A weekend topic starting with the Capital Gazette in Maryland. "The Annapolis City Council is once again plunging into the morass of short-term rental legislation … and is once again stubbornly refusing to recognize the difference between owner-occupied and non-owner-occupied short-term rentals. Owner-occupied hosts offer a spare guest bedroom to a tourist. They share their coffee with their guests, breathe the same air, drink the same water and fall asleep under the same roof while listening to exactly the same noise. Put all of these factors together and the impact of an owner-occupied STR is completely different from the impact of an absentee-investor, non-owner-occupied STR on a neighborhood. These should be regulated differently. Nationwide, they are regulated differently."

"From Baton Rouge, Louisiana, to Boston, from New York to New Orleans, from sea to shining sea, they are regulated differently. Baltimore knew this. Four years ago, when Annapolis passed its original STR legislation, it pretended not to understand. Baltimore passed its own STR legislation in 2018. Its solution was elegantly simple. It grandfathered in all existing non-owner-occupied STRs (showing respect for tens of thousands of dollars spent in property renovations), banned future non-owner-occupied STRs (residences should be for residents) and created a simple and friendly online-only registration portal for homestead-tax-credit holding, primary resident, owner-occupied hosts. No subsequent legislation was needed and no lawsuits were filed."

"In Baltimore, from 2018 to now, the result of being friendly to the owner-occupied community was a rise in the spare-guest rooms on the hosting platforms and a gradual winnowing down of the grandfathered-in non-owner-occupied STRs. First came the posts on Facebook … 'Why is the pricing algorithm dropping my rates? I can’t offer my STR for enough money cover my cleaning fees!' And then came a different kind of post … 'I’m selling my STR … Come get my couch, come get my table!'"

"Not so in Annapolis. The city’s legislation is almost the direct opposite of Baltimore. It allows everyone to own one STR. Everyone. EVERYONE. Not only that, but it requires 'barriers to entry' for owner-occupied STRs: home inspections of private homes (not required in Baltimore) and a Maryland State Sales and Use Tax ID (not required in Anne Arundel County). By driving the spare guest rooms off the platforms with over-regulation, and extending a welcoming hand to investors at the same time, the city might as well be shooting up a flare and shouting: 'Hey! Come buy up housing units here and use them as non-owner-occupied STRs!' And that is exactly what happened."

From KPCW. "Utah policymakers originally hoped 'accessory dwelling units,' which are add-on apartments or guest houses at single-family homes, would ease the statewide housing shortage. In rural counties like much of Summit County, ADUs have served as living quarters for ranch hands who work on the same property. But other parts of the county are tourist meccas, where short-term or nightly rentals like Airbnbs and Vrbos are extremely lucrative. And if ADUs become nightly rentals, the housing crisis gets worse. It’s possible other ADUs will become long-term units, but the landlord KPCW spoke with said they’ll more likely operate by word of mouth. 'It breaks my heart. They come down on the little guy every time and just stomp them into the ground,' said the landlord who wanted to remain anonymous."

"The Kem C. Gardner Policy Institute at the University of Utah estimated in 2022 that around a quarter of Summit County residences are short-term rentals. In Park City, 50% of units are STRs. Park City has more online STR listings than any other Utah city, with 3,922. The Snyderville Basin comes in second with 1,764."

The Missouri Business Alert. "The City of St. Louis has its first restrictions on short-term rentals. Mayor Tishaura Jones on Monday signed two pieces of legislation making up the regulations. They were the product of nearly six months of work, with years of negotiations behind the scenes. 'I want to be clear – short-term rentals are valuable for tourism,' Jones said at a news conference and ceremonial bill-signing. 'I can’t say I blame anyone for getting a glimpse into our beautiful historic neighborhoods. However, we also know that without regulations, short-term rentals can and have posed a threat to the safety of our neighbors and tenants alike.'"

"Before Monday, St. Louis had no restrictions on properties listed on platforms like Airbnb. Discussions about regulations started in 2018, and the effects of that lack of limits were laid bare in June, when one teen died and 11 more were injured in a shooting at a downtown party. That party wasn’t necessarily the straw that broke the camel’s back, said 4th Ward Alderman Bret Narayan, who maneuvered the proposals through the board, but it brought his colleagues’ attention to the problem in a tragic way."

"'Any time there’s a situation like that, I think it’s our duty as a legislative body to see if there are legislative fixes. We looked back at the data that we had from the building division and the police department on more problematic units, and we saw overwhelmingly, they were marketed as one-night stays,' Narayan said."

Bloomberg on California. "It’s a tough time to sell a mansion in Los Angeles. The market for the priciest properties in the city faces challenges such as a new tax on luxury sales and turmoil in the entertainment industry. Now, some homeowners are turning to another path to generate cash: Renting them out. This week, Rob DeSantis listed his seven-bedroom, 12-bath Manhattan Beach waterfront house for rent at $150,000 a month for leases of 90 days or less. The nearly 13,000-square-foot (1,200-square-meter) property is one of five he owns in California, said DeSantis, a serial entrepreneur who cofounded Ariba and was an early investor in LinkedIn Corp."

"Los Angeles hasn’t been left out of the slowdown that’s gripping the US housing market as soaring borrowing costs sideline potential buyers. Home sales in the area are down 26.6% this year through September compared with the same period a year ago, according to data from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. Luxury home listings — with a median price of $13.25 million — languished on the market for 73 days, or twice as long as the average single-family house."

"But the country’s second-largest city is facing added issues of labor strikes. While the studios and actors tentatively agreed to a new contract this week, the strife in Hollywood has upended production for months. Plus, Los Angeles has a new transfer tax on properties selling for at least $5 million. The so-called 'mansion tax' survived a lawsuit recently and now makes selling less profitable. It’s spurring some owners to find other ways to monetize their rarely used palatial properties."

"'A lot of owners took on homes and mortgages and extra vacation homes when lending criteria was easier,' Patrick Michael, founder and chief executive officer of LA Estate Rentals, said in an interview. 'I feel like everybody’s in panic mode now. Even wealthy owners are asking if I have anybody for their house.'"

"Michael said he currently represents about 250 short- and long-term rentals and added 10 properties in the last week of October. He estimates about $3 billion of luxury homes are available on the rental market in the LA area, a volume he compared to 2008 when he started managing rentals after the last housing bubble burst."

"Finding renters who can afford to pay those prices isn’t easy. Zach Goldsmith, a broker with the Agency, said he’s struggled to lease properties in Beverly Hills and the Bel-Air district because there’s so much inventory on the market. The Hollywood strikes also snuffed out productions that rent high-end homes as locations. Plus, fewer out-of-town actors, directors and producers were demanding five-star, hotel-like living quarters for a few months stay during a shoot. 'Because of the strikes, that well dried up,' Goldsmith said."

"Asking rents are falling as inventory swells and may drop as much as 35% in the next six to 12 months, according to LA Estate Rentals’ Michael. A five-bedroom, eight-bath modern Bel-Air home with a pool is on the market for $55,000 a month, after commanding a $180,000 price when it was rented to “a celeb client” this summer, he said. A six-bed, six-bath home in Beverly Hills is listed for $38,000 a month, down from $55,000 about six years ago. Most of Michael's properties also offer reduced prices for leases longer than four or five months. 'We have to be creative to lure in tenants in this market,' Michael said."

From Bisnow. "Short-term rental management company Zeus Living is reportedly handing back its key fobs. The San Francisco-based operator, which manages and rents properties out for as short as a month, wrote in an email to its landlords this week that it is 'winding down operations,' The Information first reported. The startup, which launched in 2015, wrote in the email that it was 'struggling financially' and would no longer be able to make payments on homes, according to the publication. Zeus is simultaneously laying off all 120 employees, JustLayoffs reported."

"The company raised over $150M from investors over its lifetime, including funding from Airbnb as part of its Series B round in 2019. It operates in over 125 cities, according to its website, and it reportedly operated more than 5,000 units at its peak. The company leases apartments from landlords and then sublets to individuals and corporate partners. It estimates average stays are between two and four months."

Business Insider. "On September 5, the hammer fell on Airbnb in New York City. After a series of desperate attempts by the home-sharing giant to stop the city from enforcing sweeping limitations on short-term rentals, the city passed a law that did just that. In a matter of weeks, thousands of Airbnb listings in the city — once one of the platform's largest markets — went up in smoke. Of the 3,000 or so Airbnb listings that remain in New York, down from some 22,000 in August, the vast majority are for stays of 30 days or more — the minimum number of nights required under the city's regulations."

"Airbnb has long denied culpability in the country's housing crisis, but the latest evidence that New York City made the right move comes from the opposite side of the country. Irvine, California, a picturesque city of 300,000 in Orange County, banned short-term rentals back in 2018 as residents grew frustrated by increasing numbers of vacation rentals in once-quiet neighborhoods. Based on a new study published this summer in Real Estate Economics, the move had a notable impact. After Irvine's ban went into effect, long-term rents in the city dropped by 3%, according to the study, a decrease of $114 a month on average."

"Irvine's 2018 short-term rental regulations — which barred rentals of 30 days or less in all residential areas — were hardly unprecedented. Plenty of cities had passed ordinances banning short-term rentals, only to see Airbnb listings continue to pop up. But as Michael Seiler, a professor of finance at the College of William & Mary and one of the researchers who worked on the new study, explained to me, Irvine was able to succeed in actually getting rid of Airbnbs for one reason: enforcement. 'What is so different about Irvine is that they did not just put a ban in place,' Seiler said. 'They actually enforced it.'"

"It has long been the law in the state of New York, for instance, that residential apartments cannot be rented out for less than 30 days, except under very limited circumstances. For a decade, Airbnb hosts simply refused to heed this law. Why? It was extremely difficult to enforce. The thousands of Airbnb listings that evaporated overnight in September had always been illegal but managed to survive because they were 'legitimized by this multibillion-dollar internet platform,' said Murray Cox, the founder of Inside Airbnb, a project that examines Airbnb's impact on cities. New York City had just finally figured out a way to lay down the law: It established a registration process for short-term rentals and barred Airbnb and other platforms from advertising rentals that hadn't been registered with the city first."

"While the Irvine study showed that Airbnb bans can successfully drive down rents, numerous studies have shown the other side of the coin: When short-term rentals come to town, rents go up. A 2020 study on short-term rentals in Berlin found that apartments listed on Airbnb increased the rents of nearby units. A 2017 study in Boston came to a similar conclusion. Other studies have documented these impacts on rents nationwide, including research from 2021 that estimated that Airbnb listings accounted for one-fifth of rent growth in ZIP codes with a median share of people who own and occupy their home."

"When you consider the law of supply and demand, these findings make sense. When supply of a commodity drops but demand stays the same, the price of that commodity will rise. That's what Airbnb does to the housing supply. As the Berlin and Boston studies found, when houses or apartments are pulled off the long-term market to be used as short-term rentals, housing supply decreases. But actual residents still need a place to live, so they are forced to fight over — and pay up — for the more limited housing stock. The Irvine researchers figured that rents dropped after the local ban because when the landlords put their Airbnbs back on the market as long-term rentals, there was more housing supply. Suddenly, the landlords had to compete for tenants, making it harder for them to jack up rents. The Irvine study found little evidence for alternative theories, such as the notion that the Airbnb ban hurt the local economy by reducing tourism, thus displacing tenants and lowering demand for rentals."

"It is 'common sense,' according to Cox. 'It's not some abstract commodity,' he said of short-term rentals. 'People were living there before.'"