicion. But are short-term rentals really impacting communities and the economy? The results are actually pretty mixed, and many of the fears of this new industry might be overblown.

Let’s take a look to see if there’s any rhyme or reason for communal animosity towards AirBnBs, and the long-term affects they have on the rental market.

Why Communities Hate AirBNBs

First: communities continue to regulate short-term rentals like AirBNB and VRBO. Cities have tried to ban it. Housing developments and apartments have vetoed it in their by-laws. But why?

There are a few issues involved. It’s believed that short-term rentals reduce property values, because people are constantly coming and going, and the properties aren’t being well-maintained. Communities dislike short-term rentals because it adds to personal disruption: there are always new people going in and out, and security issues can arise.

No one wants to live next to a hotel room. In apartment buildings, owners may find that their new neighbors are an ever-rotating cast of loud college students. And since they don’t want that, they go to their AOAO and they have these types of rentals banned.

The Truth About Short-Term Rentals

Short-term rentals actually don’t have a significant impact on community value. It does lower value a little, but the difference is negligible. That’s not to say that it doesn’t inconvenience homeowners, but it also doesn’t cause a lot of issues for them financially.

There are some reasons for this. People who have short-term rentals are actually in a very competitive market. That means they’re actually more likely to improve the appearance of their home, and they absolutely need to maintain the home because it’s now their income. Unlike a slumlord landlord, they have star ratings that they need to contend with.

So, though there may be additional disruption because of people coming in and out of the rental, it comes out in a wash because these rentals are so well-maintained. But, of course, finances are only one part of the picture, and that doesn’t mean that short-term rentals are always good for communities, or even neutral for communities.

Turning Residential Areas Into Commercial Areas

There’s a reason for zoning laws. Commercial areas tend to have different needs from residential areas. There are consequences when short-term rentals come into a community: it means that residential areas become commercial in nature. This is a large reason why there are increasing regulations.

Short-term rentals in a residential area means additional traffic and congestion, which impacts everyone, and which isn’t planned for because this type of civil engineering is done with zoning in mind.

And it also causes some general problems. Individuals may find them having to go through evictions processes more frequently. There may be a rise in casual crime like vandalism because people aren’t going to be in an area long-term.

AirBNB’s Response to Increasing Regulations

In some ways, it doesn’t matter so much whether communities are impacted by AirBNB and VRBO. What does matter is that people feel as though they are, and because of that, they act to create new regulations. These new regulations are making it more difficult for AirBNB to expand into areas, and consequently these emerging regulations have to be considered.

As a result of this, AirBNB has been considering different profit methods, such as actually purchasing buildings and renting them out, much like, well, an existing hotel. As AirBNB faces increasing regulations, it will have to lobby for additional support, and it will need to pivot into different areas in the areas that it’s already blocked out of. This can be unpredictable for those who are currently making AirBNB one of their primary methods of profit; there are people who are using AirBNB now as a primary source of income.

Short-term rentals are a great way to make money. But they aren’t without consequences for their surrounding communities. Recent evidence suggestions that those consequences might not be as bad as once thought, but they should be carefully considered.


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