The vacation rental industry has stepped up its 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 said short-term rentals were making housing less affordable and affecting the quality of life in their neighborhoods.
“We are keen to work with local legislators to understand their priorities, but there are also opportunities to advocate for stability and consistency in state legislation,” 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 percent from the same period last year, as they step up their efforts in states like Florida, Colorado and Arizona. Critics believe they will continue to spend more money.
“This is 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 percent, according to AirDNA, a short-term rental analytics firm.
According to Costar, a commercial real estate analytics firm, average hotel rates in New York rose 5.6 percent in the first half of 2024, compared to a 1.8 percent increase statewide.
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.
Vacation home purchases have already slowed due to higher interest rates and rising home prices, said Melanie Brown, head of data analytics at vacation home analytics firm Key Data.
According to the nonprofit transparency group Open Secrets, Expedia spent $380,000 on lobbying in the first half of 2024, up 58 percent 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 by 61 percent 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 coincidence that the state of Florida has such a pro-vacation rental environment.”
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, the company attributes this to efforts to remove lower-quality offers from its range.
“It would be different if an entire country or even a large U.S. state were to change the rules,” said Richard Clarke, equity analyst at Bernstein.
Airbnb’s lobbying spending for 2024 fell 29 percent to $470,000, and full-year spending is not expected to be significantly different from 2023’s $1.03 million 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.
