By Doyinsola Oladipo
NEW YORK (Reuters) – The vacation rental industry has stepped up efforts to lobby U.S. lawmakers to prevent more cities from imposing restrictions on short-term rentals in response to concerns about housing availability and quality of life.
According to KeyData, a vacation rental analytics firm, growth in short-term rental supply has slowed in 17 of North America’s 30 largest cities in 2024. In response, Booking Holdings, Expedia Group’s VRBO and smaller operators are spending more money on lobbying to stave off local restrictions that limit supply.
Numerous cities in North America, including New York, Los Angeles and Montreal, have slowed the growth of rental housing in response to complaints from residents who say short-term rentals make housing less affordable and reduce the quality of life in their neighborhoods.
“We’re keen to work with local legislators to understand what their priorities are, but there are also opportunities to advocate for stability and consistency in state legislatures,” said Richard de Sam Lazaro, Expedia’s senior director of government affairs.
In the first half of 2024, vacation rental companies spent $1.4 million on lobbying, up 13% from the same period last year, as they ramp up their efforts in states like Florida, Colorado and Arizona. Critics believe they will continue to spend more money.
“That’s just the tip of the iceberg compared to how much staff they have and who they employ as so-called organizers,” says Murray Cox, a housing activist who founded Inside Airbnb, a data platform that tracks vacation rentals. “In many cities, short-term rentals are having a negative impact on the housing market and should be regulated.”
Cox helped draft a law restricting short-term rentals in New York City that is set to take effect in September 2023. Since then, listings for less than 30 days have fallen 54%, according to AirDNA, a short-term rental analytics firm.
Average hotel rates in New York rose 5.6% in the first half of 2024, compared to a 1.8% increase nationwide, according to Costar, a commercial real estate analytics firm.
A month after 65 British Columbia communities passed regulations restricting primary residence rentals, supply fell 9.4 percent, said Jamie Lane, chief economist at AirDNA, while daily rates at hotels in the province rose 9 percent.
Holiday home purchases have already slowed due to higher interest rates and rising property prices, said Melanie Brown, head of data analytics at holiday home analytics firm Key Data.
According to nonprofit transparency group Open Secrets, Expedia spent $380,000 on lobbying in the first half of 2024, up 58% from the previous year. Expedia worked with Arizona lawmakers on an ordinance that would prohibit municipalities from enacting outright bans. Booking Holdings increased its lobbying spending 61% to $570,000 during the same period.
Local vacation associations and professional property managers are also pooling their resources for lobbying. In Florida, the Florida Professional Vacation Rental Coalition convinced Governor Ron DeSantis in June to block a bill that would have allowed local officials to revoke or deny renewal of short-term rental licenses.
DeSantis called the bill “bureaucratic paperwork.”
“You’re paying for access,” said Steve Milo, chairman of the coalition’s steering committee and CEO of VTrips, a professional property management company. “It’s no accident that the state of Florida has such a pro-vacation rental situation.”
Milo said property managers in the Southern states are discussing how they can increase their advocacy efforts.
So far, analysts do not see any threat to the viability of Airbnb and others from regulations. Airbnb said that 80 percent of its 200 highest-revenue markets are already regulated. Although the company has observed a decline in active listings, it attributes this to efforts to remove low-quality offers from its range.
“It would be different if an entire country or even just a large US state were to change the rules,” says Richard Clarke, equity analyst at Bernstein.
Airbnb’s lobbying spending for 2024 fell 29% to $470,000, and full-year spending is not expected to be materially different from $1.03 million in 2023 as the company focuses on global expansion.
Similar restrictions to those in North America are in place elsewhere. Barcelona plans to ban the rental of apartments to tourists from 2028 in an effort to curb rising housing costs. A few weeks later, the Spanish government announced a tougher crackdown on vacation rentals due to anger from locals.
(Reporting by Doyinsola Oladipo in New York; Editing by Jonathan Oatis)
