Can States Regulate Wild Airbnb Parties?

by | June 24, 2019 AT 8:44 AM

By Elaine S. Povich

Just a couple of days after a rowdy house party at a short-term rental property ended in gunfire in a residential neighborhood in Rocklin, California, near Sacramento, Erin Youman, a neighbor, approached the City Council at its regular meeting.

Shyly, she went to the podium.

“I’m concerned about the welfare of our families on Grove [Street], especially after what happened over the weekend. What’s the plan?” she asked. “Can we have something stricter? I know it’s an Airbnb and people have their right to make money, but is there something we can do to make the environment a little more regulated? My family’s home is directly across the street from the Airbnb. We’re a little concerned.”

Oh, yes, responded Republican Mayor Joe Patterson, who said he had asked his staff to come up with some new rules in the next month or so. “We’re all shaken by the incident that happened over there,” he said.

Patterson was referring to the fracas in the wee hours of the morning, in which two people were shot and the alleged perpetrators sped off in a car, only to make an abrupt U-turn and fire more shots at the home on the way back, according to the Sacramento Bee.

Youman’s father, who owns two homes in the neighborhood that his grown children live in, said parties occasionally occur at nearby short-term rental homes. After the shooting, he sent a message on the Airbnb app to the owner of the Grove Street property. She said she would get back to him, but didn’t.

“It bothers me that it’s in a residential area not 100 yards from an elementary school where my grandsons go,” he said, adding that anyone could rent the home, including sex offenders and drug traffickers.

He thinks the city should have tighter rules, especially since there’s a big homeless problem in California and the short-term rentals keep properties off the long-term rental market.

Patterson and the city of Rocklin are not alone.

A number of violent incidents have been reported at short-term rentals around the country. Just this month, a shooting at a graduation party in Pittsburgh left two dead and one injured. Neighbors told WPXI news that the home is rented out regularly on Airbnb.

While the number of violent and destructive incidents is small compared with the number of short-term rentals sweeping the country, the episodes have provided fodder for individuals and groups that want to see governments restrict the rental properties. They include hotels that are wary of competition and advocates for low-income housing who worry about taking affordable units off the long-term rental market.

Airbnb expressed horror at the Pittsburgh homicide, kicked the renter off the site and pledged to work with city police on its investigation.

Christopher Elliott, who runs the nonprofit Elliott Advocacy based in Prescott, Arizona, which advocates for consumers, said the isolated incidents might not necessarily be a reason to regulate the short-term rental market more tightly.

He suggested that people who want to build a case against Airbnb and other short-term rental companies like VRBO would use these incidents as fuel. “Most renters are responsible and don’t do these kinds of things,” he said. “I’m not sure we should use this as a reason to regulate Airbnbs.”

Ulrik Binzer, CEO of Host Compliance, a Seattle-based consulting firm that helps cities establish and enforce short-term rental regulations, said in a telephone interview that while out-of-control incidents are rare, they often “become the catalyst for [cities] taking actions to regulate the industry, because when that happens, you can’t ignore it anymore.”

Binzer, whose company collects statistics on short-term rentals, also said that 2% of the rental properties “create 80% of the issues,” and once regulations are in place, cities can weed out the bad ones.

Cities and states have been grappling with the short-term rental market, which has exploded worldwide. The travel industry research group Skift reported last year that worldwide short-term rentals grew more than 80%, from $46 billion in sales in 2012 to $83 billion in 2017. In the same period, hotel room sales increased 27%, from $404 billion to $512 billion.

While most regulations are imposed locally, states have been getting into the act too, with most of their recent bills and laws aimed at preempting local regulations that would clamp down on the Airbnb-type rentals. Many of the laws stop local governments from taxing, restricting or eliminating short-term rentals.

Arizona, Florida, Idaho, Indiana, Nebraska and Tennessee have laws that broadly prohibit localities from banning short-term rentals, according to the Vacation Rental Management Association, a trade group.

Short-term preemption bills were introduced this year in Alabama, Georgia, Illinois, Maine, Mississippi, Oregon, Nebraska, South Carolina, Texas and West Virginia. Only two became law: in Nebraska and West Virginia.

It’s not just neighbors upset at the wild parties. Unsuspecting homeowners can get burned too.

A New York man, Nicko Feinberg, rented his luxury home through Airbnb, and his renters put out the word on social media that they were having a “mansion party” at his place, invited 300 people and trashed the place, he said in an interview. When he returned, “it looked like someone had poured vodka, Kahlua and champagne on the floor,” he said. “Artwork was missing, the [glass] staircase was broken, everything was broken.”

He eventually received hundreds of thousands of dollars in compensation from Airbnb, he said, but only after seeking media publicity and negotiating for more than six months with the company.

Airbnb has counseled homeowners to clearly spell out “no parties” on their house rules, and several years ago instituted an Airbnb Neighbors link to allow nearby residents to lodge complaints on their site in an effort to curb the partying.

In Nashville, Tennessee, the country music town named by CNN as the “bachelorette capital of the world,” police earlier this month said a guest went “psycho” at a party and was arrested after she allegedly drank two bottles of wine and trashed a short-term rental house, the Tennessean reported.

The guest was charged with vandalism. Sean Braisted, spokesman for the Nashville Metro Codes Department, said it can be hard to apply the rules that govern short-term rentals.

“The state requires a three-strike rule, and you have to prove it was the result of the short-term rental occupation,” he said in an interview. “That can be challenging, to tie all those together and make a case to remove a permit.

“We have large parties that come to Nashville to have a good time, and they will get a large home with multiple bedrooms and rooftop decks,” he said. “We do our best to regulate them.”

Braisted said there are 5,326 active short-term rental permits in Nashville, but more than 1,600 noncompliant dwellings have been identified and are awaiting action by the codes enforcement staff.

To be sure, Airbnb has promoted its rental offerings as party locations, Airbnb shared a list of top spots across the country for bachelorette parties on a blog, the Zoe Report, this spring, including a Victorian home in Santa Barbara, California, and a downtown loft in Nashville.

Nashville Mayor David Briley, a Democrat, pledged last month to hire two more short-term rental inspectors and expand restrictions on short-term rentals that are not owner-occupied.

Among the issues that “crop up every day,” Briley said last month in his State of Metro Address, is the “short-term rental owner, who’s good at disturbing the neighborhood and bad at following the rules.” As he outlined his plans for more enforcement and higher fees for short-term rental permits to cover the costs, the audience responded with enthusiastic applause.

Airbnb spokesman Ben Breit said the violent incidents are uncommon. “Our community’s safety, both online and offline, is a key priority. There have been more than 500 million guest arrivals in Airbnb listings to date and negative incidents are extremely rare,” he said in an email to Stateline. He did not enumerate them.

American Family Voices is part of a coalition advocating for tighter restrictions on short-term rental properties to preserve affordable long-term rentals. Its executive director, Lauren Windsor, said the violence and vandalism reports will bring more pressure on local governments.

“It’s not a tenable situation in communities, so governments need to step in and take some kind of regulatory action,” she said.

Windsor’s group is backed by the Hotel and Lodging Association and unions like Unite Here, as well as grassroots groups like Keep Neighborhoods First, an affordable housing collective, and Communities for Change, a nonprofit that, in conjunction with the Massachusetts Institute of Technology, studies making cities more inclusive of residents of all income levels.

Windsor’s group has pressed cities to make sure short-term rentals don’t push out the long-term rental properties, leaving moderate and low-income residents with fewer and more expensive properties to rent.

“The problem occurs when you have commercial operators that skirt the regulations,” she said, “they are taking housing stock off the market by putting whole homes up for rental.”

Patrick Tuohey, director of municipal policy at the Show-Me Institute, a free-market think tank in Kansas City, said homeowners and hotels are watching the news reports warily. “These types of stories confirm their worst fears and arms them when they ask for regulation from the city and county.”

He said homeowners who are renting their properties already have been ratcheting up their requirements for renters, including asking for identification and posting lists of house rules.

“People who rent, people who put their house out on the market, are learning,” he said. “The questions they ask people who are renting will change. I don’t think it’s necessary to throw the baby out with the bath water, but I think this is a growing pain of this market.”

Stateline | Nonpartisan, Nonprofit News Service of the Pew Charitable Trusts | editor@stateline.org  |  @pewstates