John Locke Update / Research Newsletter

The fight over Airbnb in Raleigh

posted on in City & County Government, Economic Growth & Development, Property Rights

This week I attended a meeting of the City of Raleigh Planning Commission Text Change Committee.  The issue at hand was an ordinance regulating “short term residential lodging facilities,” which means Airbnb and similar sorts of private, short term rentals, frequently used by vacationers and business travelers.  These are technically not legal in Raleigh, though plenty of them exist.  And nobody bothered to question them until the city started issuing citations last year.

Now the issue’s been raised, the city feels like they need to do something about it.  They’ve spent months debating the particulars of an ordinance.  The draft they ended with today puts some pretty significant limits in place.

  • You can’t rent out a whole house/townhome/condo, only one in which you or a manager actually lives.
  • You can’t rent out more than two rooms or have more than two adults staying there at a time, so one room with two people sharing or two rooms with one person each.
  • You can’t rent out any rooms at all if another home within 400 feet of yours is already renting out rooms short term.
  • You can’t rent rooms to the same person under this sort of short term arrangement for more than 30 consecutive days.

The reasons for all of this are mostly pretty obvious.  Neighbors have raised concerns about parking problems, unknown people coming in and out of their neighborhoods at all hours, party houses, and whole neighborhoods being taken over by these short term rentals.

I’ve never used Airbnb myself, but my father’s become a great fan of VRBO, so I’ve stayed in those properties from time to time.  It’s a similar sort of deal.  Last summer, my father’s family, who are spread all over the country, got together in Washington, D.C.  It’s something we don’t do enough.  My father, his three siblings, all the spouses, three of the (adult) children including myself, and my Grandmother all rented a large house in Maryland just outside of D.C. for a week.  All told, we had eleven adults, and we weren’t quite at capacity in this house.  Needless to say, it was in a pricey neighborhood.

And maybe we were indeed the sort of crazy party house that people seem to be concerned about.  We did have eleven adults under one roof.  My uncle, being a bit of a wine snob, did order two cases from a favorite vineyard to be sure we had good wine all week, and it was all consumed.  We did play some pretty intense games of pinochle around the kitchen table.  There was some raucous laughter.

Of course, there was also a lot of really precious time with family, the sort of thing that doesn’t happen very often when you’re spread coast to coast across half a dozen states.  We cooked together.  We shopped together at a local farmer’s market.  We ate round the kitchen table.  We played cards.  We played boardgames.  We sipped wine while watching our beloved SF Giants on television.  We played pool on the very uneven pool table in the basement.

We spent less on accommodation than we would have if we’d had to stay in hotels, which helped to make that trip possible.  But even more importantly, we got to do all those simple things that we couldn’t do in a hotel.   And so I’m thankful to the people who rented a home to us.  And I’m thankful to their neighbors for accommodating the house at the end of the cul-de-sac being used for something other than normal residential.

I fear the City of Raleigh is in very real danger of using a sledgehammer to crack a nut here.  I say this because there’s one other provision in the new proposed ordinance that got very little discussion at this morning’s meeting.  And yet, I think it’s the most important one of the lot.  There’s a whole section about revocation of a permit.  It’s a full page of text, but it basically says that if the owner, a manager, or a renter of this sort of facility violates any criminal law or city code or regulation twice within a 365 day period, then the right to host these sorts of rentals will be revoked for a full year.  That’s right, any two violations, and you’re out for a year.

I contend that you could drop the entire rest of the proposed ordinance, adopt only that section about revocation, and take care of the problem.  All of the violations are things that are already on the books – criminal law, noise regulations, nuisance ordinances, etc.  They’re things we ALREADY don’t allow people to do.  So what if we just presumed that everyone had the right to use his own property however he wanted until he violated these sorts of laws?  The renters throw a wild party until 2am?  That’s already a violation of noise ordinances.  Strike one.  They then park illegally on the street?  Strike two.  Out for a year.  But a group like my family last summer, which would most definitely not be allowed under Raleigh’s proposed ordinance, would be fine.

And that’s before we even talk about the fact that neighborhoods have restrictive covenants.  There’s absolutely nothing that prevents neighborhoods writing those covenants in such a way as to prohibit this sort of activity.  We just don’t need an overarching regulation by the city.  This is better handled at the neighborhood HOA level.

Cities should, as far as is possible, preserve the rights of property owners to use their property however they see fit.  Leaving this particular issue to provisions that already exist – criminal law, noise and nuisance ordinances, and HOA covenants – would do just that.

Julie Tisdale is City and County Policy Analyst at the John Locke Foundation. She studies the effectiveness of local spending and tax policy. Before coming to the Locke Foundation, she worked at the Centre for Civil Society in New Delhi,… ...

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