North Carolina Alliance for Neighborhood Prosperity

Is home sharing a new phenomenon?

No. It’s older than the Great North State. The growth and prosperity of our cities has always depended on the people who were already here opening up their homes to newcomers while they built or did business.

In fact, for all of American history, one of the few ways that families could supplement their incomes, and lodging was very common in urban America between 1870 and 1920. Robert Coit Chapin studied working class urban families in the early 20^th century. His 1907 survey reported that about one-third of families took In lodgers, and from their fees, raised their family income between 10 and 15 percent.

Do short-term rentals negatively affect the character of a neighborhood?

We believe that the opposite is true. It’s important to recognize the value that short-term rental properties bring to the character of a neighborhood. Often, investments in dilapidated properties and their rehabilitation as short-term rentals, have an enormous positive impact on local residents, home values, and the community overall. Check out some before and after pictures.

And according to a 2015 article in the Cornell Real Estate Review, short-term rentals “can help to avoid or at least mitigate instances of blight due to disrepair, distressed sales at below-market-rate sales prices, and even foreclosures. Thus, allowing owners to home share can protect a community’s character and property values by helping to insulate individual owners from the effects of negative housing market downturns.”

Are short-term rentals a commercial activity?

No. Cities should recognize that short-term rentals of any kind are a non-commercial activity that should considered under the same or similar guidelines and laws as those governing long-term residential rental properties.

Courts in Florida, Texas, and California, as well as the California Coastal Commission, have both found and upheld appeals that define short-term rentals as a residential use, rather than a commercial one. While a hotel is a hotel today and will be the same hotel tomorrow, a short-term rental could be occupied by resident owners this week, short-term renters over a holiday weekend, and then go back to being a full-time residence again. Short-term rentals are without question, a residential use, and enjoy this flexibility under the law. Attempts to commercialize or redefine short-term rentals as hotels are tantamount to a ban or severely limiting action by states and municipalities because commercialization could ultimately wipe out this activity due to zoning restrictions. It might also make other owners susceptible to infrastructure changes such as fire and safety upgrades, ADA requirements, and health inspections. Because short-term rentals are a residential use, the implementation of commercial requirements effectively changes the nature of the structure and would act as a deterrent to those looking to offer their homes as a short-term rental accommodation for travelers.

Do short-term rental properties have an unfair advantage over hotels and traditional bed and breakfasts?

No. Short-term rental property owners collect and remit sales taxes and room occupancy taxes. In order for local governments to collect short-term rental tax revenue, they must create formalized regulations that legalize short-term rentals, and include making tax collection and remittance obligations clear and concise, as to avoid confusion among owners and operators.

New Hanover County tax administrator Roger Kelley told the Lumina News in August 2015 that his office very seldom finds short term rental owners who aren’t paying Room Occupancy Taxes.

It’s no secret that Big Lodging has paid lobbyists and even an astroturf web site that offers ready-made form letters that people can use to complain to elected officials and local media about the imagined horrors of short-term rentals in their neighborhoods. Big Lodging also enjoys seats at the table at the New Hanover County Tourism Development Authority, which also acts as the local Convention and Visitors Bureau. This board decides how Room Occupancy Taxes are spent, and it’s usually to their benefit. Any further regulation of short-term rentals should, in all fairness, be offered along with a seat on the TDA for an owner or manager of fewer than 100 short-term rentals.

Do short-term rentals affect affordable housing?

Despite claims to the contrary, affordable housing challenges in many parts of the country have long predated the growth in popularity of short-term rentals. Unfortunately, short-term rental opponents have seized upon affordable housing issues, particularly in urban areas, and offered it up as a “boogie man” to help explain the struggles of cities and communities slow to address a lack of affordable housing. In reality, cities with affordable housing challenges can’t solve or even significantly improve their housing situation by banning or limiting short-term rentals. The short-term rental inventory pool is just too small.

In fact, short-term rentals actually improve access to housing. People with fixed incomes may be empowered to retain home ownership with the added income from a short-term rental in a portion of their home. In addition, people living in transitional neighborhoods may benefit economically from the financial outlay of owners, hosts, and guests for goods and services procured within that neighborhood, including construction jobs, housekeeping, landscaping, and purchases at neighborhood stores.

As larger towns and cities experience population growth through an influx of residents looking to take advantage of all that municipalities have to offer, so too, are travelers more frequently visiting these communities looking for those unique experiences. Less than two years ago, the World Health Organization estimated that 70 percent of the global population would live in cities and towns by 2050, up from just 50 percent today. That means that cities everywhere are feeling the housing crunch, and that trend is likely to continue. But because short-term rentals are such a small fraction of the total residential housing inventory in a given market, they don’t offer a potential solution for municipalities struggling with this issue. There are real solutions to affordable housing challenges, and no lack of academic research that can help municipalities to addresses this issue. But blaming short-term rentals, and then imposing onerous restrictions or bans on the activity fails to address the problem. Ultimately, it simply translates to decreased income for those workers who rely on travel and tourism, either directly or indirectly, for a living.