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  • Houston Implements Comprehensive Short-Term Rental Ordinance: Balancing Growth and Neighborhood Concerns

    Houston Implements Comprehensive Short-Term Rental Ordinance: Balancing Growth and Neighborhood Concerns

    Houston, Texas, has officially entered the arena of comprehensive short-term rental (STR) regulation. On April 16, 2025, the City Council unanimously passed a new ordinance aimed squarely at mitigating the negative externalities often associated with STRs, particularly disruptive “party houses,” while establishing a clear framework for operators. This move culminates a period of deliberation and marks a significant step for a major city previously lacking such specific oversight.

    Establishing the Ground Rules: Registration and Operation

    The ordinance introduces a mandatory registration system, requiring operators to obtain an annual certificate for each STR unit.

    • Timeline: Applications open on August 1, 2025, with the ordinance taking full effect on January 1, 2026.
    • Cost: The annual registration fee is set at $275 per unit.
    • Scope: The rules apply to an estimated 8,500 STRs operating within Houston city limits.

    Beyond registration, the ordinance mandates adherence to several operational standards. Operators must:

    1. Comply with Existing Codes: Ensure properties meet noise, waste management, building safety, and fire safety standards.
    2. Provide Emergency Contact: Designate a contact person available 24/7 who can respond promptly to issues arising at the property.
    3. Remit Taxes: Pay the requisite Hotel Occupancy Taxes (HOT) (taxes levied on sleeping accommodations, akin to those paid by traditional hotels).
    4. Undergo Training: Complete annual training focused on identifying and reporting human trafficking.
    5. Prohibit Event Advertising: Explicitly forbid marketing STR properties as venues for parties or large events.

    Crucially, the ordinance leverages the cooperation of hosting platforms like Airbnb and Vrbo. These platforms will be required to remove listings for unregistered properties within 10 days of receiving notification from the city, adding a significant layer of enforcement capability.

    Enforcement Mechanisms: Addressing Violations

    Recognizing that rules without enforcement are often ineffective, the Houston ordinance includes specific mechanisms for addressing non-compliance. Registration certificates can be revoked for several reasons, including:

    • Multiple violations of the sound ordinance.
    • Serious criminal convictions involving guests at the property (e.g., disorderly conduct, prostitution, reckless firearm discharge).
    • Failure to adhere to other provisions of the ordinance or relevant city codes.

    The city has also implemented measures to target problematic operators managing multiple properties:

    • Portfolio Revocation: An owner or operator accumulating three or more certificate revocations across their entire portfolio within a two-year period may have all their STR registration certificates revoked city-wide.
    • Building-Specific Revocation: Within a single multifamily building, if 25% or more of an owner/operator’s STR certificates are revoked, the city reserves the right to revoke the remaining certificates held by that operator in that specific building.

    To manage complaints and monitor compliance, Houston has contracted with Host Compliance, a service provided by Granicus, indicating an investment in technological solutions for oversight.

    Initial Reactions and Lingering Questions

    The ordinance received public praise from Expedia Group (parent company of Vrbo), which lauded the collaborative process and positioned the outcome as a potential model for other cities. This suggests that at least some segments of the industry see value in clear, albeit potentially strict, regulatory frameworks.

    However, concerns remain. Some operators worry about the breadth of host liability for guest actions and the potential for subjective interpretation of offenses like “disorderly conduct” leading to revocation. Furthermore, despite the unanimous vote, several council members expressed reservations about the city’s practical ability to enforce the new rules effectively, citing historical challenges in responding to complaints even before this comprehensive system was in place. City officials have acknowledged that this ordinance represents a starting point, subject to potential amendments as implementation proceeds and data is gathered.

    Ultimately, Houston’s ordinance represents a concerted local effort to harness the economic benefits of STRs while actively managing their impact on residential communities. Its success will likely hinge on the city’s commitment and capacity for consistent enforcement.

    Stay up to date on the changing STR regulations.

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  • Airbnb Shows You the Full Price Now – But Who Really Pays the Price?

    Airbnb Shows You the Full Price Now – But Who Really Pays the Price?

    Hello, I’m Meredith Lane, digging into how the short-term rental world affects you and your neighborhood. This week, a big change hit Airbnb. It might look like a win for travelers, but let’s pull back the curtain.

    What’s New? Seeing the Real Cost Upfront

    Starting April 21, 2025, Airbnb changed how you see prices. Everywhere in the world, when you search for a place, you’ll now see the total price right away. This includes the nightly rate, those often-surprising cleaning fees, and Airbnb’s own service fee. Just remember, taxes still get added at the very end, before you pay.

    For years, you might have clicked on a rental thinking it was a bargain, only to find the price jump way up at checkout because of extra fees. Airbnb had an option to show the total price before, but now it’s the standard way for everyone, everywhere. No more toggle switch.

    Why Did Airbnb Do This? Pressure and Problems

    So, why the change now? Well, it wasn’t just out of the blue.

    First, people were getting fed up. Lots of travelers complained online about feeling tricked by hidden fees, especially cleaning charges that seemed way too high. Seeing one price and then having to pay much more felt like a bait-and-switch.

    Second, governments are stepping in. Rules in Europe already demanded clearer pricing. And here in the U.S., the government finalized the “Junk Fees Rule” late last year. This rule pushes companies across the board to show the full price upfront. It seems Airbnb decided to get ahead of being forced into it everywhere. They say millions of guests used the old optional total price toggle, showing people wanted this clarity.

    Hard Choices for Hosts

    This sounds good for guests, right? Maybe. But think about the hosts – the people renting out their homes. This change forces them into tough spots.

    Suddenly, that high cleaning fee makes their listing look much more expensive in search results compared to others, or even hotels. And guess what? Airbnb’s search ranking looks at the total price. So, a place with high fees might get pushed down the list, meaning fewer people see it.

    What can hosts do? They might have to bury the cleaning fee into the nightly rate. That makes the fee look smaller, but the nightly price looks higher. Or maybe they offer discounts for longer stays to make the total price seem more reasonable. But isn’t it shifting the problem around, rather than solving it? And who helps the small hosts figure this out?

    Airbnb Tightens Its Grip: Keep Fees on the Platform

    At the same time, Airbnb dropped another rule change, starting May 10, 2025. This one tells hosts, especially those using software to manage their listings, that they MUST charge nearly all mandatory fees through Airbnb.

    Want to charge a cleaning fee? Pet fee? Management fee? It has to go through Airbnb’s system and be part of that total price you see. If there isn’t a special spot for a fee Airbnb requires, hosts are told to add it into the nightly price itself.

    Collecting extra money off the platform? That’s now mostly forbidden. Only a few exceptions exist, like maybe a resort fee, and even then, it must be clearly listed on Airbnb. Why this strict control? Is it just about transparency, or is it about Airbnb controlling every dollar?

    Is This Really Just About Being Honest?

    Airbnb says these changes are about trust and transparency. Showing the total price upfront is definitely clearer for guests. And by making these changes worldwide before rules perhaps forced them, Airbnb looks like a leader. It also puts pressure on its competitors, like Vrbo, to do the same.

    But let’s be real. This is also about control. By forcing almost all fees onto its platform, Airbnb gets a clearer picture of all the money changing hands. It stops hosts from handling fees separately. Could this be setting the stage for Airbnb to offer more services itself, taking a cut along the way?

    And while guests get clarity, hosts get headaches. They now have to juggle pricing strategies, worry about search rankings, and explain these changes to property owners who might see their bookings dip. It adds work and stress, especially for smaller operators just trying to make ends meet.

    So, yes, you see the total price now. But as these platforms get bigger and rules get tighter, we have to keep asking: Who benefits most, and who is left carrying the weight?

  • State vs. Local Control: Who Makes the Rules for Short-Term Rentals?

    State vs. Local Control: Who Makes the Rules for Short-Term Rentals?

    When it comes to short-term rentals (STRs) like those found on Airbnb or Vrbo, a big question keeps popping up across the country: Who gets to make the rules? Should the state government set one standard for everyone, or should local cities and counties decide what’s best for their own communities? This debate over state vs. local STR regulation is heating up, and recent events show just how different the approaches can be.

    Austin Takes Action: Making Platforms Collect Taxes

    Let’s look at Austin, Texas. While the city is still figuring out some bigger changes to its STR rules (now delayed until October 2025), they made one important move starting April 1, 2025.

    Now, platforms like Airbnb and Vrbo must collect the city’s 11% Hotel Occupancy Tax (HOT) on every booking. This applies to all STRs in Austin, even if the property doesn’t have a city license.

    Why did Austin do this? Officials estimate around 10,000 unlicensed rentals weren’t paying this tourism tax. This new rule aims to fix that, ensuring STRs contribute tax revenue similar to traditional hotels. It means guests will pay more, but the city expects a significant boost in funds for tourism and cultural projects. This is a clear example of a local government using its power to solve a specific local problem.

    States Step In: Different Directions on Local Power

    While Austin focused locally, state legislatures are taking broader actions, often pulling in opposite directions.

    • More Power to Locals (Louisiana): In Louisiana, lawmakers are moving forward with bills that clearly support local control. House Bill 469 confirms that cities and parishes can set their own STR rules, like requiring permits or safety checks. Another bill, Senate Bill 225, goes further. It would ban unlicensed STRs statewide and cleverly allows neighbors or community groups to sue illegal operators. This gives local areas another tool for enforcement, especially helpful where city resources are limited.
    • Less Power to Locals (Ohio & Idaho): Ohio and Idaho are heading the other way. Proposed laws there (Ohio Senate Bill 104, Idaho Senate Bill 1162) aim to limit what local governments can do. These bills try to stop cities and counties from enacting common STR restrictions, such as:
      • Outright bans on STRs
      • Requiring the owner to live on the property
      • Using zoning to keep STRs out of neighborhoods
      • Setting high license fees or strict limits on the number of rentals.
      These states favor treating STRs more like regular long-term rentals, pushing for state preemption where the state sets the main rules. They generally prefer low registration fees and sometimes want platforms to handle tax collection statewide.
    • Lobbying Matters (Washington State): Sometimes, industry players influence these state decisions. In Washington State, a proposal to let local governments add an optional tax (up to 4%) on STRs failed. Reports suggest Airbnb spent heavily lobbying against it. This shows how powerful platforms can be in shaping state vs. local STR regulation debates.

    What Does This Mean for STRs?

    This ongoing push-and-pull between state and local control highlights a few key things:

    1. Platforms Are Watching: Companies like Airbnb and Vrbo pay close attention to proposed rules. They fight hard against laws they dislike (like new taxes) but might work with cities on rules they can live with, or comply when mandated (like Austin’s tax collection). Handling these different short-term rental laws is a big part of their business strategy.
    2. Enforcement is Tricky: Even with new rules, making sure everyone follows them is a challenge. Houston officials worried about enforcing their new ordinance. Austin delayed rule changes partly to get better tracking software. Louisiana’s idea of letting neighbors sue suggests official enforcement isn’t always enough. This “enforcement gap” is a real issue.
    3. The Conflict Continues: The core argument – state authority vs. local needs – isn’t going away. Debates often pit statewide economic arguments against local worries about housing, neighborhood peace, and quality of life. Expect more battles over state vs. local STR regulation in legislatures and city halls.

    The rules for short-term rentals are constantly changing, shaped by this fundamental conflict over who holds the power to regulate.

  • Washington State Eyes New 6% Tax on Short-Term Rentals: A Deep Dive into House Bill 1763

    Washington State Eyes New 6% Tax on Short-Term Rentals: A Deep Dive into House Bill 1763

    The landscape for short-term rentals (STRs) in Washington State may be facing a significant shift. Proposed legislation, House Bill 1763, has ignited a contentious debate, pitting proponents of affordable housing against STR operators and platforms like Airbnb. At the heart of the matter is a proposed 6% statewide tax on STR bookings, designed to generate funds for local housing initiatives. As a former law clerk with a keen interest in housing policy and zoning, I find this development particularly noteworthy, representing a common tension playing out across the country.

    Understanding House Bill 1763

    Introduced in the Washington State Legislature, HB 1763 seeks to impose a new 6% tax specifically on the occupancy of short-term rental units. The revenue generated from this tax would be earmarked for local governments to invest in affordable housing projects within their jurisdictions. This legislative effort targets a market estimated to involve potentially 35,000 rental units statewide that proponents argue are impacting the long-term housing supply.

    The Argument for the Tax: Addressing the Housing Nexus

    Supporters of the bill, including State Senator Liz Lovelett, draw a direct line between the growth of the STR market and the state’s affordable housing challenges, particularly in tourist-heavy areas. Senator Lovelett articulated this view, stating, “There’s obviously a fairly easy nexus¹ to recognize between a lack of housing existing in areas that have a lot of tourism and the proliferation of short-term rentals, especially in the last decade.”

    The rationale is straightforward: as properties shift from long-term rentals or owner-occupancy to STRs, the available housing stock for residents decreases, driving up costs. Reports from areas like Glacier, WA, paint a stark picture, describing housing as “borderline impossible” for local workers and raising fears of the town becoming solely a resort destination. Proponents, like Senator Lovelett, argue the tax empowers local governments, allowing them to “put some skin in the game on solving their own local housing issues” using funds generated directly from the sector perceived to be contributing to the problem.

    ¹ Nexus, in a legal and tax context, refers to a sufficient connection or link between a taxing entity (like the state) and the activity or entity being taxed (STR operations) to justify the imposition of the tax.

    Industry Pushback: Fairness and Economic Strain

    Unsurprisingly, the proposed tax faces strong opposition from the STR industry. Airbnb, a major platform operating in the state, and its associated political action committee, HOST PAC, argue vehemently against the measure. They contend that the tax “creates an unfair competitive disadvantage for Washingtonians who share their home to make ends meet.” This highlights a key defense: many hosts are individuals using rental income to supplement their earnings, not large corporations.

    Airbnb also points to its existing contributions, noting it remitted approximately $78 million in tourism-related taxes in Washington on behalf of its hosts in 2023. Adding another 6% tax, they argue, constitutes an undue burden. Host organizations, such as the Washington Host Coalition Association (WHCA), echo these concerns, emphasizing the financial pressures hosts already face amid “tough economic times, and high gas and grocery prices.” While an opposition rally in Olympia drew around 70 attendees, the industry’s lobbying efforts are significant.

    Policy Considerations and the Broader Context

    The debate surrounding HB 1763 reflects a larger, national conversation about regulating the STR market. Municipalities and states are increasingly grappling with how to balance the economic benefits of tourism facilitated by STRs against concerns about neighborhood character, housing availability, and equitable taxation.

    From a policy perspective, the proposed tax in Washington attempts to internalize an externality – that is, making the STR industry contribute financially to mitigating a perceived negative consequence (reduced housing affordability) associated with its operations. The legal concept of “nexus” mentioned by Senator Lovelett is crucial here; establishing this link is fundamental to the tax’s justification and potential legal defensibility.

    However, opponents raise valid points about fairness, questioning whether STRs are being singled out disproportionately compared to other factors influencing housing costs. They also emphasize the economic activity generated by hosts and guests.

    Conclusion: A Balancing Act

    House Bill 1763 presents a clear conflict between distinct policy goals: fostering affordable housing versus supporting the burgeoning STR economy. Proponents see a necessary tool for local empowerment and a fair way to address housing shortages linked to STR growth. Opponents, including hosts and major platforms, view it as a punitive measure that unfairly burdens individuals and overlooks their existing economic contributions. As this bill progresses, the outcome will undoubtedly have significant implications for hosts, guests, and the broader housing market in Washington State. The debate underscores the complex challenge of integrating new economic models like STRs into existing community structures and regulatory frameworks.

    The rules governing short-term rentals are complex and subject to change. For ongoing expert analysis of key legislative actions, court decisions, and policy trends impacting the STR industry, subscribe to the Staystra email list today.

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  • Airbnb Cracks Down: Are Your Direct Bookings in Danger?

    Airbnb Cracks Down: Are Your Direct Bookings in Danger?

    Hey folks, Meredith Lane here, your community impact correspondent. You know I’m all about getting to the bottom of how these short-term rental giants affect our neighborhoods and the people in them. Well, Airbnb has just rolled out some major updates to their rules, and it’s got the host community buzzing. They’re calling it the “Off-Platform and Fee Transparency Policy,” and it sounds like they’re tightening their grip on everything that happens outside of their website and app.

    Why should you care? If you’re an Airbnb host, these changes could really shake things up. Let’s break down what’s going on.

    Airbnb’s New Game Plan: Keeping Everything In-House

    Think of Airbnb like a big online marketplace for places to stay. They want to make sure that every booking, every payment, and pretty much every chat happens right there, on their turf. This isn’t totally new, but folks in the industry are saying this time, they mean business. They’re being “stricter, clearer, and more rigorously enforced,” according to the experts.

    Why the big fuss? Airbnb says it’s all about keeping everyone safe, secure, and making sure prices are clear. They want to stop sneaky fees and make sure everyone follows the rules. That sounds good, right? But some folks think there might be more to it.

    One expert put it this way: Airbnb seems to want “full control over financial flows” and wants to make sure they get their cut – about 15% – of almost everything. Another said they’re building a “fully captive ecosystem.” Basically, they want to make it harder for hosts to do anything that might let them skip paying those Airbnb fees.

    So, what exactly are they saying you can’t do anymore? Let’s get into the nitty-gritty.

    Red Alert! Things You Absolutely Can’t Do

    Airbnb has a pretty clear list of things that are now big no-nos. If you cross these lines, you could face warnings, or even get kicked off the platform!

    • No More Sneaky Side Deals: You can’t ask guests to book with you directly next time, or offer them a discount if they do. Even canceling an Airbnb booking to rebook the same guest on your own is a no-go. Think twice before sending a message saying, “Book on my website and save!” That could get you in trouble.
    • Payments Stay Put: Forget about asking for payments outside of Airbnb for the main booking cost or even extra things like heating the pool. Unless it’s a very specific situation (we’ll get to that later), all that money needs to go through Airbnb. So, no more “Pay me $50 on PayPal for the early check-in.”
    • Hidden Fees? Not Allowed! You have to tell guests about all the fees they’ll have to pay right upfront in your listing. Things like extra guest fees or pet fees need to be clear. You can’t surprise them with a “resort fee” at the end.
    • Keep Guest Info Private (Until They Book): Before someone books your place, you can’t ask for their email or phone number. All chats need to stay on the Airbnb platform. Even after they book, you can’t just ask for their email to add them to your mailing list. That’s a no-no!
    • Reviews Only on Airbnb: You can’t ask guests to leave reviews for your Airbnb stay on other websites like Google or Yelp. Airbnb wants all the feedback in one place.
    • No Forced App Downloads: You can’t make guests download a special app or create an account on another website just to get into your rental. Imagine arriving at your vacation and having to download a random app just to unlock the door? Airbnb says that’s not a good experience.

    It sounds like Airbnb wants to keep everything nice and tidy within their own system. They’re building what some are calling a “closed loop.” This means they want the whole guest experience, from start to finish, to happen right there on their platform.

    But Wait, There Are a Few Exceptions…

    Now, it’s not all black and white. There are a few specific situations where you can do things off the platform. But listen closely, because you need to follow the rules carefully!

    • Taxes (Sometimes): If Airbnb doesn’t automatically collect taxes in your area, or if the local law says you have to collect them yourself, you might be able to collect those off-platform. But you must tell guests about this in your listing before they book. No surprises!
    • Hotel Stuff: If you’re running a hotel on Airbnb, you might have different rules for things like asking for a credit card for extra charges or collecting payment for things like parking. But again, you need to be clear about this in your listing.
    • Special Software (Maybe): Some hosts who use special approved software might be allowed to collect certain fees or security deposits directly. But this seems to be for a select few, and the details aren’t super clear.
    • Talking After Booking: Once someone has booked your place, you can contact them to make sure the phone number Airbnb gave you is the best way to reach them. And if a guest asks to chat through text or WhatsApp, that’s usually okay. But remember, even in these chats, you still can’t ask for off-platform payments or reviews!
    • Legal Stuff: If the local laws or your homeowner’s association (HOA) requires you to collect certain information, like a copy of someone’s ID, then you might be allowed to do that. But you have to say so in your listing and be ready to prove it if Airbnb asks.

    The big takeaway here is that if you’re doing anything off-platform, you need to be super clear about it in your listing before someone books. If you don’t, you could be breaking the rules. Airbnb is putting the responsibility on you to explain why you need to do things differently.

    How Does This Affect You and Your Guests?

    These new rules are causing quite a stir in the short-term rental world. Hosts are worried about a few things:

    • Say Goodbye to Easy Direct Bookings? Many hosts like to build relationships with guests so they’ll book directly next time and avoid Airbnb fees. These new rules make that much harder. You can’t just ask for their email anymore. One expert said this makes it tough to grow your own “marketing funnel.”
    • Tough on Tech: If you use apps for things like smart locks that make guests download something extra, that might not be allowed anymore unless it’s legally required. One industry watcher pointed out that this could be a problem for many “vacation rental tech” companies.
    • No More Security Deposits? For most hosts, asking for a separate security deposit outside of Airbnb is now off the table. You’ll have to rely on Airbnb’s “AirCover” program if something gets damaged. Some hosts are worried that this might not be enough protection.
    • Feeling Less Independent: Some hosts feel like Airbnb is trying to control too much of their business. They worry about losing the ability to run things the way they want. One host even said these changes could be “devastating” for independent operators.

    It sounds like Airbnb wants to be in control of the whole process, and that might mean less freedom for hosts to connect with their guests in the ways they used to.

    What Can You Do About It?

    So, what’s a host to do? Here are a few things to keep in mind:

    • Read the Fine Print: Make sure you really understand the new rules. Airbnb has a lot of information on their website.
    • Check Your Listings: Go through all your listings and make sure all your fees are clear. If you’re doing anything off-platform that’s allowed, make sure it’s explained in your description.
    • Change Your Payment Habits: Stop asking for payments outside of Airbnb unless it fits one of the very specific exceptions.
    • Be Careful How You Chat: Keep most of your communication with guests on the Airbnb platform. If you do talk off-platform, maybe take a screenshot and send it in an Airbnb message just in case.
    • Look at Your Tech: If you’re using apps for things like check-in, make sure they follow the new rules. You might need to offer another way for guests to access your property.

    It looks like Airbnb is serious about these new rules. As one expert said, “these latest changes are stricter, clearer, and more rigorously enforced.” So, it’s important to pay attention and make sure you’re following them to keep your listings active.

    These changes raise some big questions. Is this really about safety and transparency, or is it more about Airbnb wanting to control everything and maximize their profits? What does this mean for the personal connection between hosts and guests? And how will this affect the unique charm of local short-term rentals?

    I’ll keep digging into this and bringing you the real stories behind these policies. Stay tuned!

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  • Maui’s Housing War: Is Banning Vacation Rentals the Cure or Just More Chaos?

    Maui’s Housing War: Is Banning Vacation Rentals the Cure or Just More Chaos?

    Hi everyone, Meredith Lane here, digging into the tough stuff impacting our communities. Right now, all eyes are on Maui. It’s a place known for beauty, but scarred by fire and now facing a huge fight over vacation rentals. Thousands of families are still reeling from the Lahaina disaster, desperate for homes. Mayor Richard Bissen says he has a solution: kick out thousands of short-term rentals (STRs) to make room for locals. But will it work? Or will it just wreck Maui’s economy and leave even more people struggling? Let’s break it down.

    The Plan: Targeting the “Minatoya List”

    So, what’s the actual plan? Mayor Bissen wants to phase out about 7,000 vacation rentals. These aren’t illegal operations; they’re condos, mostly in apartment zones, that got special permission years ago to operate as STRs. People call this the “Minatoya List,” after the lawyer who gave the opinion back in 1992.

    These are places many tourists stay, especially in West Maui (near Lahaina) and South Maui (like Kihei). They are mostly one or two-bedroom condos. Here’s the timeline the Mayor proposed:

    • July 1, 2025: Ban starts for about 2,200 units in West Maui.
    • January 1, 2026: Ban extends to the rest of the Minatoya List condos across Maui.

    The idea is simple: force these condo owners to either rent long-term (180 days or more) to residents, live there themselves, sell, or leave them empty. The goal? Get those units back into the housing pool for locals. But notice, this plan doesn’t touch STRs in hotel zones or permitted B&Bs. It’s laser-focused on this specific group of condos.

    Why Now? A Housing Crisis Meets a Wildfire Tragedy

    This didn’t come out of nowhere. Maui has struggled for decades to house its own people. Land is limited, building is expensive, and for years, more homes were turned into vacation rentals than were built for residents. You needed to earn nearly $200,000 a year just to afford the average rent! Teachers, nurses, hotel workers – the people who make Maui run – couldn’t afford to live there.

    Then came the Lahaina fire in August 2023. It wasn’t just a fire; it was a catastrophe. Lives lost, thousands homeless overnight. The housing crisis became a humanitarian emergency. Suddenly, those vacation condos looked like potential homes for survivors. Groups like Lahaina Strong started demanding action, standing with the Mayor. They argued: these units were meant for residents anyway, let’s take them back.

    And importantly, a state law passed in May 2024 (SB 2919) gave Maui County the clear power to make this kind of move, removing legal roadblocks that stopped earlier attempts. The fire created the urgency, and the state law provided the tool.

    The Million-Dollar Question: Will This Actually House Locals?

    Okay, so the plan is to free up 7,000 units. Sounds great, right? Proponents, like the Mayor, say this is a direct path to more homes and maybe, just maybe, lower prices. One study (from the University of Hawaiʻi Economic Research Organization, or UHERO) suggests condo prices could drop 20% to 40%.

    But hold on. Critics are shouting warnings.

    • No Guarantees: Owners can’t be forced to rent long-term. They could sell – maybe to mainland buyers looking for a cheaper second home, not locals. They could use it themselves part-time. They could just leave it empty. Where’s the guarantee these become homes for fire survivors or local workers?
    • Wrong Kind of Homes? Many of these condos are small studios or one-bedrooms. Are they right for families? Plus, they often have huge monthly HOA fees ($1,000-$1,500 or more!) and are in tourist zones, maybe far from schools or local jobs. Are these really the affordable homes people need?
    • Still Too Expensive? Even if prices drop, add those high HOA fees, property taxes, and mortgage payments. Will working families actually be able to afford them?

    It seems like a big gamble. Will kicking out tourists really create the affordable, suitable homes Maui desperately needs? Or are we just shuffling the deck chairs?

    Economic Tremors: Jobs, Taxes, and Maui’s Lifeline

    Then there’s the economy. Maui runs on tourism. Pulling thousands of rental units offline is like pulling threads from the island’s main fabric. The warnings are stark:

    • UHERO Study: Predicts $900 million less visitor spending each year, about 1,900 jobs lost (maybe double that), and up to $60 million less in county property taxes annually. That’s money needed for fire recovery and basic services.
    • Other Studies: Some paint an even bleaker picture, talking about billions in lost economic activity and over 14,000 jobs gone. They call it an “economic crash and burn.”

    Mayor Bissen pushes back. He says these models don’t capture the “lived experiences” of struggling residents. Calling the ban “pro-resident,” arguing it’s about community balance, not just dollars and cents. Bissen believes Maui depends too much on tourism anyway. But the question hangs heavy: Can Maui afford this, especially now? Who pays the price if thousands lose their jobs – cleaners, landscapers, shop owners, restaurant workers?

    Where Things Stand Now (April 2025): Waiting and Worrying

    Nearly a year after the Mayor announced this plan, Maui is still waiting. The County Council has the final say. They got the bill back in December 2024 and face a deadline: June 18, 2025. They need to vote yes, no, or change the plan.

    But the Council hasn’t even scheduled the big hearing yet, likely waiting until after budget season. They tried to get their own independent economic study done, but couldn’t find anyone to do it. So, they’re relying on reports like UHERO’s and their own staff research.

    Meanwhile, the uncertainty is already hurting. People are calling it a “chilling effect.”

    • Condo sales listings have exploded – nearly four times higher than two years ago! Prices are starting to dip.
    • Some STR owners are selling, cutting rates, or seeing fewer bookings. Businesses that support STRs are feeling the pinch.

    Mayor Bissen is publicly standing firm, saying the focus must be on residents. But there are whispers – unconfirmed rumors, mind you – that maybe he’d consider shrinking the ban to target fewer units, perhaps only those originally meant for workers. We don’t know if that’s true, but it shows how tense things are. Maui is caught in limbo, feeling the economic pain before any potential housing gain.

    The Opposition: Property Rights and Finding Fault

    Who’s fighting this? Lots of people.

    • STR Owners: They say they bought these condos legally, relying on that Minatoya opinion. They argue taking away their right to rent short-term is unfair and possibly illegal – a violation of property rights. Lawsuits are almost certain if the ban passes.
    • Tourism & Real Estate Groups: They point to the economic damage and job losses. They also argue it won’t solve the housing crisis because the units aren’t right or owners won’t convert.
    • Some Residents: Polls cited by opponents suggest many Maui voters prefer cracking down on illegal STRs, not banning legal ones. They worry about the cost of living and homelessness more than vacation rentals.
    • The “Scapegoat” Argument: Many feel STR owners are being blamed for decades of the county failing to plan and build enough affordable housing. Is this ban fixing the real problem, or just pointing fingers?

    Is There Another Way? Ideas on the Table

    Opponents aren’t just saying “no.” Many agree housing is a crisis. They suggest other paths:

    • Tax, Don’t Ban: Hike property taxes way up for STRs. Maybe that pushes some owners to sell or rent long-term, and it brings the county more money, not less. Tax empty homes, too.
    • Go After Illegal Rentals: Focus police power on the rule-breakers, not the legal operators.
    • Build, Build, Build: Cut the red tape that makes building new homes so slow and costly. Give real incentives for affordable projects. Fix infrastructure.
    • Smarter Rules: Maybe cap the number of STRs in certain areas? Make rules stricter? Phase things out much slower?

    Maui’s Crossroads: A Painful Choice

    Here’s the bottom line: Maui is facing a heartbreaking choice with no easy answers. The need for housing, especially after the fire, is real and urgent. People are suffering. But the risk of crippling the economy that supports so many families is also terrifyingly real.

    Will the ban work as intended? Can Maui afford the potential fallout? Are there better ways to help families find homes without causing an economic meltdown?

    The County Council has a heavy burden. Their decision by June 18th will echo for years. Whatever they choose, legal fights are likely, and the deep problems of housing and tourism won’t disappear overnight. This isn’t just about condos; it’s about Maui’s future, its people, and its soul. We’ll be watching closely. Stay tuned.

    Other Cities that are trying to Ban Short Term Rentals.

    Dallas, TX

  • Real Estate Depreciation: What’s Happening Now and What Might Change in 2025

    Real Estate Depreciation: What’s Happening Now and What Might Change in 2025

    Hi everyone, Jed Collins here, your guide to the rules and policies around short-term rentals. Today, we’re going to talk about something called depreciation. It’s a way for people who own buildings to lower their taxes over time. Think of it like saying a building slowly loses value as it gets older, and the tax rules let you count that loss.

    Right now, in early 2025, there are rules about how much of a building’s cost you can deduct each year. But things might change later this year! Let’s break it down in a simple way.

    How Depreciation Works Today

    Usually, when you buy a building, you can’t just say it all went away in one year for tax purposes. Instead, you have to spread out the cost over many years. This is called depreciation.

    There are different ways to do this. One common way is called MACRS (it’s a long name, so don’t worry about remembering it!). MACRS says how many years you have to take to lower the value of your building for taxes. For a place where people live, like an house, it’s usually 27 and a half years. For other buildings, like stores or offices, it’s often 39 years.

    Another rule is called bonus depreciation. This lets you take a bigger chunk of the cost off your taxes in the first few years. For things bought in 2025, you can deduct 40% of the cost right away! This is less than before. For example, if you bought something for $100,000 in 2022, you could deduct the whole $100,000 right away. In 2023, it was 80%, and in 2024, it was 60%. Now it’s going down to 40%.

    There’s also something called Section 179. This lets some businesses take the full cost of certain things off their taxes right away, up to a certain amount each year. For 2025, that limit is $1,250,000. But there are rules about what kind of property this works for, and your business has to have enough income.

    What Could Change in 2025?

    Now, here’s where it gets interesting. The people in charge of making laws about money (like taxes) have been talking. They made a plan in April 2025 that could lead to some big changes later this year.

    One of the big ideas is to bring back 100% bonus depreciation! That means if you buy something that qualifies, you could deduct the entire cost in the first year, just like it was in the past. Some people are even saying this could go back to January 20, 2025.

    This is a big deal for people who invest in buildings. If they can deduct more money sooner, it can help them save on taxes and have more money to use for other things.

    What This Means for You

    If you own or are thinking about buying a short-term rental, these possible changes could be important.

    • If 100% bonus comes back: You might want to think about buying things or making improvements sooner rather than later to get the bigger tax break.
    • Even with 40% bonus: It’s still a good idea to understand how depreciation works. There are even ways to study your building to find parts that can be depreciated faster, called cost segregation.

    But remember, these are just possibilities right now. The laws could stay the same. So, it’s important to keep an eye on what happens and talk to a tax expert to see what’s best for you.

    Get out full report here.

  • Decoding the Disruption: Trump’s Tariffs and the Future of Short-Term Rentals

    Decoding the Disruption: Trump’s Tariffs and the Future of Short-Term Rentals

    The implementation of the 2025 Trump Tariffs marks a notable shift in international trade policy, and as the Legal & Policy Contributor for this blog, it’s my responsibility to analyze the potential ramifications for the short-term rental (STR) market. While the tariffs are broad in scope, their impact on tourism, particularly from our neighbors to the north, Canada, warrants careful consideration.

    In early April 2025, President Trump enacted a “reciprocal” tariff plan, citing trade imbalances and unfair practices. This involved a baseline 10% tariff on most imports, effective April 5th, with higher, “individualized” tariffs for specific countries following on April 9th. While Canada wasn’t initially subject to these individualized tariffs, pre-existing duties on steel, aluminum, and automobiles remained, alongside a complex structure of tariffs and exemptions under the United States-Mexico-Canada Agreement (USMCA). Predictably, Canada responded with its own countermeasures, including tariffs on US automobiles and a range of other goods.  

    This multi-layered approach, while intended to address trade deficits, introduces considerable complexity and uncertainty, factors that often deter discretionary spending like international travel. Even with USMCA exemptions, the tariffs on key sectors, coupled with the overall trade dispute, are likely to sour the economic relationship between the US and Canada, potentially leading to a decrease in leisure travel.

    The Rising Cost of Crossing the Border

    The tariffs are expected to increase the cost of US travel for Canadians through both direct and indirect mechanisms. Directly, the tariffs will likely inflate the prices of imported goods within the US. Canadian tourists purchasing goods will likely face higher prices as American businesses pass on tariff costs. Indirectly, the 25% tariff on automobiles could eventually raise rental car prices. Furthermore, Canada’s retaliatory tariffs on US goods could increase the cost of living for Canadians, reducing their discretionary spending on travel. Economic uncertainty stemming from the trade dispute could also negatively impact the Canadian dollar’s exchange rate against the US dollar, making US travel more expensive. Experts anticipate that these tariffs will generally lead to higher prices for American consumers , and the travel industry is no exception, with potential increases in operating costs for airlines and hotels being passed on to consumers.  

    Destinations on Edge: Where Will Canadians Stay Away?

    Historically, Florida, California, Nevada, New York, and Texas have been the top US destinations for Canadian tourists seeking short-term rentals. Within these states, Orlando, Las Vegas, and New York City are particularly popular. Border states like New York and Michigan also heavily rely on Canadian tourism , with Detroit and the Wildwoods on the New Jersey Shore being notable examples. Even destinations like Virginia Beach have acknowledged the potential impact and are offering discounts to attract Canadian visitors.  

    Destinations with strong historical ties to Canada and those located near the border are particularly vulnerable. Las Vegas, with nearly half of its international airport arrivals from Canada , stands to see a significant impact on its short-term rental market.  

    The Economic Stakes: Billions on the Line

    Canada is the leading source of international visitors to the US. In 2024, Canadians made 20.4 million trips, spending $20.5 billion and supporting an estimated 140,000 American jobs. Even a modest 10% reduction in Canadian travel could result in 2 million fewer visits, a $2.1 billion loss in spending, and 14,000 potential job losses.  

    Early data from 2025 already indicates a decline in Canadian travel to the US. Vehicle crossings and air travel have both decreased , and hotel bookings from Canada to US destinations have also seen a drop. Notably, vacation rental professionals in Florida reported a 16% decline in Canadian reservations through mid-February 2025, and rental managers in Hawaii saw a 14% decrease. Border regions are also feeling the pinch, with hotel demand down in Niagara Falls, NY, and Bellingham, WA.  

    Key Table 1: Impact of Reduced Canadian Tourism on Select US States (Based on Early 2025 Data)

    StateMetricPercentage Change (Year-over-Year)Source
    FloridaDecline in vacation rental reservations-16%
    HawaiiDecline in rental bookings-14%
    New YorkDecrease in hotel room demand (Niagara Falls)-8%
    WashingtonDecrease in hotel room demand (Bellingham)-12%

    Looking North and Beyond: Alternative Destinations

    Faced with increased costs and a potentially less welcoming perception of the US, Canadian tourists have numerous alternative destinations. The Canadian government has encouraged domestic travel , and searches for domestic Airbnb stays have reportedly surged. Ontario’s cottage country is being promoted as a luxurious alternative , alongside other Canadian gems like the Cabot Trail, the Canadian Rockies, and major cities. The Canadian dollar’s parity with itself makes domestic travel financially straightforward.  

    Internationally, destinations where the Canadian dollar holds strong purchasing power, such as Australia, Egypt, and Vietnam, are becoming more attractive. Other popular alternatives include Portugal, Costa Rica, Thailand, and Mexico.  

    Economic Ripples: Regional Vulnerabilities

    The anticipated decline in Canadian tourism is expected to have a significant economic impact on the US short-term rental market, with border states and historically popular destinations bearing the brunt. Economists have warned of a potential slowdown in the US economy due to the tariffs , and the U.S. Travel Association has cautioned about substantial job losses and billions in lost spending. The early decrease in hotel demand in border regions and the drop in bookings in Florida and Hawaii are concerning indicators. Some experts believe the tariffs create an “unwelcoming environment” for foreign tourists, potentially exacerbating the decline.  

    Expert Opinions and Historical Echoes

    Industry associations like the Association of Canadian Travel Agencies (ACTA) and the U.S. Travel Association have voiced concerns about the tariffs’ impact on travel. Hotel industry data reveals a decrease in average hotel prices in major US destinations , possibly reflecting market uncertainty and softening demand. Notably, Canadian hotel searches for US destinations have significantly declined , suggesting a broader reluctance to travel south.  

    Historically, trade disputes between the US and Canada have correlated with decreased cross-border travel. During past disagreements, some Canadians informally boycotted American goods and services, including leisure trips. The early decline in Canadian travel in 2025 , the “collapse” in demand for flights between the two countries , and the surge in domestic Airbnb searches all echo this historical pattern.  

    Conclusion: Navigating the Shifting Landscape

    The evidence suggests that the 2025 Trump Tariffs will negatively impact the US short-term rental market due to a decline in Canadian tourism. Increased travel costs, a less welcoming perception, and attractive alternatives are all contributing factors. Border states and popular tourist destinations are most at risk.

    To mitigate these potential consequences, stakeholders in the US short-term rental market should consider diversifying their target markets, enhancing their value propositions, implementing strategic marketing, collaborating with tourism boards, and maintaining flexibility in their pricing and service offerings. While the long-term effects remain to be seen, proactive adaptation will be crucial for navigating this evolving landscape.

    Don’t Just Take my word for it, here are some helpful links.

    Where Have All the Snowbirds Gone? Canadians Cold on U.S. Travel: https://www.ctvnews.ca/canada/article/where-have-all-the-snowbirds-gone-canadians-cold-on-us-travel/

    How US-Canada Trade War Affects Tourism, Hospitality and Aviation Industry: https://www.travelandtourworld.com/news/article/how-us-canada-trade-war-affects-tourism-hospitality-and-aviation-industry-everything-you-need-to-know-about-aggressive-trump-tariff-policy/

    Canadian Travel to the United States Softens: https://nastra.org/canadian-travel-to-the-united-states-softens/

    As Canadians Cancel Trips Due to Trump, the U.S. Tourism Industry Could Lose Billions: https://www.cfpublic.org/2025-03-06/as-canadians-cancel-trips-due-to-trump-the-u-s-tourism-industry-could-lose-billions/

    Anger Against Trump is Forecast to Cost the US International Visitors: https://apnews.com/article/us-travel-canada-europe-international-tourism-22294ec17518cd28450cb3c0227b8351

    Tariff Ripple Effect: US Hotel Prices Adjust as Canadian Travel Interest Plummets: https://www.mylighthouse.com/resources/blog/tariffs-us-hotel-prices-impact/