NEW YORK – The vacation rental industry has stepped up efforts to influence U.S. lawmakers to keep more cities from enacting restrictions on short-term rentals in response to concerns about housing availability and quality of life.
Growth in short-term rental supply has slowed in 17 of North America’s largest 30 cities in 2024, according to KeyData, a vacation rental analytics firm. In response, Booking Holdings (NASDAQ: BKNG), Expedia Group’s VRBO, and smaller operators are spending more on lobbying to head off local restrictions that limit supply.
Numerous cities around North America, including New York, Los Angeles, and Montreal, have curbed the growth of rental properties, responding to complaints from residents who say short-term rentals make housing less affordable and hurt the quality of neighborhood life.
“We’re really eager to work with those local lawmakers to understand what their priorities are, but there are some opportunities to strive for stability and consistency in state law,” said Richard de Sam Lazaro, senior director of government affairs at Expedia.
In the first half of 2024, vacation rental companies spent $1.4 million on lobbying, up 13% from the year-ago period as they stepped up efforts in states like Florida, Colorado, and Arizona. Detractors believe they will continue to spend more money.
“That’s the tip of the iceberg compared to how much staff they have and who they are employing to be so-called organizers,” said Murray Cox, a housing activist who founded Inside Airbnb, a data platform that tracks vacation rentals. “In many cities, short-term rentals have a negative impact on housing and they should be regulated.”
Cox helped draft legislation to restrict short-term rentals in New York City that took effect in September 2023. Since then, listings for less than 30 days have fallen by 54%, according to AirDNA, a short-term rental analytics firm.
Average hotel prices in New York rose 5.6% in the first half of 2024, compared with a 1.8% increase nationally, according to Costar, a commercial real estate analytics firm.
A month after regulations restricting rentals to primary residences were passed in 65 British Columbian communities, supply fell 9.4%, said Jamie Lane, chief economist at AirDNA, while daily hotel rates rose 9% in the province.
Vacation home purchases have already slowed due to higher interest rates and elevated home prices, said Melanie Brown, director of data insights at vacation rental analytics firm Key Data.
According to nonprofit transparency group Open Secrets, Expedia (NASDAQ: EXPE) spent $380,000 on lobbying in the first half of 2024, up 58% from the year prior. Expedia worked with Arizona legislators on regulation that prohibits localities from enacting outright bans. Booking Holdings (NASDAQ: BKNG) boosted lobbying expenditures by 61% in the same period to $570,000.
Local vacation associations and professional property managers are also pooling funds for lobbying. In Florida, the Florida Professional Vacation Rental Coalition persuaded Governor Ron DeSantis to veto a bill in June that would have authorized local officials to revoke or refuse to renew short-term rental licenses.
DeSantis called the bill “bureaucratic red tape.”
“You pay to have access,” said Steve Milo, coalition Steering Committee Chair and CEO of VTrips, a professional property management company. “It is not by chance that you have such a pro-vacation rental situation in the state of Florida.”
Milo said property managers across Southern states are trading notes on how to increase their lobbying.
Analysts so far don’t see regulations threatening the viability of Airbnb (NASDAQ: ABNB) and others. Airbnb said 80% of its top 200 markets by revenue are already regulated, and while it is seeing a fall in active listings, it attributed that to efforts to remove lower-quality properties.
“It would be different if we saw a whole country or even a whole major U.S. state change the rules,” said Richard Clarke, Bernstein equity analyst.
Airbnb’s 2024 lobbying spending is down 29% to $470,000, and it does not expect full-year expenditures to differ significantly from 2023’s $1.03 million, as the company focuses on global expansion.
Restrictions found in North America are present elsewhere. Barcelona plans to bar apartment rentals to tourists by 2028 to rein in soaring housing costs. A few weeks later, the Spanish government announced a crackdown on holiday rentals due to anger from locals.
(Source: ReutersReuters)
