Benefits, drawbacks of short-term rentals debated
SALT LAKE CITY – Utah’s popularity as a tourist destination and an increase in travel has led to a jump in the number of short-term rentals in the state, along with a split in communities over where they should be allowed or if they should be prohibited completely.
Opponents argue short-term rentals are taking units off the market that could be used for long-term housing and contributing to higher rents. They also complain about parking problems, noisy parties and disruption caused by the constant turnover of guests.
Supporters say they enjoy having the option of staying in a short-term rental rather than a hotel or the opportunity to generate income by renting out their property. They also dispute that the rentals play a big role in housing supply or prices.
Short-term rentals – including rooms, apartments, condos and single-family homes – can be booked with property hosts through platforms that provide reservation services, including Airbnb and Vrbo. (A common misconception is that the short-term rentals listed on these booking sites are Airbnbs or Vrbos.)
The percentage of short-term rentals, which are residential units offered for occupancy for fewer than 30 consecutive days, varies in communities. Hotels, motels and bed-and-breakfasts are not short-term rentals.
Approximately 19.3% of Grand County’s housing was listed as a short-term rental in 2021, up from 16.5% the previous year, according to a 2022 policy brief by the Kem C. Gardner Policy Institute.
Statewide, the units accounted for approximately 1.6% of total housing units, a slight increase from 1.4% in 2020, the brief said. The figures did not include the second-home market.
The rise of short-term rental properties exploded globally over the last decade, the policy brief, by senior research fellow Dejan Eskic, says.
“This has impacted housing supply and affordability,” the brief says. “Academic research indicates a relationship with increasing STR supply leading to a decrease in affordability and housing options as supply is occupied by visitors rather than full-time residents.”
A statewide NIMBY debate
But State Rep. Calvin Musselman, R-West Haven, a realtor, says except in certain communities, short-term rentals have only a slight impact.
“I can definitively say on a statewide or even a countywide level, the popularity of purchases of short-term rentals didn’t really move the needle,” he said. “But it’s a contributing factor, along with lots of other contributing factors. I’m just saying it’s never one thing.”
Musselman also said availability and affordability are not always tied together because some places are not affordable in the first place. For example, Park City still would not be affordable for the average person even if there was no short-term rental market there and more units were available, he said.
The NIMBY (not in my backyard) debate is statewide. The Ceder City News reported some residents said at a March housing town hall in Ivins that they wanted no short-term rentals but officials said they are inevitable and should be managed.
Rep. Neil Walter, R-Santa Clara, was at the town hall and argued prohibiting short-term rentals would drive them underground, where there would be less control over their proliferation, the newspaper reported.
Walter told Utah Political Underground that short-term rentals in Washington County are highly regulated already through zoning and their impact on the housing supply is relatively small, “given that getting them approved is not easy and the municipalities are very careful about where and how many they approve.”
The discussion over how many short-term rentals should be allowed and where they should be is not all or nothing, he added.
“We want everybody to come to a consensus about what the actual policy is and sometimes we just have to remember that it’s OK and it’s reasonable for there to be a range of views,” Walter said. “And our municipalities, I think, are very diligently trying to navigate the appropriate balance.”
‘Losing our community’
Andi Beadles, executive director of the Weber Housing Authority, said neighbors of short-term rentals get frustrated when there are parking problems and lots of people partying at the properties. On top of that, they don’t like not being able to contact an owner who might be out of state, she said.
Short-term rentals also affect the affordable housing market by decreasing the number of units available as regular rentals, Beadles said. Among the services provided by her agency are rent assistance and homeowner assistance.
“Where we’re seeing the biggest impact is just the decrease of housing units available on the market to any renter, which then affects our populations,” Beadles said.
The decrease leads to a trickle-down effect, she said.
“Households that used to be first-time home buyers now are being priced out of the market, which then pushes them into the luxury rental market, which then pushes that population into the moderate rental market and then pushes that population to the low-income market and then pushes the low-income individuals into homelessness,” Beadles said.
Eden resident Jan Fullmer has been tracking the short-term rental situation in Ogden Valley and pushing for limits where the units can be and stricter regulations. When she and her husband moved there, they specifically chose to live in a place that had a homeowner’s association and stringent CC&Rs (covenants, conditions, and restrictions), she said.
Thanks to the CC&Rs, short-term rentals are not permitted in her community, Fullmer said. However, about 27% of the approximately 4,100 dwelling units in Ogden Valley – which is composed of the Huntsville, Eden and Liberty communities – are legally allowed to do short-term rentals, Fullmer said.
“We’re losing our community because what’s happening is these places are being purchased by people who want second homes and who are renting them out to try and cover their mortgage,” Fullmer said. “But they are not part of our community.”
Weber County compliance officer Iris Hennon said short-term rentals are allowed in the Forest Residential Zone FR-3, Residential Estates Zone RE-15 with a planned residential unit development (PRUD), Ogden Valley Destination and recreation Resort Zone DRR-1, Commercial Valley Resort Recreation Zone CVR-1.
Owners must have a short-term rental license and comply with regulations that include maximum occupancy limits, noise limits from 10 p.m. to 8 a.m., a trash collection and disposal plan, a requirement to provide parking spaces and fire safety measures. Owners can be fined and their short-term rental license can be revoked, depending on the severity of the violation.
Enjoying the amenities of a short-term rental
Julie Davies, a consultant in the short-term rental industry who co-authored and teaches STR certification college courses and holds training sessions on best practices for municipalities, said there have been surges in the consumer demand for the units over the years.
The pandemic hurt the overall lodging industry at first but that has changed in Utah and other places in the country, she said.
“After things were opened up, people wanted to travel in groups,” Davies said. “They wanted to be able to go some place where they could sit down at a dining room table and have a kitchen available. They wanted their own pool. They wanted their own space and they wanted locations that were more remote than some of the more popular destinations before COVID.”
Not all short-term stays are for vacations, she said. Some are stays for business, to visit someone in the hospital or for temporary lodging while a damaged home is being repaired, she said.
Davies, a Las Vegas resident who also consults for hotels, said a lot of public officials say they stay in short-term rentals but don’t want them in their neighborhood. Officials often wait a little too long to regulate short-term rentals until operators who don’t know what they’re doing take bad advice and have problems, she said.
“Then they think, let’s shut them all down,” Davies said. “What we need to do is look at it as a business that needs to be regulated and licensed. So if I’m going to host people in a residential unit, I need to understand that I need to get a business license for it and make it a safe, neighborhood-friendly business.”
By licensing short-term rentals, the state could collect more hotel room taxes, she said.
Davies estimates at least 90% of short-term rentals in the state are unlawfully run, a figure she reached by looking at the number of licensed units in Utah cities compared to information in statistical reports and on the reservation platforms. She has heard stories from around the country of guests assaulting an owner or another guest, homes being packed with dozens of people partying and smoke detectors being disconnected by people who smoked in the home.
Code enforcement can be difficult because a law passed by the Utah Legislature prevents a city from prohibiting the use of a short-term rental website to offer a short-term rental or using an ordinance that prohibits renting a short-term rental to fine or other punish someone solely for listing the rental, she said. The prohibition against using any platform information ties municipalities’ hands, she said.
Rules for guests and hosts
Airbnb says on its website that the majority of guests are considerate travelers who treat hosts’ homes like their own and respect the neighborhoods where they’re staying. A set of ground rules rolled out in August covers cleanliness, noise, damage, smoking, approved guests, gatherings, approval for pets and other issues.
A majority of guests who book stays in Utah on Airbnb are from Utah, according to the company.
Davies said she would love to have a legal short-term rental in her neighborhood that is run well.
“First of all, they will always want to keep the yard beautiful because they want it to look like their listing photos or they’ll get a bad review so it will be well-maintained,” she said. “If their guests are complaining or if they have a code violation because the garbage is left out, they wouldn’t want that because it could jeopardize their license.”
In addition, when she has lots of relatives visiting, some could stay there instead of sleeping on the couch or the floor at her home, Davies said.
Finding what works best
Musselman and Rep. Gay Lynn Bennion, D-Cottonwood Height, each introduced a bill on short-term rentals in the past legislative session but both were held in committee.
Among other provisions, Musselman’s House Bill 291 required owners to get a sales tax license and clarified the prohibition against punishing an individual solely for the act of listing a short-term rental on a short-term rental website.
“Communities need to find what works best for them in managing short-term rentals, but they need to do it in a way that truly respects private property rights and the ability for people to rent their properties as they see fit and that’s not an easy balance to strike,” Musselman said.
Bennion’s legislation required municipalities and counties that allow short-term rentals to adopt short-term rental ordinances and regulations; required owners to obtain a permit to operate the rental; and established safety requirements.
She sponsored House Bill 496 after constituents contacted her about their neighbors converting homes into short-term rentals in their residential neighborhoods, including one owner who was adding two more kitchens to create three units.
“I’ve known that it’s a concern for quite a while and I’m concerned that our state has made it kind of confusing so cities almost feel like they can’t do a lot of enforcement because they might get sued,” Bennion said.
To get a permit under her bill, owners would have been required to designate a local contact who lives within 60 miles of the rental and both would have to complete a short-term rental education course. The total number of occupants could not exceed 16 and the rental could accommodate only one reservation at a time.
In addition, each level where guests were allowed would be required to have at least one functioning smoke detector, carbon monoxide detector and fire extinguisher.
The goal of her legislation is to make short-term rentals a normally functioning business that works with the city, has a business license and is responsible for their own interactions with the public and not reliant upon police or any other public service, Bennion said.
The Libertas Institute, a nonprofit think tank, has said banning or heavily restricting short-term rentals violates property rights.
Noting that stance, Bennion said, “The community also has a say in how many homes are available for people that live in that community because that affects how many children go to their schools and how many people are available to be on school boards and on the city councils.”
