Cities Look to Regulate Short Term Rentals

Most property owners can usually agree on one thing and that is they do not like regulation. Aside from political beliefs, homeowners and landlords typically do not appreciate the city or the regulating government entity telling them what privately owned real estate can be used for or what has to be done to their property.Pasadena Rentals

The first thing which comes to mind is rent control, but appearing quickly on the horizon is short term rentals.

Airbnb has quickly changed the paradigm in terms of how homes can be leased. Vacation rentals are no longer limited to resort areas, every home has the possibility to rent more frequently and for a higher price. Gone is the mandatory one year lease.

SoCal Vacation

Consider for a moment that Southern California is a very desirable place to live and visit. Also think about all of the events that bring people into the area and the increased demand for housing. One event that comes to mind is the Rose Bowl and Parade. Hotel rooms are at a premium if you can find availability.

Short Or Long Term Rentals?

Hypothetically consider Mr. & Mrs. Smith who live in NE Pasadena and have rented their home for the last 5 years. They rent it for $3200 per month. They recently spoke to their neighbors who used the Airbnb service on a recent vacation and realize they can rent their home for $300/night, and $500/night during the New Years festivities.

They are not tied to a one year lease, nor do they have to deal with tenants who will possibly pay the rent late. They have frequent access to the house and can easily decide how much of the rental/security deposit to return based upon the vacating condition of the property.

More money, less hassle, more autonomy, fewer headaches (possibly).

Seems like an ideal situation or as commonly referred to a win / win.

The Potential For Disturbance

Well maybe not so fast. The big 8 ball in this situation is the impact on the neighborhood and the residents. Tenants coming in for a short term stay may decide to invite all of their friends and be more “sociable”.

Oh what the heck, to put it bluntly, your house may have just become party central. the loud noise, strange people coming and going at all hours of the night and your neighbors have had enough.

I did a search on Airbnb for the date of March 12, and the site indicated 300+ properties available to rent just in Pasadena. As with any new process or technology, local and state government want to get involved either through taxation or regulation.

Cities such as Santa Monica have banned short term rentals, other cities are looking to regulate the number of days a property owner can rent the property, and of course other cities are looking to establish a tax on the income received.

Don’t Change That Dial

This is an issue that is just beginning to fester and we will likely hear much more about it in the coming months ahead. Personally, I think government has no business in telling a property owner what price they can collect when it comes to rent. They don’t tell McDonalds what to charge for a Happy Meal and they don’t place restrictions on other service providers. Pricing should be what the market will bear. After all we are still a capitalistic free market society if only for a brief while longer.

However, the issue of regulating real estate for the purpose of short-term rental may be another issue. I don’t know too many of my neighbors who would enjoy having a weekend party house on the block.

Aren’t residents entitled to “quiet enjoyment“? A peaceful, trouble free neighborhood does have a higher value than one where the police are called 24/7.

Here in California, we are witnessing cities become more involved in regulation and that probably will not change anytime soon. Just this month, Pasadena approved a generous hike in the minimum wage to the chagrin of many local Pasadena businesses.

In the coming months, I am sure this is an issue we will hear more about as the pro vs con participants begin to mount their defense.

And we wonder why our society has become more contentious?