Short-term rental is still quite a new market. After all, Airbnb, its biggest player, has only been around for 12 years. It’s also one that was experiencing rapid growth pre-pandemic, and is now recovering faster than the hotel sector.
As the industry matures, it’s naturally becoming more visible, making both the benefits it brings and the problems it carries more apparent to the general public. And with visibility comes accountability. Many hosts and property managers embrace it intrinsically, knowing that disrespecting their neighborhood would ultimately destroy their own businesses.
Some now infamous STR bans (Singapore, Santa Monica in the USA) prove that their fears are not wrong. So how do different cities around the world approach STR regulations, and what can you do to avoid the most stringent measures from being implemented in your area?
Outright STR bans are perhaps the most notorious example of STR regulations, being the most extreme. The possibility of their wider implementation is what keeps many property managers and hosts up at night, knowing that such measures would spell out the end of their business.
There are a few different ways to ban STRs. In Singapore, the law states that all stays in a private property of less than three consecutive months are illegal.
Amsterdam and New Orleans ban short term rentals in certain areas, like the French Quarter in the case of the American city. Other places, like Arlington in Texas, take the opposite approach and delineate ‘‘approved short-term rental zones,” effectively outlawing all STRs that fall outside of them.
Some councils prefer to discriminate based on the type of the property and not its geographical location. The Spanish island Mallorca for example bans STRs in apartment buildings only. Charleston, SC and Santa Monica, CA on the other hand deem all whole house rentals for under 30 days illegal. And while individual rooms can still be rented on a short-term basis, hosts have to be present in the residence throughout the guest’s stay. Toronto and New York City take a very similar approach, only allowing hosts to list one home (their primary residence) at a time. In New York, listing (and advertising) an entire apartment rental for less than 30 days is illegal, and can be fined up to $7,500.
Some cities with very strict regulations - but not outright bans - are those which see short term rental as a way for residents to supplement their income, rather than earn a living. These municipalities often limit the number of days per year that the property can be rented out.
Hosts in London need to follow the 90-Day Rule, allowing them to rent their property short-term for up to 90 days per year unless they have express permission for extra time. Airbnb automatically blocks the calendars of all London listings once they reach their 90-day maximum for the year.
San Francisco also caps short term rentals at 90 days, but the limit only applies when the host is not present at the property throughout the guest’s stay. Barcelona is more strict with a 31 day maximum, and the requirement for the host to be on call 24/7.
In Los Angeles, hosts can only rent out their primary residence, and only for up to 120 days a year. Paris, similarly, has a 120-night cap, which applies to rentals of entire primary residences, but not individual rooms within them.
When discussing regulations, it’s easy to forget that they aren’t always bad for the hosts. When used well, they can help make the industry more secure by outlining the legal responsibilities for everyone involved. That of course requires a mutual trust and understanding between all parties: the city, homeowner associations, property managers and hosts.
The city of Nashville in Tennessee is a good example of such cooperative approach. Instead of banning STRs, they set up a 24h hotline to ensure that they can “hold hosts and guests accountable for their actions.” Aiming to prevent illegal parties and to minimize disturbance for neighbors - two of the biggest issues the industry is currently facing - they also set up noise level restrictions that every host needs to enforce in their rental. Chicago banned one-night stays in STRs to tackle the same problem.
Lastly, one of the most simple ways to regulate STRs is setting up a permit system. Almost all cities require hosts to be registered with the local authorities in addition to any other restrictions they might have. The charges for permit application vary greatly - from Paris, where it’s free, to Los Angeles, where the cost is $89, to Las Vegas, where fees can climb up to $1,000 for homes with five (or more) bedrooms.
Another player that cannot be neglected in discussions around STR restrictions is Airbnb. In the past, the booking platform tried to stay away from imposing too many regulations on their hosts. Recently, however, they’ve been facing more scrutiny due to high-profile illegal party cases and their approach has been changing as a result. In August 2020 they banned parties worldwide and introduced an occupancy cap at 16 guests. They’ve also blocked guests in the US and Canada from making 1-night reservations over the Halloween weekend, which falls on Friday 30 October to Sunday 1 November this year.
If you’re unsure about the STR restrictions in your area, reviewing Airbnb’s Responsible Hosting pages may be a good start. For more in-depth information, consult official city pages or contact your local authorities.
Whether the area you rent in has very stringent rules, or a more lax approach, always remember to follow the regulations and host responsibly. The smaller your impact as a host on your neighborhood, the more likely it is that you won’t have to worry about new restrictions bringing an end to your business.
Here are a few tips on how to be a good neighbor:
Please note: This article should be treated as a broad overview only. We’ve done our best to ensure that the information above is accurate and up to date at the time of publishing. Always consult your local regulatory authorities for more detailed information on current regulations in your area.
