VACATION RENTAL INDUSTRY STEPS UP LOBBYING
Doyinsola Oladipo REUTERS
NEW YORK
— The vacation rental industry has stepped up efforts to influence U.S. lawmakers to keep more cities from enacting restrictions on short-term rentals in response to concerns about housing availability and quality of life.
Growth in short-term rental supply has slowed in 17 of North America’s largest 30 cities in 2024, according to KeyData, a vacation rental analytics firm. In response, Booking Holdings, Expedia Group’s VRBO, and smaller operators are spending more on lobbying to head off local restrictions that limit supply.
Numerous cities around North America, including New York, Los Angeles and Montreal, have curbed the growth of rental properties, responding to complaints from residents who say short-term rentals make housing less affordable and hurt the quality of neighborhood life.
“We’re really eager to work with those local lawmakers to understand what their priorities are, but there are some opportunities to strive for stability and consistency in state law,” said Richard de Sam Lazaro, senior director of government affairs at Expedia.
In the first half of 2024, vacation rental companies spent $1.4 million on lobbying, up 13 percent from the year-ago period as they step up efforts in states like Florida, Colorado, and Arizona. Detractors believe they will continue to spend more money.
“That’s the tip of the iceberg compared to how much staff they have and who they are em-
30-year, fixed-rate mortgage steadies near 15-month low
Makailah Gause REUTERS
NEW YORK — The average rate on the popular U.S. 30-year mortgage rate was little changed near the lowest level in over a year this week, as signs of cooling inflation have held down the Treasury bond yields used in setting home loan costs.
The 30-year fixed-rate mortgage averaged 6.49 percent during the week ending August 15, up fractionally from 6.47 percent in the prior week, the lowest since May 2023, mortgage finance agency Freddie Mac said on Thursday.
“In 2023, the 30-year fixed-rate mortgage nearly hit 8 percent, slamming the brakes on the housing market,” Freddie Mac Chief Economist Sam Khater said in a statement.
“Now, the 30-year fixed-rate hovers around 6.5 percent and will likely trend down in the coming months as inflation continues to slow. Lower rates are good news for potential buyers and sellers alike.”
It averaged 7.09 percent during the same period a year ago. Mortgage applications increased by nearly 17 percent last week as mortgage rates continued to fall, Mortgage Bankers Association data showed on Wednesday, enticing homeowners who had bought with high-rate mortgages in the last year to rush to refinance those loans.
“The significant increase was led by a 35 percent jump in refinances and also included a 3 percent increase in purchase applications. While the refinances remain strong, we expect that the purchase market will continue to gain momentum as mortgage rates continue to fall,” MBA Chief Executive Bob Broeksmit said in a statement.
ploying to be so-called organizers,” said Murray Cox, a housing activist who founded Inside Airbnb, a data platform that tracks vacation rentals. “In many cities short-term rentals have a negative impact on housing and they should be regulated.”
Cox helped draft legislation to restrict short-term rentals in New York City that took effect in September 2023. Since then, listings for less than 30 days have fallen by 54 percent, according to AirDNA, a short-term rental analytics firm.
Average hotel prices in New York rose 5.6 percent in the first
half of 2024, compared with a 1.8 percent increase nationally, according to Costar, a commercial real estate analytics firm.
A month after regulations restricting rentals to primary residences were passed in 65 British Columbian communities, supply fell 9.4 percent, said Jamie Lane, chief economist at AirDNA, while daily hotel rates rose 9 percent in the province.
Vacation home purchases have already slowed due to higher interest rates and elevated home prices, said Melanie Brown, director of data insights at vacation rental analytics firm
Key Data. Expedia spent $380,000 on lobbying in the first half of 2024, up 58 percent from the year prior, according to nonprofit transparency group Open Secrets. Expedia worked with Arizona legislators on regulation that prohibits localities from enacting outright bans. Booking Holdings boosted lobbying expenditures 61 percent in the same period to $570,000.
Local vacation associations and professional property managers are also pooling funds for lobbying. In Florida, the Florida Professional Vacation Rental Co-
alition persuaded Governor Ron DeSantis to veto a bill in June that would have authorized local officials to revoke or refuse to renew short-term rental licenses.
DeSantis called the bill “bureaucratic red tape.”
“You pay to have access,” said Steve Milo, coalition Steering Committee Chair and CEO of VTrips, a professional property management company. “It is not by chance that you have such a pro-vacation rental situation in the state of Florida.”
Milo said property managers across Southern states are trading notes on how to increase their lobbying.
Analysts so far don’t see regulations threatening the viability of Airbnb and others. Airbnb said 80 percent of its top 200 markets by revenue are already regulated, and while it is seeing a fall in active listings, it attributed that to efforts to remove lower-quality properties.
“It would be different if we saw a whole country or even a whole major U.S. state change the rules,” said Richard Clarke, Bernstein equity analyst.
Airbnb’s 2024 lobbying spend is down 29 percent to $470,000, and it does not expect full-year expenditures to differ significantly from 2023’s $1.03 million, as the company focuses on global expansion.
Restrictions found in North America are present elsewhere. Barcelona plans to bar apartment rentals to tourists by 2028 to rein in soaring housing costs. A few weeks later, the Spanish government announced a crackdown on holiday rentals due to anger from locals.
CINDY ELLEN RUSSELL / STAR ADVERTISER
Pictured are vacation unit rentals at the Kapalua Golf Villas in Lahaina.
DATED: LIHUE, Kaua‘i, Hawai‘i, JULY 22, 2024.
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