Saturday, March 19, 2016

The "Affordable Housing" Excuse for Regulating VRs

When considering increasingly strict regulations on Vacation Rentals, local legislators are often faced with opposition from:

o   VR owners who have invested in the community ,

o   concerned businesses that depend on vacation rental activity for important parts of their income, and 

o   citizens who are concerned about possible damage to the local economy.

Opposition tends to trigger attempts to justify new regulations, and a favorite argument is that VRs cut down on the availability of "affordable housing" in the community.  Affordable housing is a legitimate concern for many communities, but one could argue that this argument is a poor excuse for new regulations on VRs.


o   the argument is often raised as a justification for new regulations, when proposed new regulations will do nothing at all to increase the availability of affordable housing.

o   legislating to provide affordable housing where needed is the job of the government, but passing regulations on VRs in order to solve housing problems,  effectively transfers that responsibility onto the backs of VR owners and the businesses that serve owners and their guests.  

o   VR owners can certainly make their own contributions to increase affordable housing, and some do, but it is not their job to do so.  Their investment in the community should not be degraded by such poorly conceived legislation, and local government should not be forcing them to subsidize responsibilities of the government.

o  families that have owned properties in a community for generations, and rent them out to tourists in order to support carrying costs of such properties, should not face bans or restrictions that prevent them from holding on to their properties.

o   properties that are attractive to tourists who visit a community are often properties in prime locations or with historic significance, and are not typically properties that would ever be considered "affordable" for those who need low cost housing.

o   many vacation rental owners and related businesses want to contribute to their host community, and already do so through donations to charities, donation of free nights of lodging for fundraising, donation of housing during community emergencies like Hurricane Katrina or Superstorm Sandy, and through involvement with local civic organizations.  The choice of how to support the local communities rightly belongs to the VR owner that is donating.

It is the job of local governments to deal with affordable housing costs if it truly is a local issue.  It is irresponsible of those government officials to transfer such responsibilities to a small subgroup of property owners at their expense.

"A rising tide lifts all boats".  Communities should be building their local economies to benefit all residents and taxpayers.  The fact that a community provides a highly desired lodging option is not a reason to decide to target VR owners to fund social welfare efforts.

Friday, June 5, 2015

Cities That Chase Their Short Term Rentals Away...

Have you heard the expression "shooting yourself in the foot".  The expression is shorthand for pointing out self-defeating behavior.

Many counties and cities exhibit this behaviour in their reaction to Short Term Rentals.  Its not too unusual to see:
  • a city, county or region that spends millions of dollars each year in an attempt to attract tourists, but passes laws that outlaw one of the most highly preferred lodging options for those tourists -- short term rentals.
  • cities and countys that spend several years courting a big business to come to their aea, because that big business brings jobs and tax revenues and prosperity when it opens its doors, but passes laws that are destructive to a thriving vacation rental economy that provides just as many jobs, just as much tax revenue, and just as much economic prosperity.
  • a city that spends millions to redevelop a section of their community, while outlawing activity of vacation rental owners, who have a history of redeveloping neighborhoods and improving property values, at their own expense.
  • city and county officials that complain about the lack of citizen participation, but are offended and refuse to listen when a hundred people show up at a meeting to tell them they are on the wrong track in their efforts to interfere with local vacation rental activity.
Vacation rentals impact local neighborhoods, just like longer term rentals do, but the economic, social and ecological impacts of disbursing your tourists in houses across a community are arguably much less than the impacts of developing large hotels and resorts.

In many communities tourism is seasonal, and a hotel and tourism district looks like a ghost town when the season is over, but in those same communities, vacation rentals tend to bring in families and business travelers all year long.

When factories and big box stores and other big businesses come into a community they create problems and bring benefits.  Legislators make agreements and appropriately regulate these operations, to manage the problems and maximize the benefits.  The same approach works well with vacation rentals.   

Responsible and thoughtful regulation of short term rentals can and should be done in a manner that is consistent with other goals of a community.

Doug Coates

Thursday, June 4, 2015

Defend Your Property - Tell Your Story

When VR owners and managers attend public meetings where regulation of vacation rental homes is being discussed, it helps to have an honest discussion about how short term rentals contribute to the community, and the impacts that they have on the community.

Here are some issues that you could discuss in such a forum.
Why You Rent Your Home
There are many myths about who owns the city’s vacation rentals and why owners rent out their homes.  You may have heard the statements about “wealthy out-of-town investors”.

The reality is that most owners are not wealthy investors - many of us have to rent our homes in order to continue owning them, and many of us have interesting stories about how we became owners of a vacation rental and why we continue to rent our home.

Tell your own personal stories about being a vacation rental home owner.

How You Promote Tourism
You may spend hundreds or thousands of dollars each year advertising your vacation home on the internet and telling people why they should come to your destination. You may bring a large number of repeat guests to the city each year.

The county or city your rental is in may already spend significant funds to promote tourism, and needs to know that we contribute to that goal too, at our own expense.

Tell people how you bring tourism to the the area, year after year.

How You Promote Area Businesses
Some of us make a point of finding the best restaurants and shops in the area, and make a point of encouraging our guests to patronize these businesses.  Others provide full directories of all services in town that guests might need while they are there. 

Many of us make a point of buying local goods and services to maintain our homes.  Property management companies, cleaning companies, restaurants, shops, grocery stores, gas stations and a variety of other businesses all see significant income as a result.

Tell people how much your guests patronize area businesses, and how much money they spend at these businesses.

Tell people how what types of local goods and services you buy for the vacation rental home and how much you spend.

How VR’s Support Local Property Values
Vacation rentals are often the best kept homes in an area.  They need to be, in order to attract return guests.  Some of us buy older homes that are headed towards decay and renovate them.  Property values on vacation homes are often higher than they are on other homes in an area because the houses are well maintained and rental income makes the property more valuable.

Tell people how our activity raises everyone’s property values.

What You Do To Minimize Problems
Many of us screen guests very carefully, and have crafted rental policies designed to promote good guest behavior, and prevent problems for neighbors of our vacation rentals.

Tell people how you work to minimize problems. 

Tell people what you do about it when there is a problem.

How Current Laws Affect You Already
Existing laws may prevent you from owning more than one short term rental, dictate landscaping requirements that sometimes can not be complied with, place parking restrictions on you that other area taxpayers do not have to comply with, and have other provisions that cost you money and limit your ability to cover the costs of owning the home.  In addition to having to comply with local laws as they are enforced by the police, you may also have an additional set of regulations to comply with that are enforced by a short term rental compliance officer.

If you or a guest violate any laws, you may be subject to large fines or lose the ability to rent your home.  Sometimes you can be penalized for things that you have no control over.

Tell people how current laws have impacted you.

Property Rights, and Laws That Take Them Away
The US Constitution and state laws are crafted to protect and defend the rights of property owners to use their property as they see fit.  Both proponents and opponents of short term rentals have property rights of course, but one group should not be able to inflict serious financial damage on the other group without cause.   Existing regulations may already seriously impact the property rights of rental owners.  New regulations that are being discussed may cause more serious damage. 

You may have bought your vacation rental based on the fact that you could legally generate income to cover costs of the home at the time of our purchase. Legislation that retro-actively affects your ability to generate income is unfair.

Talk about your rights as a property owner, and the damage it would do if your right to rent was further restricted or taken away entirely.

Regulations Should Address Documented Problems
In a country where everyone is talking about the need for less regulation and less government interference in our lives, government still plays an important role in our lives.  But existing regulations and new government regulations should be designed to address real problems.   In spite of suggestions that our rentals cause problems for a community, when a city is asked to document these problems, often few serious problems can be documented.

Tell people that new and current VR regulations need to be studied to make sure the problems they are designed to address actually exist – and if problems can not be documented, existing laws may need to be re-evaluated.  New regulations should not be created based on hearsay and rumor.

Wednesday, June 3, 2015

Citizens Rejects Vacation Rental Restrictions in Lincoln City, Oregon

Lincoln City Oregon was once described at a national meeting about vacation rental regulation as the poster child for poorly thought out attempts to regulate VRs.  Animosity by city officials towards the city's own century-long tradition of offering tourists the option to stay in local homes, has been going on for quite some time.  Local businesses and VR owners and even concerned local citizens have put up strong opposition to the latest new restrictions that have been proposed over the last 4 years.

Tourism is the city's # 1 source of economic prosperity, and almost everyone in the city, other than local city officials themselves, seems to think these recent proposals to regulate VRs would damage the tourism trade.

The former anti-VR mayor did one thing right, when he hired a "consensus builder" to bring a group of 20 local citizens together to work towards resolution of controversies about VRs, and make recommendations back to the city.  But when the citizens group stated that VRs were a significant contributor to the local economy, recommended simplification of the laws and recommended that the city identify what problems it was trying to solve before it wrote new regulations, the mayor and his council members were unhappy, and most of what their own citizens group had to say in their final report was ignored.

At the end of 2014, the city's anti-VR mayor was replaced with a mayor who promised a more constructive approach to VR regulation, but much of the city council remained closed-minded about VRs.  Last winter the council continued with its effort to restrict VRs, and passed laws that would have eventually restricted a large number of short term rental to renting only 30 days per year.

Frustration boiled over and local citizens, working with the Oregon Association of Vacation Rentals, filed LUBA (land use) appeals against 3 of the new ordinances, and filed with the state to do a Referendum Petition that they hoped would result in repeal of 2 of the new laws at the next public election in the city.  About 430 signatures were required by the state in order to force the new local VR ordinances onto the ballot for repeal.

Over 800 signatures were collected, and on May 19th, 2015, the vote was held.  The pro-VR crowd won the day with a respectable 7% margin, and both of the city's new laws have been repealed as a result.

This leaves the city with the old regulations on VRs still in place.  Not good, but better than the alternative of only being able to rent 30 days per year.  But city officials are very unhappy that their effort was rejected by their own citizens, and the city's lawyer insists that the old laws still allow city officials to restrict the number of days that VRs can be rented.  He pledges to start issuing expensive fines against VR owners based on his questionable legal theory.

What will happen next?   Hundreds of thousands of dollars and untold hours have been wasted on finding a solution for a "VR problem" that city officials refuse to identify.  One would think that city officials would move on to deal with other issues at this point, but that doesn't appear to be what is happening.

Local citizens are unhappy with the city's threat to continue pursuing restrictions, despite the clear rejection of the idea by local voters.  If city officials won't listen to their own citizens, maybe its time for new leadership in the city.

Stay tuned.

Doug Coates
The Oregon Association of Vacation Rentals

Friday, January 23, 2015

Some Key Resources on Vacation Rental Regulation

Here is a short summary of some of the best resources on the topic of vacation rental regulation.

Yogman vs Parrott

A decision by the Oregon Supreme Court that says that renting a home on a short term basis is an allowed residential use.  More specifically:

Plaintiffs assert that "[t]he acceptance of a fee in exchange for daily or weekly stays at [the home] is not a residential purpose" under the covenant. We disagree. Whether or not defendants receive a rental fee is not the determinative factor, because the "residential purpose" clause of the restrictive covenant controls the manner in which the property is used. Although the renters pay to occupy defendants' home, they are using the home for residential purposes. Plaintiffs do not assert, nor does the evidence indicate, that defendants' home, when rented, is used for any nonresidential purposes.

...defendants' practice of renting their vacation home on a short-term basis through a third party is not a commercial enterprise. Defendants' home is not open to the public for on-site rental, such as a motel, nor is it advertised as a rental by signs on the property. The maximum number of renters and vehicles allowed at any one time appears to be reasonable given the size of the home. What occurs on defendants' property is not any greater infringement on the residential character of the subdivision than would occur with a large family that regularly visited its own vacation home. The only distinction is that defendants receive a fee for the use of their home. Under the covenants involved in this case, that alone is not enough to constitute a commercial enterprise.

White Paper on Short Term Rental Housing Restrictions by the National Association of Realtors

Covers the way short term rental housing is regulated nationwide.  Some key parts of the study:

      ... some short-term rental regulations might also cause an owner to lose rental income because of suspension or revocation of a rental permit, even if the reason for suspension or revocation is beyond the owner‘s control (e.g., tenant behavior).

      ... added limitations on the use of properties that short-term rental housing restrictions impose may cause property values in the district or neighborhood to decrease.

      A widespread ban on short-term rentals that results in a substantial number of homes being sold or foreclosed upon may flood the market, causing property values to fall and remain depressed for a period of time.

      ... tourists who become aware of the new restrictions may perceive them as being motivated by, and evidence of, an ―anti-tourist
sentiment among full time residents of the community.

      ... short-term rental restrictions that negatively affect local tourism could cause sales tax revenue to decrease if restaurant and retail sales are down due to diminished tourism.

      It is well established that a land use regulation that is excessively restrictive may constitute a ―taking of property for which compensation must be paid under the state constitution and the Fifth and Fourteenth Amendments to the United States Constitution.

      Communities that have not adopted general community-wide noise regulations or the other regulations aimed at curtailing the types of behaviors and activities that would be regulated under a short-term rental ordinance, should be encouraged to adopt such general regulations rather than to single out short-term rental properties for regulation.

Successful Integration of Vacation Rentals Into Communities

A review of the history of vacation rentals world-wide, which discusses negative impacts, positive contributions, property rights and community dynamics related to short term rental activity.  Summary:

Host communities see the most benefits and the fewest negative impacts from vacation rental operations when rental owners, rental agencies, community members and legislators cooperate, respect each other and work together.

Asheville, NC Approves VRs in Residential Zones 

An article about a community that removed prohibitions on short term rental activities after finding that the 2 year old restrictions were negatively impacting the local economy, property values and opportunities for home ownership.   Its not uncommon for communities that pass severe restrictions to come back in a few years and rethink the laws due to concerns about negative impacts.  I can provide other examples.  Ashland, OR is currently going through this process….

Commissioners Chairman David Gantt noted the issue had been discussed since December, and the county Planning Board voted 5-1 last month to recommend the change.  “I think it’s really been something that’s had a lot of community input,” Gantt said.  Backers said the change would help the economy and the housing market by bringing more tourists to the area and allowing another use for houses in unincorporated areas.  “We’re seeing a lot of folks who can’t sell their properties,” said Chip Craig, owner of GreyBeard Realty in Black Mountain.

Recent Events in Lincoln City Oregon

Lincoln City, OR recently passed a series of severe restrictions on vacation rentals, including a restriction that says some home owners can’t rent for more than 30 nights per year.  Direct impacts of this action:
·         The local anti-VR mayor of the city lost his bid for a seat on the county commission.
·         A new Pro-VR mayoral candidate was voted into office.  He won 60% of the vote against an anti-VR opponent.
·         Local citizens filed for a voter referendum, pointing out that the new laws would severely impact the local economy, and asking local citizens to sign petition that would force the issue to a public vote.
·         434 signatures were required to make the referendum petition successful.  Almost twice that many people signed the petition.  As a result the laws are temporarily suspended, and local citizens will get to chance to reject the laws in a May 2015 election.

Studies Find Short Term Rentals Bring Enormous Economic Benefits….

March 2014 independent study of both small towns and big cities cites the economic benefits that short term rentals bring to communities.

In Chicago, short-term rentals generated $108 million in overall economic activity in 2013 with $70.6 million of that activity attributable to visitor spending on short-term rentals and related on food, recreation, transportation and other expenses, according to the study by TXP Inc. For every $100 a traveler spent on short-term rentals, they spent an additional $69 on food, $24 on transportation, $59 on shopping, and $48 on arts, entertainment and recreational activities.

Sunday, November 9, 2014

Who Will Buy the Homeaway Listing Site

According to the traval site Netamatrix and others - Homeaway.Com is preparing for opportunities to sell out to another online travel site.  The sale of Homeaway would allow investors and owners of the AWAY stock to cash in.  Homeaway customers are not amused.

And share prices recently dropped to under $29, from a 52 week high of over $45.

Doug Coates

Friday, November 7, 2014

VRs Prepare to Fight New Regulations in Lincoln City, Oregon

After 3 years of debate over the role of vacation rentals in the small coastal town of Lincoln City, Oregon, a mayor who leaves office in 7 weeks is expected to push through a series of 3 new ordinances that re-interpret older laws and impose severe restrictions on the area's short term rentals.

Under the leadership of the Oregon Association of Vacation Rentals and the Lincoln City Vacation Home Association, near unanimous opposition to the new laws has been repeatedly stated by businesses, local citizens, and short term rental owners, at public meetings over those 3 years, but city officials are still pushing ahead with the new laws.

The Oregon city was described as the poster child for bad VR regulation at a national conference a few years ago.

At the November 3rd election, a new "pro-VR" mayor was elected, and some city council members who appear to be open minded about short-term rentals were also elected, but the current administration does not intend to wait 7 weeks for the new officials to take office.

The city's lawyer has threatened to start fining vacation rentals if they oppose the law, even those the VRs are were issued a permit to operate by the city.  How can a city authorized people to do something, then fine them for doing it?

VR owners and VR related businesses are well on their way to meeting a goal of $100,000 in their legal fund to fight the laws after they are passed.

Watch this space for updates.

Doug Coates

Saturday, March 15, 2014

AirBnB Opens new office in Portland, Oregon

Earlier today, Mayor Charlie Hales of Portland, Oregon, delivered his State of the City address and announced that Airbnb will open its North American operational headquarters in Portland. Airbnb got started in San Francisco, and plans to keep its main offices there, but is growing fast and chose Portland for its expansion.
Portland is a leader in the sharing economy and the move is a result of collaboration between Oregon's Governor John Kitzhaber, Portland Mayor Hales and the City of Portland.
Over the coming months, Airbnb will hire approximately 160 employees in Portland.  Customer experience, management, training, IT, and facilities staff will open the Portland office later this summer.

Thursday, March 13, 2014

Studies Find Short-Term Rentals Bring Enormous Economic Benefits to Chicago, St. Joseph, Michigan

(Republished from an email released by the Short Term Rental Advocacy Committee)

Studies Find Short-Term Rentals Bring Enormous Economic Benefits to Chicago, St. Joseph, Michigan

Last year, short-term rentals in Chicago generated $108 million in overall economic activity and created 920 jobs; $24 million in overall economic activity and 300 jobs in St. Joseph

In the Lake Michigan hamlet of St. Joseph, Mich. and Chicago—America’s third largest city—residents and local tourism economies are enjoying the enormous economic benefits of short-term rentals, according to two economic studies commissioned by the Short Term Rental Advocacy Center (STRAC).

In Chicago, short-term rentals generated $108 million in overall economic activity in 2013 with $70.6 million of that activity attributable to visitor spending on short-term rentals and related on food, recreation, transportation and other expenses, according to the study by TXP Inc. For every $100 a traveler spent on short-term rentals, they spent an additional $69 on food, $24 on transportation, $59 on shopping, and $48 on arts, entertainment and recreational activities.

The study also found short-term rental activity created 920 local jobs, primarily in restaurants and bars and in the arts, entertainment and recreation sectors. Beyond the $70.6 million in direct and indirect spending on short-term rentals, that activity has a multiplying effect on the local economy in the form of increased wages, which are spent in those local communities.

TXP’s study looked at short-term rental listings of Airbnb, HomeAway and FlipKey in Chicago. Those companies had a combined 171,000 nights booked in Chicago and surrounding Cook County in 2013 across 3,620 properties. While the average visitor stays in Chicago 2.4 nights, short-term renters stayed an average of 4.5 nights and had an average party of 2.5 people. Those figures, coupled with an all-time high hotel revenue and occupancy rate last year, suggest short-term rentals address a different market segment than traditional lodging options.

“Chicago’s hundreds of events, unique attractions, vibrant culture and nightlife attract a range of visitors with diverse interests and budgets,” said Jon Hockenyos, president of TXP and an economist that has conducted dozens and dozens of local economic impact studies. “While the number of short-term rentals pale in comparison to the number of hotel rooms and overall housing stock, short-term rentals provide important variety to visitors and play a key role in the future of Chicago’s future tourism growth.” 

St. Joseph

While the Lake Michigan destination of St. Joseph, Mich. has a population of just 8,311 compared to the 2.7 million residents of Chicago, its residents are nonetheless enjoying the benefits of short-term rentals.

According to a separate study conducted by TXP, an Austin, Tex.-based economic analysis firm, St. Joseph and the surrounding Berrien County experienced $24 million in overall economic impact from short-term rentals in 2013. Visitor spending on short-term rentals and related activities amounted to $22.2 million and supported 300 jobs. The higher overall economic impact figure reflects the multiplying effect short-term rental spending in the local economy, namely in the form of increased wages.

“Like in Chicago, short-term rentals in St. Joseph provide much needed diversity to visitor housing options and are key to the continued growth of St. Joseph’s tourism economy,” Hockenyos said.

Short Term Rental Advocacy Center member companies—Airbnb, HomeAway and FlipKey—listed in 695 properties on its sites, leading to 18,000 nights booked last year. This data also revealed that the average short-term rental party size was 5.7 people staying an average of 3.3 nights. Those figures, rising hotel occupancy rates and hotel revenue suggest that short-term rentals and traditional lodging sources are not in conflict with one another.

"Tourism is very important to St. Joseph and Southwestern Michigan. Visitors spend money at restaurants and they shop at our local stores thereby strengthening our local economy,” said Torrence Moore, a local homeowner who is part of a local group advocating for fair and reasonable regulations. Last year, the city passed a restrictive measure to forbid new short-term rentals in residential neighborhoods. 

"St. Joseph needs to have an adequate number of housing options to meet the demand from families coming to St. Joseph,” Moore added. "Currently there are only two hotels in downtown St. Joseph, and short-term rentals offer a solution. However, we risk losing the strong economic benefits of short-term rentals and families will choose surrounding towns with good, fair and responsible short-term rental policies. We believe there’s a better solution for regulating short-term rentals in St. Joseph."

The Short Term Rental Advocacy Center commissioned TXP to assess the economic impacts of short-term rentals attributable to STRAC members’ customers (termed “participating short term rentals” in the reports) in St. Joseph, Mich. and Chicago. The reports capture visitors spending on short-term rentals in those markets, as well as related spending and the broader implications on those economies, but not necessarily all short-term rentals.

Thursday, July 18, 2013

HomeAway Acquires Travelmob

Homeaway.Com announced this week they are acquiring a majority stake in Travelmob - a relatively new listing site for vacation rentals in the Asian-Pacific region.  This will be Homeaway's first major incursion into that part of the world.

Travelmob will continue to operate as a seperate entity after accepting Homeaway's all cash offer, at least for a while.  History has shown that many Homeaway acquisitions are eventually merged into the mother ship.

Travelmob was founded last year.  It supports 13 currencies and operates in 8 different languages.

Homeaway CEO Brian Sharples said recently "Economists note over 100 million people will enter the Asian middle class each of the next several years, and Asia will have an increasing influence over the world's economic growth. We believe this will have significant implications for not only travel but also for the purchase of homes, both of which drive HomeAway's growth. We view Asia as a region where we can build tremendous incremental value for our shareholders and existing customers over the next several years.

"Given this opportunity, we're excited to work with the experienced travelmob team to address today's market needs in Asia — where vacation rentals are mostly new, but alternative accommodations are not — to build scale and accelerate the development of the vacation rental industry."

Last year Homeaway took partial ownership of Tujia.Com - the top provider of short term rental homes in China, and signed another agreement with Wego - a travel search website based in Singapore.

Posting Public Contact Information for your Vacation Rental

A reader on this site recently asked about the idea of posting contact information outside of vacation rentals so that the public has a phone number to call in an emergency or when there is any other type of problem.

Many local VR laws that regulate vacation rentals require posting a contact phone number on the outside of the house that can be seen from the street.  Such requirements often raise concerns that posting such information identifies the home as a vacation rental that may be vacant at times, and  thus increases the likelihood that VRs will be broken into.

I haven't seen any data that backs up that concern, at least not so far.

An alternative approach is to notify neighbors who to contact in an emergency or a disturbance at a VR.  The problem with this approach is that neighbors lose the information and still don't have a number to call when they need it.

The best alternative I have seen, when VRs are registered in the community, is for a community to set up just one phone number for everyone to call when there is a problem at a VR, and then let the people who answer the phone evaluate the problem and decide who to contact or what action to take.  

Calls would then be routed to the police, the fire department or the property manager, as needed.

This works well in jurisdictions where vacation rentals are recognized for the contributions they make to their communities, and "regulation" is about making VRs better neighbors and stronger contributors.

Doug Coates

Monday, July 1, 2013

A Soldier Speaks Up about Vacation Rental Regulation

Here is a letter written by a member two US Soldiers about how increased regulation of vacation rentals in Lincoln City, Oregon will impact them.  It raises many interesting questions about our country and what is "appropriate regulation".

Mayor Anderson,

My name is <name withheld*> and I live in El Paso, TX (Fort Bliss), Seoul, South Korea (Camp Casey) and sometimes Baghdad, Iraq (Camp Victory), soon my wife will be living in Kabul, Afghanistan (September '13 to Aug '14), but our most favorite place to live is Lincoln City, Oregon. 

In fact over the past 10 years we enjoyed many vacations to Lincoln City in between our tours overseas, that we made the decision to save every dime we earned while deployed in Operation Iraqi Freedom, and Enduring Freedom to purchase our dream retirement home in Lincoln City. After years of saving, our dream came true in May 2013. Although we have not had a chance to spend a single night in our dream home as of yet we expect to have the opportunity to do so next month as a celebration just days before my wife gets on a plane to Afghanistan.

Liz and I are combat veterans and your neighbors. We have been unable to take part in your discussions regarding vacation dwellings in Lincoln City due to our Active duty U.S. Army status. After reviewing what we could find online posted about the issue, we are in shock and scared about the decision you are about to make with home use restrictions.

It takes a lot of courage to make such a dramatic decision that will affect the lives of people and your neighbors. Apparently, my definition of courage differs from those who want to restrict the use of my dream home. If this restriction on use passes, it will become extremely difficult for us to fund the home improvements, landscaping improvements and even pay the mortgage as we intended with supplemental rental income. I would never want to be a supporter of such a decision that would affect my neighbors so dramatically as this will affect us.

I understand that my neighborhood (Taft) has families that want to restrict vacation homes due to many reasons, however it is not unanimous. Please do not allow any type of mafia style "who you know" make decisions that are good for them, without completely understanding the ramifications that will occur on the rest of us. If the issue is noise then enforce the noise ordinance. If the issue is parking then tow/ticket the cars. Don't take the course of action that provides hardship on families and dreams.

My screensaver on my Army computer is a picture of Lincoln City that has traveled around the world twice with me. As I went on missions through  neighborhoods ripe with tyranny and dictatorships where the government restricted what people could do with their land, I always thought about the greatest place on earth and how great of a place it is going to be for our retirement. Please don't make Lincoln City a place that also restricts people from having options, but rather enforce good order and discipline as it is written in current laws.

Over the history of the United States and treatment of Soldiers, there has been many issues with regard to protections and treatment when the Service member is not present to represent themselves/ take care of property etc... this became such a problem that congress created title 10 of U.S. Code and specifically the Soldiers and Sailors Civil Relief Act. 

I am not a lawyer, so I cannot guess to how this applies to the specific restrictions you are proposing on our home while we are deployed, but I can say that the spirit of the law does represent itself here. I challenge all who want to restrict the use of my home to really think about the spirit of protecting Soldiers during wartime and stand up for my right to use my home as it is needed. If we are unable to rent our home during a combat deployment protecting rights to freedom, I hope the streets are clear of cars, the neighbors don't play music too loudly and my neighbors view of the pacific is nothing short of breathtaking.
* the name of the soldier was withheld to respect his privacy, but may be released to appropriate parties upon request.

Friday, June 28, 2013


According to a poll conducted by the Research Now, found that vacation rentals are strongly favored as a lodging option by Americans.  Some key stats from the poll:
  • 28 percent of respondents saying they or a family member have used a short-term rental in the past two years
  • 40 percent of respondents are attracted to the space and amenities of short-term rentals and the ability to bring their families
  • Thirty-one percent said they like the affordability of short-term rentals and to a lesser extent the ability to cook meals (19 percent) and ability to live like a local in different neighborhoods (11 percent).
  • 90 percent of respondents strongly or somewhat agree that short-term rentals bring meaningful tourism and tax dollars to local communities across the country.
  • 84 percent strongly or somewhat agree that families should be free to occasionally rent their homes short-term
  • Americans prefer a fair and reasonable approach to regulating short-term rentals
Read more about the poll here.

Sunday, June 23, 2013

The Case for *Real* Vacation Rental Insurance

Like many VR owners, when I bought my first short term rental home in 2002 I got a traditional mortgage and traditional home insurance.  I figured that the insurance would cover us for most problems (house fires, etc.) and I had a good umbrella liability policy that I thought would cover me in the event of a lawsuit.

In recent years I've learned that my insurance policy is not adequate to cover a house that is rented 70% of the time, near a fault line, sometimes subject to 100 mph winds, on a cliff, and typically has 30 to 40 different families living in it over the course of a year.

What is wrong with my traditional home insurance policy? Several things:
  • almost all home insurance policies deny payment for any loss associated with running a business in a home.  Although renting a few homes is not considered a business in the traditional sense, or for zoning purposes -- it is likely that short term rental activity would be considered to be a business by an insurance company.
  • vacation rentals often have special amenities -- hot tubs, swimming pools, boat docks, stairs down the sides of cliffs -- that offer risks to guests that most homes don't.  Traditional policies may balk at paying a claim by a guest that is injured while using such amenities, and umbrella liability policies may not cover you either.
  • many of us make substantial investments in our vacation rental homes that are associate with short term rental usage, and depend on the income the home produces to pay for such amenities.  What happens when the income stops due to a fire or any other loss event.  Traditional home insurance policies don't cover loss of income from your home.  Policies designed for short term rentals will often offer this coverage.
  • If a guest steals a TV, are you covered.  Under a traditional home policy - probably not.  You need a policy that is designed to cover this type of loss.
These are just some examples.  If you have traditional home insurance, ask your agent if coverage for short term rental usage is explicitly stated in the policy.  Ask your agent if you are cover for loss of income, or theft by a guest, or any  of the other exposures you might have that are unique to short term rental usage.

Then talk to a company that offers policies designed for vacation rentals.  You'll see a difference.

Saturday, June 22, 2013

VRRegs Readership Continues to Climb

Readership has been climbing steadily at the VR Regulations blog since its was founded in the fall of 2010.  We are now at well over 3000 readers a month, and increasing steadily as Vacation Rental regulation issues arise in more and more communities....

Bandon, Oregon Planning Commission Seeks to Allow More VRs

On the south coast of Oregon, while city leaders on other parts of the coast are arguing about how many new restrictions to add to vacation rental homes, the Bandon Planning Commission is holding hearings about expanding the areas in the city where Vacation Rentals would be allowed.

Proposed regulations would allow short term rentals in CD-3, CD-R1 and CD-R2 zones, and eliminate limits on the number of VRs in zones where VRs are allowed.

According to City Planner Michelle Hampton, “The commission determined that there quite possibly could be a need for more VRDs and this is the direction they wanted to go."

A public hearing will be held at 7pm in the City Council Chambers regarding the proposed amendments.

For more information, click here.

Friday, June 21, 2013

Vacation rentals provide income, opportunity for Missoula-area property owners

June 17, 2013 1:17 pm  •  

The top-floor Wilma building condominium overlooking the corner of Front Street and Higgins Avenue puts guests almost eye level with the “M” atop Mount Sentinel and offers a bird’s eye look at the nearby Florence Hotel before the view opens up toward Missoula’s sweeping North Hills.
“You watch the river and town go by and nobody even knows you’re here,” owner Ross Peterson said of the view.
Inside, dark bamboo floors and wooden accents made from reclaimed lumber rescued from an old Anaconda train depot give the space a “Montana modern” feel.
Peterson bought the studio space inside the historic Wilma building five years ago and remodeled it as a vacation rental.
His “Wilma Condo” is a deluxe slice of Missoula that’s become a popular spot for travelers coming to town looking for an urban spot where they can stay while they play.
Travelers are turning more and more to the Internet to find alternative accommodations that offer a variety of amenities, and Peterson is one of an increasing number of property owners around Missoula who have found a niche renting their homes or condos to short-term visitors.
A quick “vacation rentals in Missoula” search online shows a growing variety of options. There’s everything from a Slant Street bungalow, to an entire set of Wilma condos and the more traditional lodge-like spaces that include river frontage but are close to town. Rates run the gamut and often include nightly or weekly pricing options.

Thursday, June 20, 2013

Oregon Bill HB2656 Seeks to Capture More Lodging Taxes

The Oregon state senate will soon be considering a bill that will attempt to capture more lodging taxes from operators of all types of lodging facilities.  Estimates are that an additional $600,000 would be captured if the bill passes, and the money would go into state coffers to be used for tourism development.

Opponents of the bill say it is poorly written, hard to interpret, and designed to favor large out of state hotel chains, to the detriment of those who own vacation rentals, B&Bs and small local hotels.

  • One opponent pointed out that state money spent to encourage tourism always directs potential tourists to large hotels and resorts.  
  • Another points out that every dollar of additional taxes collected will eventually come out of the pockets of those who own small lodging operations in the state.  
  • Yet another is concerned that the bill will hurt tourism in the many small villages in the state that depend on tourists as a primary source of tax revenues and an important driver for the local economy.
People who oppose the bill are being asked to contact state senators.  To find out more about this bill, read this information from the Oregon Association of Vacation Rentals.

Doug Coates

AirBnB style Short Term Rental Operators form Creative Partnerships with Landlords

In a new twist on the AirBnB model of short term rental operations - people who rent their apartments out on a short term basis are now starting to partner with their landlords to create situations where everybody wins.

Partnerships come in many forms.
  • One tenant agreed to a higher rental rate in exchange for being able to list an apartment.
  • Another shares a percentage of the profits from renting.
  • Some tenants provide their landlords with written notice that they will have a guest.
  • Some purchase extra liability insurance to protect themselves and the landlord.
  • Some pay an additional security deposit.
  • and some even go so far as to let the landlord pre-screen short term guests.
To find out more, including sample language for these types of written agreements, read Six Lease Agreement Amendments to Make AirBnB Work For You on the Software Advice blog.  The blog also offers useful information on Rental Property Software products.

Doug Coates

Tuesday, May 28, 2013

Court Declares "You Must Mingle With Your Guests"

Discussions are ongoing in New York City concerning the legality of Vacation Rentals, and the local court system is tying itself in knots trying to define what constitutes an "illegal hotel".  Local law says that boarders or roomers may rent for less than thirty days if they "live in the household of the permanent occupants."

In a ruling this month Judge Morrick tried to justify fines of several thousand dollars that were levied upon one host for operating an illegal hotel when he hosted a woman in his apartment.  The host was Nigel Warren, and he has been fighting court rulings since fines were levied on him last year for renting out a room through AirBnB while he was out of town, even though his regular roommate continued to occupy the premises.

The judge felt that Nigel's guest did not "live in the household of the permanent occupants", because she did not intend to have any relationship with the permanent occupants.  The judge says that occupants must "mingle" and intend to connect in meaningful ways in order for the lodging arrangement to be legal. The judge did not specify exactly how intimate the relationship must be in order to qualify under his ruling.

To our knowledge, no judge has ever ruled that an apartment was illegally occupied because occupants did not have "meaningful relationships".

Read the Judge's Ruling here.
Comments by Protect Vacation Rentals
Article by the Valley Wag

Thursday, May 23, 2013

NYC Mayoral Candidates Discuss Vacation Rentals, the Ban, and Economic Development

On April 26, 2013, at the Mayoral Forum on Future of NYC’s Entrepreneurial Economy, candidates discussed a variety of issues that impact New York City's economy.  At one point the candidates were asked their opinion about vacation rentals and the local vacation rental ban.

Here is a transcript of that conversation...

        Ben Smith, Editor in Chief of Buzzfeed

        Saul Albanese, former City Council member
        Bill de Blasio, Public Advocate
        Adolfo Carrión, former Bronx Borough President
        John Liu, NYC Comptroller
        Christine Quinn, City Council Speaker
        Bill Thompson, former NYC Comptroller

Ben Smith: To bring it back to some of those companies, what Fred Wilson was talking about this morning, something a lot of tech entrepreneurs find incomprehensible- Are regulations that get in the way of, I guess Airbnb was the business he mentioned, he sort of vilified the hotel lobby, but I think actually, critically for the folks on this stage, he should probably be vilifying the hotel workers union, who is probably somebody you guys talk to more, I mean should, and I wonder in the specific case of Airbnb, should, you know should they be allowed, which is technically illegal in the city, despite being huge and despite providing a kind of affordable rental that you know you can’t get from hotel, Comptroller Liu- do you think they should be allowed to kind of dive into this market, should the government be putting up barriers?

John Liu: Should who? You’re saying…

Ben Smith: The company Airbnb- I don’t know does anybody want to jump in on this who had stronger feelings on Airbnb?

Bill de Blasio: Look I think it is not a question in that case of just access to a service I think this is a different matter when you talk about the fact that we have laws to ensure the quality of any habitation, whether it’s residential or it’s a hotel habitation, the problem with mixing the 2 in an open market is you are exposing folks who live in a building who you know it may be a rental it may be a co-op whatever it is, who live by a set of ground rules about safety and security to folks who are not part of that system and may be only passing through for a few days and that’s not what the residents of the building signed up for, and that’s the court issue.

Christine Quinn: Ben, let me just jump in here, I mean the Public Advocate [Bill de Blasio] is right, you know the issue of Airbnb isn’t really one about technology at its core, I mean we are having across this city, loss of affordable rental units to landlords who are, and this is not necessarily the folks who are on Airbnb, but this is happening simultaneously, to landlords who are converting their residential units into tourist hotels, the night of Hurricane Sandy, there was a building collapse on 8th Avenue in Chelsea, every person who was in the building that night was a tourist, all who came to NYC through one travel company, now that building wasn’t up to code, in part I think because the landlord didn’t have the same urgency because people weren’t living there, two, it was 15 or 20 units of affordable housing that were gone in Chelsea, that’s not allowed, by law you are not allowed to take rental apartments and make them hotel units, now the issue.

Ben Smith: right but the issue is, this is an incredibly popular company and service and operated globally.

Christine Quinn: Wait, wait, wait, but the issue we should take from this isn’t that laws on housing and safety get trumped by the potential of entrepreneurship , but what we do need to take from this is that we need to add tech entrepreneurs more into the conversation about government, because had Airbnb entered the conversation earlier, there might have been different relief that could be offered to them in Albany, and in fact, my office is in conversation with them now to see if there is some way to thread the needle differently for them and others, so I think what we have to take from this is not a good idea overrides fundamental laws of NY but we need to have this sector more front and center in the conversations as other stake holders have been.

Ben Smith: Mr. Carrion, I mean this isn’t, it’s not like this is a theoretical question, I mean Airbnb is all over the place, people use it all the time, I mean, can the city catch up?

Adolfo Carrión: I’m not entirely convinced it is a gigantic issue, it is an important issue though, but it speaks to something else that is happening around the world and that we have to catch up with here in NYC, my daughter is doing her Spring Semester Junior year in Barcelona, so we went to visit her, and guess what we used a service to find a room, to find an affordable room in a European city and if you’re buying hotel space in any city, any major city in the world, you know one- it’s priced very competitively, so it speaks to some larger issues, we have a very high occupancy rate or a very low vacancy rate of hotel rooms in NYC, people want to come here, I think we have to take a public policy posture, we grew to 52 million tourists last year, that industry generates 350,000 jobs, 90,000 of those jobs are in the hotel sector, that sector can continue to grow, we need to figure out ways to make NYC much more user friendly, so that people are not exploiting those opportunities to take a unit that we need for affordable housing for a NY family, and turning it into an unsafe situation and a for profit situation for them, the rules don’t even apply, obviously they are defying every rule, every law, they are making the building unsafe.


Friday, May 17, 2013

Elephants in the Room: Homeaway, Wyndham & Tripadvisor Compete

Many vacation rental owners have been watching nervously as Homeaway.Com has bought up more and more listing sites, listing fees have risen, and more and more of the guest selection and booking process is being handled by outside parties.  In spite of some concerns, Homeaway is a smart company and has done a good job of addressing many of the needs of VR Owners.

Wyndham has also been making acquisitions, and is now seen as a primary competitor to Homeaway.

But there is another elephant in the room.  Trip Advisor continues to buy up listing sites and grow its share of the market.  Trip Advisor's sites get 200 million unique visitors per month, and provide over 100 million commenets and reviews.   They have a presence in 30 countries. With the recent acquisition of Niumba, a VR listing site for Spain, their portfolio of listing and travel related sites now includes:

A New Effort to Tax Vacation Rentals in Oregon - will it happen in your state too?

Oregon state legislators are trying to find a new way to assess taxes on vacation rental activities. Oregon House Bill 2656 would expand and increase taxes on tourism, by attempting to capture tax revenues on special service fees and any other charges associated with booking a hotel room or a vacation rental.

Oregon already has a statewide lodging tax.  Most local communities have lodging taxes too, so tourists often pay between 10% and 15% in lodging taxes when they visit our state.  Lodging taxes are common, but to my knowledge no other state has lodging tax laws that would be as invasive as the laws in Oregon would be if this new bill passes.  If the law passes in Oregon, other states will take notice and this could become a nationwide trend.

The new tax would have immediate impact on vacation rental owners and the businesses that serve rental owners and their guests.
  • If your property is booked through an on-line travel site like AirBnB, Expedia or Homeaway, and you pay the site any fees for handling your booking transaction, the listing site would pay a new tax on those fees, and the tax would be passed through to the property owner.
  • If your property is booked through a local travel agent or a rental property managers and there are any per-booking fees or other charges associated with the booking, the agent or manager would pay a new tax on those special fees, and the tax would likely be passed through to the property owner.
  • If you book your own properties, and there are any special service fees that would not normally be taxed under existing local and state lodging taxes (hot tub usage fees, cleaning reimbursements, etc.), under this new bill a tax might be assessed.
  • Regardless of what your association is with Oregon tourism, the new tax could have negative impacts on vacation rentals, bed & breakfasts and small locally owned hotels, decreasing bookings and interfering with the current economic recovery, especially in small rural communities that depend on tourism.
Some opponents of the bill say it favors large, out of state, corporate hotel chains.  These chains handle most of their bookings internally, so there are no extra fees to tax.

Proponents of this new tax apparently do not realize that online travel sites, property managers and short term rental owners promote Oregon to a world of potential tourists at no charge to the state. In doing this they generate $8.8 billion in spending in the state, help fill the state's tax coffers, bring significant tax revenues to many small communities that desperately need them, and support between 90,000 and 100,000 jobs in the state.

Small lodging operations are a primary driver of tourism into small Oregon towns, and are often one of the 3 largest sectors of local economies that help such towns survive.  Taxes are a fact of life, but lets be smart about what we tax.

It makes no sense to discourage tourism with a new tax, and then turn around and spend millions of dollars promoting the state as a tourist destination.

It makes no sense to lay a new tax in the lap of small business owners statewide who work hard to bring tourism into our communities, while these businesses are struggling to survive, and are already collecting significant tax revenues for local and statement government activities.

Monday, May 13, 2013

VRs Had a $56 Million Impact on San Francisco

According to Forbes Magazine, vacation rental activity originating from the AirBnB listing site alone generate $56 million over the course of a year in San Francisco. The study did not take into account vacation rental activity that originates from other list sites and other sources of vacation rental activity.

The figure breaks down as $12.7 million going to rental owners, and $43.1 million going to area businesses.

The study was conducted by HR&A Advisors, and is based on booking data from June 2011 to May 2012, and an online survey of 928 travelers and 344 hosts.

The study was recently brought to the attention of Aldermen in Evanston, IL, as they consider a move to ban vacation rentals, and weigh the impacts of a ban on local economic activity.

Read Forbes article here.

Read about ongoing discussions about VRs in Evanston here.

Doug Coates

Saturday, May 11, 2013

US Conference of Mayors Supports Vacation Rentals

In June of 2012, the US Conference of Mayors passed the following resolution to show their support for vacation rentals and other small lodging operations:


WHEREAS, communities throughout the United States rely on local hotel taxes to promote travel and tourism and support the local visitors industry; and 

WHEREAS, local hotel taxes often fund convention and visitors bureaus, convention centers, sports arenas and sports teams; and 

WHEREAS, local hotel taxes often support local cultural programs including music, film, gaming, visual arts, dance and more; and

WHEREAS, short-term rental of homes can often be subject to hotel taxes; and 

WHEREAS, short-term rental of homes can provide a flexible housing stock that allows family travelers spending longer periods of time in a community a safe accommodation while contributing to the local economy; and

WHEREAS, short-term rental of homes can provide homeowners an opportunity to hold property as an investment, for a better sales market, or for future planning; and 

WHEREAS, fair regulation of short-term rentals ensures greater compliance and greater receipt of local hotel taxes; and

WHEREAS, regulations of short-term rentals that establish a reliable way for a municipality to identify and contact the short-term rental owner, make the tax collection and remittance obligation clear and treat the short-term rental owner the same as long-term rental owners can achieve the highest level of compliance; and 

WHEREAS, onerous regulations of short-term rentals can drive the industry underground, thus evading local regulations and local hotel taxes;

NOW, THEREFORE, BE IT RESOLVED, that the U.S. Conference of Mayors urges support for economic development opportunities through the visitors industry by encouraging regulations of the short-term rental industry that (1) establish a reliable way for the municipality to identify and contact the short-term rental owner; (2) make the tax collection and remittance obligations clear to the short-term rental owner; and (3) treat short-term rental tenants the same as long-term rental tenants. Regulations that accomplish all three can achieve a high level of compliance, and are highly effective.

Thursday, May 9, 2013

VR Owners Cautiously Exploring AirBnB

There is always a frank discussion going on that the Yahoo vacation rental owners group about issues that VR owners face when dealing with guests, cleaners and the growing vacation rental service industry (listing sites, etc.).

Last week the group turned its attention to the viability of what AirBnB offers for the full time vacation rental owner, ie., those of us to attempt to rent out our homes as much as possible and run our VR operations more like a business than a hobby.

There was no shortage of opinions and concerns.  Here are a few that were repeated by several owners:
  • While many VR listing sites charge an annual fee for the privilege of having your property listed, AirBnB charges no such fee, but charges both the guest and the owner a fee when someone books a property.  Some owners don't like the "pay for the booking" revenue model.
  • AirBnB forces all communications between the owner and the potential guest to go through its web site, in order to maintain control over the booking process so it can collect its booking fees.  As a result the potential guest never gets access to much of the information that an owner would normally provide to a potential guest.  Some owners feel that this is unfair to the guest and interferes with the owner's ability to select the guests that they want.
  • AirBnB attempts to dictate important elements of the rental relationship, taking control of the cancellation terms, the payment schedule and other things that can be important to a VR owner.
I was skeptical about AirBnB at first, and even more skeptical when I looked into signing up and found that their Cancellation Policy options were very limited, totally out of sync with my own policies, and did little to protect me from last minute cancellations that could cost me a few thousand dollars of revenues.

Then I decided that I should try AirBnB with my 3 bedroom home, which is harder to rent than my smaller, less expensive home.  What did I have to lose? A few additional bookings each year on the larger more expensive home would be well worth the set-up time, the compromised cancellation policy, and the small per-booking fees I would have to pay.

I got a few inquiries, but nothing really happened for the better part of a year. Then an occasional booking actually consummated. So far I've had 3 AirBnB bookings on this home, and one that hasn't come yet, and there hasn't been any problem. I believe I have filled in some open dates that I would otherwise not have filled in. 

I agree with comments by several VR owners that AirBnB short-changes the guest, by intentionally interfering with the amount of information they can get from the rental home owner about the property they are thinking of renting. I also agree that their policies interfere with my ability to carefully select my guests.  

Anything that interferes with my ability to select guests carefully also makes it harder for me to be sure my guests won't violate local laws that regulate my rentals, or have a situation that disturbs full-time residents in the area of my homes. AirBnB's intentional interference is understandable, given the way they make their money, but it is a serious flaw, and one that could be overcome by creative thinkers, without compromising their revenue model.

Another serious flaw continues to be the inability to accommodate owner rental policies, in favor of a rigid set of limited policies dictated by AirBnB. Some owner rental policies are well thought out, or are necessary for particular properties, and AirBnB rental policy options can and should be more flexible.

Perhaps the biggest problem is AirBnB's diverse customer base.  Many AirBnB "property owners" are people with an extra room in their home to rent or people who rent their home out when they are out of town -- while others are full time professional VR home rental owners. The same set of AirBnB policies doesn't work well for both groups, but AirBnB doesn't seem to recognize that the owner who rents a dwelling on a full time basis faces different management issues than someone who rents out a room occasionally.

I don't have a problem with reasonable per-booking charges, and actually see this as an advantage when listing with companies that don't provide a large portion of my bookings. For companies that provide a large portion of my bookings, I prefer the annual charge instead of the per-booking charge, for obvious reasons.

I believe that the per-booking revenue model will become the norm over the next few years. Homeaway.Com is already moving in that direction, its an easier sell for the listing site, and an easier buy for many VR owners. 
As long as the per-booking charges are reasonable, this change will be tolerable, if not advantageous. If listing site owners or their investors get greedy and start upping the fees, then it will be up to VR owners to find or create alternatives to this revenue model.

Overall, I think that AirBnB offers something that most other listing sites don't offer yet -- they are bridging the gap between the traditional listing site model and the sharing economy
.  For those of us who rent our homes year-round, AirBnB offers important opportunities to fill vacant dates, but is unlikely to be seen as a primary source of bookings.  As they perfect their operations and build their understanding of the needs of those renting their homes year-round, this may change.

Doug Coates

Sunday, April 21, 2013

New Twists on the idea of Short Term Rentals

The concept of lending out a room or a cottage that you don't need at the time, has been around for centuries.  Even in the middle ages, a weary traveler would arrive in a small hamlet where there was no inn, and find that locals would share a room or a spare cottage for a modest fee or trade.  A century ago trips to the coast from inland cities were common pursuits, and people were able to rent cottages and homes during their stay.

The concept has grown with the emergence of the internet and recent economic changes.  Venture capitalists, entrepreneurs, and existing businesses have noticed.  New businesses have formed, and existing businesses have made changes to accommodate the activity. Larger new companies like HomeAway.Com and AirBnB have been very successful.  Some of these businesses are now on the NY Stock Exchange.

Billions of dollars changes hands every year as a result of short term rental activity - guests pay for their lodging and patronize local restaurants and businesses - owners pay local businesses for supplies, management, cleaning and maintenance services, and taxes are collected by local communities.  Many more billions are tied up in rental home real estate, and vacation rental activity has become a major driver for the real estate business in many small communities.

Now, with the emergence of internet-driven social networks, the sharing economy and peer marketing, the short term rental sector is evolving again.  A new company called SpinLister now specializes in peer to peer bike rental in New York City.  bnbBoat.Com will soon offer listing services for owners of Yachts and Boats who are willing to rent them out by the hour, the day or the week.

The Economist reports that everything from cars to surfboards to saxophones is being shared using this model.

The peer to peer economy is estimated to be directly involved in $26 billion of transactions each year, and if we count the value of businesses that serve this sector of the economy, and the value of assets that are shared through this sector of the economy, you start to realize that this part of our economy can not be ignored.  Many destinations communities find that short term rentals are one of the top 3 drivers of their local economy.

Collaborative consumption is another name for it, and its a good thing.  Owners make money from under-used assets.  Renters get to use assets that they otherwise would not have access to.  The personalized nature of the service makes it fun for everyone.  And some people point out that fewer resources will be tied up in the production of more homes and cars and other assets if people can share what we already have.

Its an old idea, with some new twists!

Doug Coates

Thursday, April 18, 2013

Vacation Rental Owners and AirBnB offer help to those affected by the Boston Marathon bombing.

In an effort to help in the aftermath of the Boston Marathon bombing, AirBnB is waiving transaction fees and some Boston area vacation rental homes are offering free or reduced cost lodging.  Traditionally, larger listing sites like AirBnB and HomeAway.Com step in and try to help in times of crisis.   And many many owners of vacation rental homes have contributed lodging to help victims of recent tragedies.

For more info on AirBnB assistance, go to

Doug Coates

Tuesday, April 9, 2013

Homeaway Expands Again - 3 New Partnerships with Timeshare Industry

Homeaway.Com announced today the formation of partnerships with 2 resort companies and an online reservation service that will allow Homeaway to direct prospective guests to available Time Share properties, in addition to the 700,000 homes that Homeaway also lists.

By expanding the available inventory of properties that Homeaway can rent out, the partnerships should result in increased revenues for Homeaway -- furthering its dominant position in the VR marketplace.

The increase in rental inventory at Homeaway also results in increased competition between VR home owners, and thus may decrease revenues to individual VR home owners -- especially those in areas where there is a large inventory of unused Time Share properties available.

The move by Homeaway also dilutes the uniqueness of the offerings by traditional vacation rental owners.  Many VR owners offer personalized services and perks when we rent out our homes.

I'll never forget the VR owner who asked the ages of my children when I rented their home, and had age-appropriate treats and toys for the kids when we arrived.  The kids have never forgotten either.

The guest who rents a Time Share that happens to be vacant is less like to get this kind of personalized attention.


Doug Coates

Wednesday, January 9, 2013

Wyndham is Buying Up Vacation Rental Companies

Wyndam announced last week the acquisition of 3 large vacation rental companies - Kaiser Realty in Alabama, Oceana Resorts in South Carolina, and the Cumbrian Cottages in the UK.
Last September we announced Wyndham intention to become the major player in the vacation rental home market in this popular article: Wyndam Hotel Chain Competes Directly with Privately Owned Vacation Rentals. The latest acquistions are part of their aggressive growth strategy.

Geoff Ballotti, president and CEO, Wyndham Exchange & Rentals, said, “The acquisition of Oceana, Kaiser and Cumbrian Cottages significantly enhances the leisure accommodations we offer in popular vacation destinations.”

Wyndham Worldwide’s Bob Milne and Kaiser Realty’s Glen Kaiser currently serve on the board of directors for theVacation Rental Managers Association (VRMA).

Wyndham promotes itself as "the world's largest professionally managed vacation rental business".  The company now includes over 100,000 properties across 500 destinations.

Everyone should be paying attention to what Wyndham is doing.

Doug Coates