Two types of STRs.

Our research shows communities typically put short-term rentals in one of two buckets: (1) homes that exist primarily to house residents (aka owner-occupied) and (2) investor-owned properties that exist to be rented. With the rise of Airbnb and VRBO, communities around the country have seen a shift in their housing supply towards investor-owned short-term rentals. Residents find themselves competing with investors for properties in residential neighborhoods. It’s not surprising investors generally outbid residents.

There are countless examples of places with stricter rules for investors and more relaxed ones for owner-occupied STRs.

In 2018, after seeing investors buy large quantities of housing units, Boston passed a ban on investor-owned STRs. Mayor Walsh said the city’s goal “has always been to responsibly incorporate the growth of the home-share industry (…) to create affordable housing for all by striking a fair balance between preserving housing while still allowing Bostonians to benefit from this new industry.” Today, only owner-occupied units can apply for a short-term rental permit.

On the other side of the country, Long Beach, CA, is also adopting a short-term rental ordinance that limits the impact of STRs on housing. It includes a registration process for all STRs and a cap (rather than a ban) of investor-owned STRs. Local government surveyed residents and got feedback from stakeholders before crafting a solution.

Why are there accommodations for owner-occupied STRs?

For one, allowing residents to rent their home (or a portion) can help them afford the house in the first place. Another reason is the owner is part of the community. We spoke to a company that monitors STRs for municipalities. It usually sees better compliance and fewer complaints from owner-occupied rentals, probably because owners are familiar with local ordinances and better connected to their neighborhoods.

The goal in trying to distinguish between investor-owned and owner-occupied STRs is to help solve the housing crisis – like the one on Nantucket.

Imagine if we could turn just 10% of the island’s roughly 2,000 STRs into homes. We could create 200 long-term rentals or home buying opportunities for islanders without building a single house. 

Enjoy your Sunday.

Julia Lindner
Executive Director

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