How Should Cities Regulate Short-Term Rentals Like Airbnb?

Across North Texas, cities are struggling to figure out how to regulate short-term rentals like Airbnb, VRBO and HomeAway.
Across North Texas, cities are struggling to figure out how to regulate short-term rentals like Airbnb, VRBO and HomeAway. iStock/Wachiwit

The short-term rental industry has become the latest “internet-based service firm” to arouse the ire of citizens and local governments nationwide.

Here in North Texas, Arlington has recently joined the growing number of cities to restrict or even ban the practice of renting or operating short-term rentals as offered by websites like Airbnb, VRBO and HomeAway.

After more than two years of discussion by city council members, Arlington's restrictions are set to go into effect later this year. Supporters say the restrictions are necessary to protect neighborhoods in the city. One local rental home owner describes the new ordinance as “draconian.”

The restrictions passed on April 23 will limit short-term rental operators to renting property only in the area immediately around Arlington’s entertainment district, which includes Globe Life Park, AT&T Stadium and Six Flags Over Texas. The specific boundaries will be Lamar Boulevard to the north, State Highway 360 on the east, East Abrams Street to the south and Center Street to the west. These changes will affect the majority of Arlington’s short-term rental operators, whom the Arlington City Council sees as a possible threat to the city’s efforts to promote strong neighborhoods.

Robert Rivera, former Arlington council member, said a number of “very concerned citizens” spoke on the issue during a council meeting on Sept. 6, 2016. Their main concerns had to do with “investments in their neighborhood and potential future investments in other neighborhoods and the concern of what could be next door or across the street,” Rivera said.

During the same meeting, Rivera summed up the issue: “Whose private property rights are we going to be protecting?”

Judging from the new ordinance, it doesn’t seem like short-term rental operators were the ones being protected in Arlington. But different cities have handled the issue differently. Nearby Hurst passed a ban on short-term rentals with no local pushback at all. While just to the southeast, Grand Prairie is marked as one of the most lucrative cities in the U.S. for Airbnb, with a simple registration process being their only restriction.

Across the country, cities and towns are considering similar regulations, said Rob Stephens, founder and general manager of MyLodgeTax, a kind of TurboTax for short-term and vacation rental operators. In some extreme cases, communities have enacted outright bans. But cities that regulate more heavily run into issues with enforcement, Stephens said, since people who own houses and want to rent them out are likely to do that regardless.

“Travelers want to do this. It’s happening. There’s got to be a reasonable way to regulate it without banning, but again, that’s up to each community to decide what’s right for them.” — Rob Stephens, founder of MyLodgeTax

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“Travelers want to do this. It’s happening," he said. "There’s got to be a reasonable way to regulate it without banning, but again, that’s up to each community to decide what’s right for them.”

Stephens says short-term rental operators aren’t trying to set up party houses or softcore porn photo shoots in their properties. By and large, operators in suburban communities recognize they are part of that community, and their properties are usually subject to the same zoning ordinances governing noise and disruption.

Opponents of short-term rentals in Arlington have worried about the kinds of things guests might do in those rental homes. But Marty McGee, an Arlington-based Airbnb super host, said she's never seen any guests who would be a cause for concern. She questioned why, if the council thinks the rental properties are dangerous, they would allow them to continue to operate in the area around the entertainment district.

“The council’s oft-stated goal in banning the bulk of the (rental properties) is to protect neighborhoods," McGee said. "It’s unclear how they justify allowing all these bad people to stay in any neighborhoods if they truly believe the hype.”

McGee also says she is a board member of Short Term Accommodations for Residents & Tourism, a nonprofit made up of short-term rental operators and supporters in Arlington who are planning to present a legal challenge to the city's ordinance. The group’s president and treasurer, Jeremy Fenceroy, says that from October 2016 to 2018, only 16 properties, or about 4% of the city's short-term rental properties, received more than 10 calls for city services such as the police.

Most of those calls were for low-level issues like cars parked facing the wrong way, noise complaints and trash being put out at 5 p.m. instead of 7 p.m. But Fenceroy and McGee both say some calls were made by rental operators themselves in order to remove disruptive guests, as well as by disapproving neighbors.

“I have repeatedly heard anti-short term rental advocates claim (short-term rental properties) bring down property values, but this is not even anecdotal,” Fenceroy said. “It is pure speculation, and very likely wrong speculation. Many factors contribute to housing values, and the actual impact of short-term rentals on housing values depends on a number of factors that vary widely location to location.”

There are kinks to work out when adopting any new technology. Like LimeBikes, Ubers and Lyft Scooters, services like Airbnb have disrupted long-standing business norms by allowing anyone to rent out spare bedrooms, as well as giving larger firms the chance to buy out properties for the purpose of renting them for days and weeks at a time. In some cities, like Santa Monica, California, courts found regulations necessary.

Stephens, the founder of MyLodgeTax, said companies like Airbnb and VRBO want clear rules regarding short-term rentals so they can operate in cities like Arlington without legal drama.

"I can tell you they want a legal industry, they want people to be registered, they want people to be paying their taxes. But it’s just a blind spot," he said. “These zoning laws and tax laws were all written, you know, decades and decades ago, before the internet, before anyone thought about these applications and these services like Airbnb and VRBO.”
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Nicholas Bostick is a national award-winning writer and former student journalist. He's written for the Dallas Observer since 2014, when he started as an intern, and has been published on Pegasus News, dallasnews.com and Relieved, among other publications. Nick enjoys writing about everything from concerts to cobblers and learns a little more with every article.
Contact: Nicholas Bostick