Rapid technological advances that have made it easier for buyers and sellers to transact directly have disrupted numerous industries and unlocked massive untapped economic potential in recent years.
At the same time, housing advocates have argued that short-term rentals are contributing to the worsening of the rental housing shortage in large cities where rents are climbing, and vacancy rates have remained persistently low. The STR units, they argue, could be part of the long-term rental supply.
The new regulations restrict STR to principal residences, meaning that investment properties cannot be used as STRs. Homeowners and renters are allowed to rent up to three bedrooms in a dwelling for an unlimited number of nights in a year provided a single booking must be of less than 28 consecutive days. An entire home may not be rented for more than 180 nights in a year.
Already, companies such as Seattle-based Host Compliance are offering their services to municipalities to assist regulators with enforcement. The company is already working with 300 cities in North America, including 23 in Canada. Regulating STR has been a challenge across the globe. Regulators from Christchurch to St. Louis are struggling to determine the scale and scope of regulations. If regulations are too restrictive, they will pre-empt innovation in and disruption to a business model that has not evolved over centuries. If they are too lax, consumers and the larger public might be adversely affected.
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