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Thoughts and Questions on Short Term Rentals in the City of Harrisonburg |
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 More great reporting over at The Citizen about short term rentals...
And a few prior articles...
And to follow that recap, some thoughts and questions... Does approving a Short Term Rental remove a property from the local housing stock? Not really - or not most of the time? Most of the Short Term Rental applications have been from owners who live in their home and want to offer a portion of their home as a short term rental option. So - those properties aren't being removed from the local housing stock - the owners still live there. Further, the approval of a non owner occupied property as a Short Term Rental wouldn't remove a property from the "purchasable housing stock" since the owner is presumably currently renting it to a long term tenant. Technically, a property owner could decide to stop renting a house to long term tenants and start renting it only to short term tenants -- thus making it such that most occupants of the house would not be local residents, but just those passing through. In that situation it would, in some ways, be moving the property from the local housing stock to the "local hotel stock" - if that were a thing. This (converting a home from being occupied by the owner or a long term tenant to being occupied only by short term tenants) doesn't seem to be the majority of what is being proposed or considered - and my general sense (not scientific or data driven, I know) is that there is only so much of a market of would-be tenants for short term rental properties. If one hundred local property owners moved out of their homes, were approved to use them as short term rentals, and listed them on AirBNB, I don't think that all, or most or would be pleased with the rental demand from short term tenants. If one Short Term Rental is approved on a street or in a neighborhood will lots of other property owners follow suit and apply to become short rentals? Not really - or not most of the time? I think most folks who own and live in their homes in Harrisonburg enjoy living in their homes, probably by themselves. I don't think that the ability of one home out of 50 (in a hypothetical neighborhood) is going to cause more and more property owners to either take in short tenants to live with them, or to move out of their homes and start renting them to short term tenants. Will investors start buying up properties in Harrisonburg as short term rentals? Probably not, or not in large numbers? I don't think there is an untapped demand by short term tenants that would reward those investors with frequently rented short term rental properties. Yes, it is technically true that renting a property to 100 tenants for short terms instead of one tenant for the entire year is almost certainly going to be more profitable - but I just don't think there is that much demand by short term tenants. As a side note - there are plenty of localities where ordinances limiting short term rentals do not exist. I tend to think that investors would be more likely to invest in a property where short term rentals are not regulated before they'd invest in a community where there are somewhat restrictive regulations in place. Will the City's new Short Term Rental policy increase or decrease the number of City properties that are being used as short term rentals? To me, this is one of the more interesting questions. Property owners in the City have been operating short term rentals in the City for quite some time now (5+ years?) without actually having the legal ability to do so. Most of the concerns above seem to be regarding the hypothetical possibility that more and more and more properties will be come short term rentals. I tend to think that we won't see a large shift in the number of properties being used as short term rentals when comparing (for example) 2018 and 2020. Of the folks using their homes as short term rentals prior to these regulations:
Those four (non-exact, non-numerical) changes above would seem likely to result in a net decline in the number of short term rentals -- and moving forward, property owners would seem to be less likely to want to use their property as a short-term rental as there is now a higher barrier to entry in the form of an application fee and several months of processes and meetings. Should most Short Term Rental applications be approved? Not necessarily? City Staff, Planning Commission and City Council are looking at each application through many lenses to understand how each property being used as a short term rental would affect surrounding property owners, the neighborhood, etc. I think all of those property-specific perspectives are valuable and I am glad to see the thoughtful process being used for deciding whether to approve short term rentals. The broader thoughts of "maybe we shouldn't approve any or many short term rentals because of how it could have a large impact on our local housing market and housing stock" (my summary, not a quote) are a bit more difficult for me to agree with - at least given my understanding of the short term rental market as of today. Am I completely wrong to not be overly concerned about unintended consequences of approving many or most applications for short term rentals? Quite possibly! If lots of property owners decide they want to pursue using their property as a short term rental AND the City approves many or most or all of them AND there is an unexpectedly high demand from short term tenants -- then it is possible that there would be widespread negative unintended consequences. I'm not thinking this is likely - but I could be wrong. What are your thoughts? Recent Articles:
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Scott Rogers
Funkhouser Real
Estate Group
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scott@funkhousergroup.com
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