15 July 2012

Renting out your home may be illegal

Excerpts from a story in Washington Monthly:
For more than a year now, New York City has been enforcing a new state law that makes it illegal for homeowners like Hogan to rent out their house or apartment for less than a month. All across the city, police raids have shut down hundreds of similar informal bed-and-breakfast establishments, with nearly 1,900 different violations issued in under twelve months. Often, the fees associated with the citations stretch into tens of thousands of dollars. Hogan was threatened with a $25,000 fine—all for marketing the empty rooms in his house.

Short-term vacation rentals have existed for years with little attempt by local governments to stamp them out. But thanks to the Internet, an industry that was once small and underground has, in a few short years, exploded into a multibillion-dollar worldwide business.

But an opportunity for some can be seen as a threat by others. Short-term vacation rentals like Hogan’s cut into the bottom line of some powerful interests, and those interests are pressing local governments to put a stop to the practice. The dynamics that have led to the crackdown in New York are playing out nationally—and internationally—as governments struggle with how, or whether, to accommodate a burgeoning new vacation rental industry. While some regulation and taxation of this new market is inevitable and necessary, the danger is that we may strangle precisely the kind of small, entrepreneurial markets we should be fostering...

The crackdown in New York is similar to ones happening in several major European cities. Paris, for instance, passed a law in 2005 banning the rental of any residential property for less than a year, and began enforcing that law in 2010. London is now engaging in a wave of enforcement in the run-up to the 2012 Summer Olympics...
Crackdowns against vacation rentals are also happening in other cities across the United States, in part for fiscal reasons: municipalities need the money. Cities like Palm Desert, California, and resort communities in Colorado have recently required short-term rental owners to buy permits and pay taxes, as well as abide by parking, trash, noise, and other ordinances. But these restrictions don’t seem unreasonable. The permits aren’t prohibitively expensive (a few hundred dollars), the taxes aren’t unfair, and unruly guests can legitimately upset neighbors...

The danger of any ordinance restricting commerce is that it will wind up protecting incumbent interests at the expense of new entrants into the market. So even the more reasonable-sounding laws bear watching. But if done right, these lighter rules could ensure that necessary taxes are paid, legitimate neighborhood concerns are respected, and average citizens are free to make use of an untapped, valuable asset: their own homes.
More at the link, via The Dish.


  1. Here in Las Vegas we have a similar law (over and above a state law requiring a local "responsible person" or property manager for rental property). It's got nothing to do with protecting big hotel interests and everything to do with protecting neighborhoods.

    We had a problem with "party houses," where out-of-towners would rent a house in a normal neighborhood and have loud, drunken parties every day with many cars and probable illegal drug use. If these people were just interested in a place to stay that's more homey than a big hotel, they would be at one of our many local "hotel suite" short term rental communities. The purpose of renting the house off strip is to engage in behavior the neighbors would complain to management about.

    You can say this is about the right of a property owner to rent his property, but what about the right of every other property owner on the block to live in a peaceful home?

    1. "If these people were just interested in a place to stay that's more homey than a big hotel, they would be at one of our many local "hotel suite" short term rental communities."

      Really makes you sound like you represent a hotel chain.

  2. Short Woman beat me to it. Las Vegas prohibits short term rentals. I had business there for a week and I needed my own kitchen. So I rented a condo for a week, but I had to do it on the low down and not tell anyone.

    1. Hi Ron!

      If you ever find yourself in that spot again, there are a couple of places just West of i-15 you should check out. Extended Stay America comes to mind (my husband ended up staying there for a month while we were in the process of moving). I can't remember the name of the place on Russell but I think it's Starwood-owned. Also, some people rent out their time shares instead of staying in them so it's worth calling.

    2. I checked those places out. But they were too expensive. I got a good rate on the condo. I also needed 2 bedrooms, which this condo had. It also had a fireplace too. Nice.

  3. For my honeymoon last year, my wife and I rented an apartment in downtown Vancouver, BC. It was better for us than staying in a hotel. It was cheaper, it had a full kitchen, and a beautiful balcony. On top of that, it was nice to feel more like a resident than a tourist. I have no idea how regulated the practice is in Vancouver, nor if the owner paid any taxes or fees to rent out her apartment, but we did have to sign a pretty official looking contract.

    As ShortWoman mentioned, the neighbors deserve to live in a comfortable, neighborhood environment. As long as regulation can balance the needs of the owners to rent out their places with the needs of the neighbors then it's a win for everyone involved. I would hate to see the practice banned completely, as I would love to do it again sometime.


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