The Role of VRs

Successful Integration of 
Vacation Rentals Into Communities
by Doug Coates
North American Association of Vacation Rentals
October 2011

Today's vacation rentals operations are part of a century’s old world-wide tradition of renting out apartments, cottages and homes on a short term basis to families, couples and business travelers. They are currently the foundation of a world-wide business sector that provides a variety of services and includes billions of dollars of economic activity, even though most vacation rental operations are not profit-making businesses themselves. Due to changing social and economic conditions, and changing travel habits, vacation rental operations are becoming more visible to the communities that host them, especially in the United States.

Operating a vacation rental is a legitimate way for an owner to invest money, reduce carrying costs of a second home, plan for eventual retirement, attempt to hold on to a family asset in troubled times, and address other personal needs. Many owners also operate vacation rentals because they are committed to the area that the home is in, because they love sharing the home and the location with others, or because they enjoy restoring and maintaining homes.

Vacation rental operations make important contributions to the communities that host them. These contributions are often completely in line with local community efforts to attract investment funds, increase tourism, develop the local economy, create year-round jobs and minimize impacts of tourism on the local community and the local environment.

Vacation rental operations also can have negative impacts on the communities that host them. These can include parking problems, noise and parties, and trash and litter problems. Some of these problems also occur at full time residences, longer-term rental homes and other types of lodging operations, but are noticed more when they occur at a vacation rental.

Vacation rental operations also face perception problems. Some would say that they “unfairly compete with legitimate lodging businesses” - implying that vacation rental ownership is an illegitimate activity. Others describe them as “illegal businesses that operate in residential zones”. Others might suggest that they are investments owned by wealthy out-of-towners who don’t care about local community residents, issues and laws. Others might say that they are primarily used by partiers and drug addicts.

As a result, vacation rentals are faced with attempts to regulate their operations -- by lodging industries that compete with vacation rentals, by ordinary citizens, and by local legislators. Proponents of new regulation raise a wide range of issues, some of which are legitimate and some of which are not. Proponents propose a wide range of solutions, ranging from reasonable attempts to assure guest safety and minimize community impacts, to unreasonable attempts to completely ban all types of vacation rental operations, with no consideration of the potential impacts on the owners or the community.

There is no uniform approach to regulation of vacation rentals. Some communities deal with vacation rental operations primarily as a zoning issue, while others approach the issue through building codes, others deal with it as a business licensing issue and still others deal with it as a public nuisance issue. Its not uncommon for communities to enact retroactive regulations after a family has committed substantial resources to developing a vacation rental in the community.

Vacation rental owners and their representatives have a responsibility to cooperate with government and community groups to address legitimate concerns and problems caused by the impacts of vacation rentals on their host communities. They also have a responsibility to manage their operations in ways that minimize impacts on the host communities.

We believe that appropriate regulation based on real, documented issues will benefit all parties. Vacation rental owners and representatives have a right to actively participate in discussions about appropriate operational and regulatory practices for VRs. They also have a substantial amount of information and expertise that regulatory bodies should be considering when crafting new laws. They also have rights that will be impacted if bad regulations are crafted, and a lot to lose financially and otherwise if they can't continue to operate. 

The most important right that is impacted by badly designed vacation rental laws is embodied in the US Constitution and many state laws, which say that the government can not take away property or decrease the value of property without good reason and fair compensation to the owners.

We believe that vacation rental owners and managers should form local and regional organizations for the purpose of improving the way they operate, mitigating impacts, and dialoging with their host community about benefits and issues associated with vacation rental operations.

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. Our organization is founded to encourage this type of collaboration.



  1. New Law in California

  2. I like how you look at both sides of the issue. I find people get very fanatic about blocking most rentals or allowing all.

  3. VHR's in residential districts will bring both owners problems. You'll be fighting with your neighbors as long as you rent the property out in their neighborhood. There are better investment opportunities out there.

    1. The value of a vacation rental as an investment varies depending on the area, the home, and the situation of the homeowner. Investment potential is often not the main reason that someone buys a VR.

  4. Now a day's vacation rental seems to be a good business for just renting their homes and condos for family or couples, they can make the most amount of money by using this strategy because lots of people are preferring vacation rentals during their holidays.
    Yvonne Don


Thoughtful comments are welcome, whether you are in favor of vacation rentals or concerned about the impacts of VRs on your community. Comments that contain advertising, including ads for properties, will be deleted.