by Ben Carnes | R Street
New legislation introduced in the Florida Legislature would establish a framework that does away with the hodgepodge of regulations governing vacation rentals across the state.
The most publicized aspect of the bills is the impact they promise to have on short-term-rental companies like Airbnb and HomeAway, which have faced inconsistency and, at times, outright hostility in their attempts to operate in Sunshine State. Consider the data compiled in R Street’s Roomscore report, which graded the top 59 American cities on how friendly their laws are toward short-term rentals. While Orlando and Fort Lauderdale received mostly passable grades (B and B-, respectively), Miami received a D+ and Jacksonville received an F.
Increasingly, the policy battle over short-term rentals has mirrored that faced by ridesharing companies like Uber and Lyft, whose rapid rise in popularity saw an unprepared cab industry seek to stifle their new competitors through a glut of regulatory attacks, often dishonestly couched in a supposed concern for public safety. The concerns voiced by representatives of the hotel industry often ring similarly hollow.
In a Miami Herald piece outlining the protracted fight by the hospitality industry to increase regulatory burdens on short-term-rental companies, Wendy Kallergis, CEO of the Greater Miami & the Beaches Hotel Association, said:
We want to make sure the guests are entitled to the same safeguards as our hotel guests and that the properties are registered as a business, fully insured, regulated to basic health, safety and cleanliness guidelines, ADA guidelines, and that they are appropriately zoned and that all their taxes and fees are paid in full.
Though it would, perhaps, be impractical to suggest that the hotel industry simply come out and say, “we do not particularly like the fact that a more modern competitor has become very popular and is potentially eating into our profits,” it nonetheless stretches the bounds of credibility to believe that the hotel industry’s motives are quite so pure, that they simply want anyone who might ever decide to spend the night away from home, whether in a hotel or otherwise, to do so with a guaranteed baseline of luxury!
Other complaints from the hotel industry have focused on a purported affordable housing crisis, as Airbnb continues to expand; suggestions that allowing spacesharing in private residences will lead to neighborhoods overrun with deviant behavior and noise complaints; and charges that Airbnb is simply being used as a loophole by commercial rental companies, rather than individuals.
However, data released by Airbnb regarding its experience in San Francisco—an ideal market for testing claims about housing scarcity—found that 0.09 percent of rentals in the city were booked frequently enough to compete with a long-term rental, while from 2005 to 2013, “the number of vacant units in San Francisco has remained essentially unchanged.” Concerns about an Airbnb-created housing crisis appear to be unsubstantiated.
And municipal solutions to rowdy behavior and noise complaints already exist and are best dealt with broadly, through the same avenues one would use to deal with a noisy neighbor in a long-term rental, or a noisy group at a hotel.
Finally, the claims about Airbnb being a covert outlet for commercial undertakings are not borne out by publicly available Airbnb data. According to data from the aforementioned Miami Herald piece, only 1 percent of Airbnb listings in Miami were booked for more than 300 days out of the year. Meanwhile, the average host made $6,400 per year, averaging 42 booked nights in 2015. Hardly the numbers one would expect of slumlord tycoons.
However obvious the hotel industry’s true root motivation may be, even their concerns about potential lost profits may be overblown. R Street’s Andrew Moylan, author of Roomscore, notes in the study:
The American Hotel and Lodging Association reported that revenue grew from $163 billion in 2014 to $176 billion in 2015. A Morgan Stanley equity analyst report projected increases in hotel-occupancy rates from an already strong 65 percent in 2014 to more than 69 percent in 2017. The number of hotels and number of rooms both expanded, as well.
He concludes, “for all the signs pointing to short-term rentals taking a growing share of the lodging pie, there’s substantial evidence that they simultaneously are serving to expand the size of that pie.”
AirDNA, an online tool that tracks Airbnb data, currently lists nearly 66,000 active listings in Florida. Last year, data from the state indicated that more than 750,000 guests had used the service to stay in Florida, a growth of 149 percent over the previous year.
The Legislature has before it an opportunity to score a victory for the state – a victory for consumer choice, for the private property rights of Floridians sharing their homes to supplement their own income and for the industries benefited by the tourism surge affordable rental options help enable.