August 3, 2023

Long-Term Concerns with Short-Term Rentals

Preemption of Local Short-Term Rental Regulations Collides With Affordable Housing Crisis

A record number of tourists visited Florida in 2022: 137 million. Many of these vacationers chose to forgo traditional hotel stays for the privacy and convenience of short-term rentals through companies like Airbnb. Yet, Airbnb and similar companies have not been without controversy — with issues ranging from raising market rental rates, discrimination, various safety concerns, to an overall lack of regulation. In Florida, the growth in short-term rentals through companies like Airbnb has exacerbated the state’s affordable housing and homelessness crisis through ripple effects on the housing market in their surrounding areas. Affordable housing development, vacation and short-term rentals, and homelessness - these intertwined issues are all part of the bigger picture when it comes to housing and affordability; and they warrant consideration in developing comprehensive policy solutions to address these challenges. 

Short-term rentals are often rented out on a daily, weekly, or monthly basis, while long-term rentals are often used for a period of months, though usually a full year. To combat issues with short-term rentals, there has been bipartisan action and support for greater regulation of the industry at the local, state, and federal levels. Federal legislation attempts to create a right to enforce claims against internet providers of short-term rentals carved out from the current protections guaranteed under the Telecommunications Act, while state and local actions are typically centered around taxation, licensing and permitting, capping available stock, capping rental periods, and curbing anticompetitive behavior and effects

In Florida, the Legislature has greatly restricted the ways in which cities and counties can regulate short-term rentals. The Legislature banned cities and counties from adopting new vacation rental rules in 2011. This legislation barred local governments from banning short-term rentals, or even regulating duration periods and frequency. Localities lucky enough to have had short-term rental regulations on the books before 2011 were exempted from the ban on such regulations, meaning that they can use zoning to choose where short-term rentals are allowed. Facing a public backlash, lawmakers revised the preemption statute in 2014 and allowed communities to regulate rentals, so long as they did not ban them outright or limit their frequency or duration. Those restrictions have led to careful consideration by local officials across the state when crafting new vacation rental rules. Meaning, all local governments in Florida still have some tools at their disposal; including code enforcement, licensing, and occupancy restrictions. Miami Dade County, for example passed some limited regulations of short-term rentals in 2017.

A 2017 study sheds light on the influence that short-term rentals have on local rents. It found that housing prices and rental rates are increased by short-term rental stock. In the same study, for example, the authors found that 23 percent of the annual rent increase in the Miami-Fort Lauderdale-West Palm Beach area could be directly attributed to local Airbnb growth. Many of Miami-Dade’s residents of modest means have been forced out of the county recently, due to a rapid rise in housing prices and rental rates brought on by wealthy residents and investors flooding the area. 

Impact of Short-Term Rentals in Sarasota-Bradenton Area

As there is a lack of government-released data, one must turn to private companies, like AirDNA, to obtain current data on short-term rental trends. AirDNA is an online tool that measures short-term rental data localized to cities and towns. Utilizing this data, FPI analyzed one metro-area (DeSoto, Manatee, and Sarasota counties) to better understand the makeup of short-term rentals in Florida. Out of 13 cities in the region, Sarasota has the highest number of short-term rentals with 6,654 units, an increase of over 1,000 units since 2021. To put this in perspective, in 2022 there were only 23,965 total households living in Sarasota – that amounts to almost one short-term rental for every three households.  

Since 2019, the average cost of rent in Sarasota and Manatee counties has swelled 30.6 percent and 33.7 percent, respectively. Perhaps unsurprisingly, the number of homeless families with minor children is up nearly 200 percent in Sarasota and Manatee Counties over the last year – ten times the rate of the state’s increase. This should be a serious wakeup call that the lack of affordable housing in the area is having dire effects. Meanwhile, depending on the city, between 19 percent and 58 percent of the short-term rental units sat vacant for effectively half of last year in the Sarasota-Bradenton region (See Table 1).  In light of the rising number of homeless families in the region, out-of-reach rents, and high move-in fees, a key question begs an answer. How many families are turning to these short-term rentals because they cannot afford housing in the long-term market?

Since 2019, the average cost of rent in Sarasota and Manatee counties has swelled 30.6 percent and 33.7 percent, respectively.

Unsurprisingly, the hotel industry has been the main financial backer of the fight against short-term rental growth, most notably through the lobbying efforts of the American Hotel and Lodging Association. On the other hand, Airbnb has managed to make alliances with organizations like the NAACP, who note that the economic impact of Airbnbs improves the social and economic mobility of individuals and families. However, current short-term rental ownership is still predominantly white and has had gentrification-like effects on Black, Indigenous, and people of color (BIPOC) communities.

While the growth of short-term rentals is only one aspect of the housing affordability crisis in Florida, state lawmakers need to reevaluate whether the preemption of local regulation has contributed to skyrocketing rents and build data-informed, sustainable, and transparent policy solutions.

Downloadable Resources

There are no attachments currently.
No items found.