1.4 Regulations and Restrictions

As the vacation rental business continues to grow, so do regulations, restrictions, and other legal arguments against it.

We can all understand the feelings of residents in areas that are being overwhelmed with short-term rental homes.

Some are being rented indiscriminately to party groups causing disruption in neighborhoods that have previously been home to residents only. This new influx has created bad feelings between residents and vacation homeowners.

Complaints are being heard across the country and it’s worthwhile checking some of these media reports out to see what is happening in different areas:

In some areas outright bans against rentals under 30 days in duration are already in effect, however many owners have operated ‘under the radar’ until a complaint has been made. More communities are activating by-laws that have been on the statutes for decades, or creating new zoning and legislation banning or restricting rentals..for example:

Las Vegas votes to curb short-term rentals with new home-owner restrictions

LA City Council passes restriction on Airbnb & other home-sharing platforms

Short-term rental restrictions approved for unincorporated Ojai Valley

Then there are pockets of resistance – one of the largest being Sedona where state law now prohibits the city from regulating short-term rental activity.

This is in direct contrast to a 2015 article that said the following:

“Sedona, AZ has banned the rental of single-family residences in residential districts for less than 30 days since before 1995. In 2008, Sedona also adopted an ordinance banning the advertisement of illegal short-term rentals. These bans remain in place and continue to be enforced. Violations of these ordinances can result in a Class-1 misdemeanor conviction and subject violators to fines of up to $2,500 and imprisonment of up to six months. Every day a violation continues can constitute a separate criminal offense.”

City ordinances have been active in the short-term rental market since Airbnb came on the scene with New York and San Francisco being the primary urban areas with legislative issues.

However these are spreading across the US & Canada and with the growth in the industry, wherever there are short-term rentals there will be issues.

Depending on where you are located you could be looking at regulations introducing some or all of these:

  • Outright bans
  • Licensing
  • Restrictions on rentals under 30 days
  • Limiting the # of units permitted to rent
  • Restrictions on occupancy

Depending on your location, there may be issues with zoning, by-laws, HOA restrictions, condo management rules, or pending local regulations.

In some areas, there may be zoning restrictions that are buried in the township or municipal bylaws – meaning that many rentals are operating ‘under the radar’. At any time, a neighbor complaint or council initiative could resurrect the clauses bringing significant problems to homeowners who have been or are intending to rent.

Your municipality or town council should have information on local bylaws – often found online.

What is happening in your area? Can you summarize the current restrictions and any that may be in the legislative process at this moment? Are there any active action groups operating in your location?