In recent years, the short-term rental industry has experienced explosive growth, driven by platforms like Airbnb, Vrbo, and Booking.com. But rapid expansion of short-term rentals has brought about regulatory challenges for cities around Oklahoma and throughout the country.
One of the primary concerns associated with short-term rentals is the potential for disrupting residential neighborhoods. Whether justified or not, local residents voice their dislike for rising housing costs, noisy tourists, and increased traffic in their communities.
Some municipalities have responded by capping the number of short-term vacation rentals within a particular area. For example, Los Angeles restricts short-term rentals to one’s primary residence. In September, New York City implemented new requirements requiring hosts of short-term rentals to commit to being physically present in the home for the duration of the rental and barring rentals by more than two guests at a time.
Most large municipalities require a license for the rental, which both serves as an income source to the city and ensures that the rental property subject to the license meets applicable health and safety regulations. In addition to licensing fees, short-term rentals are typically subject to lodging or hotel taxes.
In Norman Okla. for example, any short-term rental property requires a short-term rental license prior to renting the property. Rental property located within an area classified as PUD (planned unit development), or SPUD (simple planned unit development), requires Council approval or special use approval prior to renting the property. And Norman implements a tax rate of 8% for short-term rentals which must be remitted to the City monthly.
Oklahoma City has similar requirements. Before renting any short-term rental property, a “home-sharing license” must be obtained. The property must be zoned for residential use, and if the property is not the owner’s primary residence, a special exception from the City Board of Adjustment is required. A 5.5% monthly hotel tax is owed to the City for rental payments.
Short-term rentals are a great financial opportunity for homeowners and local economies, and so the industry has (mostly) been a boom market in recent years, but citizen concerns have led regulatory agencies to act. While the short-term rental industry continues to evolve, more regulations are sure to follow, making it doubly important that anyone in the industry or entering the industry remain vigilant for incoming regulatory changes.