Do Short-Term Vacation Rentals Change the Character of Historic Neighborhoods?

By David Brown posted 07-25-2017 16:13


As the appeal of living in a historic neighborhood continues to grow across the country, the arrival of short-term vacation rentals (STVRs) has challenged many residents to ensure that the “neighbor” stays in their neighborhoods. The result is a complex debate about the benefits versus negative effects of this $30 billion industry.

Faubourg Marigny, New Orleans. | Credit: Photo by Infrogmation of New Orleans is licensed under CC BY 2.0

The National Trust is encouraged by the work that residents and policymakers in many cities are doing to determine what is best for their communities, and we are monitoring the effects of STVRs on historic neighborhoods by tracking study reports, media coverage, and legislation as well as through contacts with our partners.

Additionally, while cases in which STVR service companies—Airbnb, HomeAway, and others—have sought to counteract local planning are an important concern, we applaud instances of these companies supporting regulations—such as license requirements, payment of taxes, and limitations on non-owner-occupied STVRs—in response to residents’ apprehensions.

We have compiled some of our findings focusing on specific challenges and the responses of cities and STVR service companies. To aid in our continued monitoring of this issue, we invite readers to share their experiences on Forum's new online community, Forum Connect.

Changing the Character of Historic Neighborhoods

Residents of some historic communities maintain that STVRs take the “neighbor” out of neighborhoods. For example, in 2016 unregulated STVRs began to dominate New Orleans’ famed French Quarter and moved into other historic neighborhoods. Residents like Lisa Amoss, who lives in the historic Faubourg St. John neighborhood, express opposition to the changes they have seen:

Our neighborhood (and many others) have been invaded by short-term rentals and they are drastically changing our character and culture….Our neighborhood is becoming increasingly occupied by transients who have no vested interest in keeping this a vibrant, diverse and safe place to live.

Meg Loustau, a resident of New Orleans’ historic Tremé neighborhood, concurs:

Even if they are quiet … that’s still a home that’s no longer home to one of our neighbors. People who are here for short periods of time, they don’t vote, they don’t go to school, they don’t go to church here, they don’t go to the dry cleaners.

A 2016 study found that most of New Orleans’ STVRs are in historic neighborhoods, noting:As homes are converted to short term rentals … this changes the neighborhood from one that serves residents to one that serves tourists.”

In December 2016 the short-term rental division of the New Orleans City Council amended the zoning code with new regulations that, among other things, ban STVRs in the French Quarter. Airbnb worked closely with the city to legalize STVRs and establish new regulations. The result is considered a model for collaboration between Airbnb and other STVR service companies and cities.

Iron balconies in New Orleans' Vieux Carré. | Credit: Mitchel Osborne


Commercialization of Historic Neighborhoods through Non-Owner-Occupied STVRs

Savannah, Georgia, has 748 STVRs in its historic districts with 35 percent of STVR owners living outside city or county boundaries. In 2016 the city formed a task force in response to increasing complaints about noise, unkempt lawns, parking, occupancy limits, and other violations. The Historic Savannah Foundation (HSF) focused its support on reasonable regulations that set caps and prohibited new non-owner-occupied STVRs (while grandfathering in existing ones). 

The proposed regulations continue to spark discussion. Several investors have challenged the proposed ban’s legality and recommended that rentals be allowed so long as a local, licensed property manager is available.

Turning Neighbor Against Neighbor

“Most people don’t realize it until it happens next door to them,” says John Summers, Nashville Neighborhood Alliance board member and former Metro Nashville (Tennessee) councilman. “It is splitting neighbors,” he says. “Some folks are making money out of it so the argument becomes ‘I need to pay my mortgage’ versus ‘I don’t want a hotel in my neighborhood.’ It has become a huge conflicting issue in neighborhoods.”

Summers observes the biggest impact in Nashville’s historic neighborhoods, with 60 percent of STVRs located near the downtown tourist district. He adds that a lack of historic zoning results in greater impact. “People are saying ‘I want to add an addition, now I’m going to add 1,000 instead of 500 square feet to rent out.’ If you don’t have an overlay protection and are zoned for duplexes, developers are tearing down houses and building for short term rentals,” says Summers.

As Nashville’s Metro Council considers regulations, the pro and con arguments have played out in lengthy public hearings:

Nell Levin … said a house that was once affordable was recently bought and is now a short-term rental. "Now we have bachelorette parties," Levin said. "A mother … was driven out … I don't think my neighborhood is better because this woman and her child were driven off my street."

Linda Tyler-Goins, who rents out a home where she doesn't reside, has concerns about her “dream of retirement” if STVRs are outlawed. "With this phase out I … don't know what I'm going to do," she says.

Lack of Regulations or Not Following Regulations

Residents like Kristen Hotopp, who lives in an older neighborhood near the famed music districts in Austin, Texas, complain, “You have large groups of people there screaming in the middle of the night… When the bars close downtown … it just becomes kind of an all-night thing."

Austin’s Neighbors for Short-Term Rental Reform group urged the Austin City Council to enact stronger regulations to curb “bad actors,” which the council did in 2016.

The issue was particularly important to STVR service company HomeAway, which is based in Austin. The company recently introduced “Stay Neighborly,” an initiative that allows residents to log complaints about properties rented through the service.

Challenges in Enforcing Regulations

San Francisco—where Airbnb’s headquarters is based—tried to prevent Airbnb from listing properties that violated the city’s regulations. In response, Airbnb sued the city. In May 2017 the two parties agreed that Airbnb will require STVRs to provide registration numbers and will remove any invalid listings.

The city of Denver has sent more than 1,000 violation notices as the result of an ordinance passed by its city council in 2016. To ensure awareness of the new regulations, the city started a media campaign called “Stay Legit Denver.”

Impact on Affordable Housing and Availability of Long-Term Rentals

Seattle City Council Member Tim Burgess notes that STVRs are taking affordable housing off the market. He also links STVRs to a decreased availability—and increased price—of long-term rental housing. Burgess seeks to prevent landlords from “choosing tourists over tenants.” In April 2017 a proposal was presented to the city council to allow STVR hosts to operate in their primary residence and one additional property. “I think we’ve struck the right balance,” Burgess says. Airbnb’s public relations office issued a statement of support. As of July 2017, the city council had not yet voted on the regulations.

Oglethorpe Avenue in Savannah, Georgia. | Credit: National Trust for Historic Preservation


Short-Term Rental Companies Lead Advocacy and Support Some Regulations

The companies that make lodging reservations easy by connecting travelers with millions of STVRs through websites and apps support some regulations and challenge others.

  • Short Term Rental Advocacy Center. This website, established by Airbnb, HomeAway, Flip Key, and Trip Advisor, provides guidance on engaging policymakers to advocate for STVRs. The site advises that STVRs are a “noncommercial activity … All short term rentals should be treated the same, without differentiations between residency, use, advertising or booking platforms or business models.”
  • State-level advocacy. STVR service companies have taken varied approaches depending on the issues.
    • One approach has focused on lobbying state legislatures to override cities’ ability to regulate STVRs, a move that was successful in Florida. The Florida League of Cities outlined the problems arising from the state’s passage of this law.
    • Responding to the issue of taxation, Airbnb has worked with state legislatures to pass laws requiring STVRs to pay lodging taxes. For example, Airbnb testified before the New Jersey Assembly in 2017 in favor of lodging tax legislation.
  • R Street Report. In March 2016, R Street, a think tank headquartered in Washington, D.C., issued a study evaluating 59 cities, giving low grades to those with and high grades to those without regulations.

Continued Monitoring of STVR Impact on Historic Neighborhoods

The National Trust supports and encourages approaches that recognize and balance the rights and needs of residents who have revitalized historic neighborhoods by purchasing and maintaining historic homes with the significant economic benefits brought by travelers who stay in STVRs.

As millions of travelers enjoy the unique experiences offered by STVRs, this type of lodging will undoubtedly continue to increase in popularity. The National Trust will continue to monitor and report our findings about impacts—positive and negative—in historic neighborhoods and to engage in a dialogue about this issue. We invite readers to contribute to this dialogue by sharing experiences from their communities on Forum's new online community, Forum Connect.

David J. Brown is the executive vice president and chief preservation officer of the National Trust for Historic Preservation.

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