The short-term rental market has been controversial to say the least—but with proper regulation, short-term rentals can have big economic benefits for cities, according to Rob Stephens, co-founder of Avalara MyLodgeTax. Stephens says that because of these benefits, cities should embrace the short-term rental market, especially in places like San Diego, where there is huge demand for short-term rentals through sites like Airbnb.
“There are significant economic benefits from tourism and short-term rentals. There is the direct benefit of occupancy tax to the city, but more significantly travelers spend significant dollars on restaurants, shops, amusements and more,” Stephens tells GlobeSt.com. “Tourism is a great contributor to the local economy and short-term rentals provide lodging options to help drive demand.”
The benefits of short-term rentals go beyond taxes. They can also spur the homeownership market by helping to fund home purchases, especially for second homes. “For homeowners and hosts, short-term rentals can be a fantastic way to support the cost of purchasing and owning a second home,” says Stephens. “The extra income can also fund improvements or support property maintenance. Also, for people renting their primary home, it can produce extra income for upkeep or simply helping make ends meet, especially in expensive real estate markets like San Diego.”
Regulation has been the biggest roadblock for cities in embracing short-term rentals, and that isn't necessarily because of a lack of regulation. In San Diego, there are regulations in place, but those regulations have not been enforced. “For many years, short-term rentals were not well known or on the radar screen of major cities,” says Stephens. “Historically, San Diego has been a market with reasonable registration and tax filing requirements, and they haven't aggressively policed the industry so far.”
Demand is increasing for short-term rental properties, and this is the time for cities to react. Ultimately, short-term rentals will fuel more travel in the market. “Travelers have grown to love short-term rentals,” says Stephens. “They are a great option for vacations and travel, particularly for groups and families. Many of these trips would not happen if short-term rentals were not available. For instance, a family is much less likely to plan a reunion or trip in a hotel, versus renting a house where everyone can be together and cook their own meals. Plus, it's much more affordable.”
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Kelsi Maree Borland
