Letter to the Editor: When it comes to short-term rentals, let the sharing economy, homeowners thrive

Photo by BrianAJackson/iStock/Getty Images Plus, St. George News

OPINION — Financial struggles too often lead to the end of what is considered by many to be part of the “American Dream” – homeownership. The opportunities that sometimes present themselves to allow us to continue living the dream of owning a home should be encouraged and protected.

One such opportunity is short-term rental services like Airbnb and VRBO.

Take Sue Fullmer, a widowed Utahn, as an example. After her husband passed away and her six children moved out, her single income was not enough to make ends meet. She had to depend upon her children to pay the bills each month. Then she discovered the opportunity to rent out some of the extra rooms in her home.

Short-term rentals allowed Sue to keep her home and gave her back the financial independence she craved and allowed her to pay her bills by herself for the first time in over three years. You can imagine how good that must have felt.

Sue is one of many Utahns who have begun to participate in what is called the “sharing economy.” Other examples include Uber and Lyft, local delivery services, garden sharing, and crowdfunding. The reality is, this type of economy has always existed and the internet has merely made it easier to participate in it.

Boarding houses and “room for rent” signs could be found in American communities for hundreds of years – and in recent history some cities have decided to impose tight restrictions or bans on these types of services.

Many city governments in southern Utah are heavily opposed to residents being able to share their homes in this manner. St. George has effectively declared an all-out war against those looking to supplement their incomes by temporarily renting out extra space.

These cities apparently see a long-term renter (over 30 days) as somehow different from a guest who stays for a few nights. What these city officials fail to understand is that private, short-term rentals cater to an underserved market segment.

Modern day travelers can feel constrained by a market where their options are limited to commercial hotel and motel rooms, which are often clustered in specific areas and lack the feel and warmth of a home environment.

They often desire a more community-enhancing experience by getting to know their host and becoming friends. Also, commercial rooms are also usually priced within a specific, consistent range, leaving few options for cost-conscious consumers.

Additionally, most commercial options do not necessarily serve families well; families might prefer an extended stay in a venue that permits cooking and other activities more akin to a home than a hotel. These are all features that the sharing economy provide – unless outlawed by the city, that is.

Opponents argue that the problem with short-term rentals lies in their potential negative effect on property values and the disruption of a quiet community. They claim that short-term rentals inevitably lead to late-night parties, an undesirable amount of cars parked in the street, and excessive noise.

The problem with this argument is that each of these possible outcomes already violates an existing law in most cities. Cities shouldn’t heavily restrict or outright ban short-term rentals, but should focus on actual nuisances, whether it’s a renter or a homeowner.

Stephen Palmer, a St. George resident who was renting out his basement without incident before being threatened with fines by the city, provides an excellent counter example.

“The mayor lives two doors down from me and he never had any clue.” When Mr. Palmer inquired whether the mayor felt that his property values had been affected by the short-term rental or if he felt it was a nuisance, the mayor responded in the negative.

Last year, a bill was sponsored in the Utah legislature to prohibit cities from fining and charging its citizens with a crime, simply because a listing existed on a short-term rental site like Airbnb. The law change would only apply if the home was also occupied by its owner, eliminating vacation rentals.

St. George led the opposition against this bill, rallying other cities to fight it. In the end, the bill failed to protect property rights after being watered down at the behest of the cities.


Read more: ‘Watered down’ short-term rentals bill moves to Senate floor


Instead of protecting incumbent industries and squashing innovation, we should encourage people to use their resources wisely in order to improve our economy.

People like Sue Fullmer, who are struggling in this economy, should be allowed to lift themselves up.

Sue summed it up perfectly by saying, “All I’ve ever wanted is to be able to take care of myself and be a contributing member of society.” City laws should let her do exactly that.

Submitted by MICHAEL MELENDEZ, director of policy for Libertas Institute, a free market think tank in Utah.

Letters to the Editor are not the product of St. George News, its editors, staff or news contributors. The matters stated and opinions given are the responsibility of the person submitting them. They do not reflect the product or opinion of St. George News and are given only light edit for technical style and formatting..

Email news@stgnews.com

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Copyright St. George News, SaintGeorgeUtah.com LLC, 2018, all rights reserved.

 

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15 Comments

  • bikeandfish September 7, 2018 at 4:32 pm

    There are arguments for sharing economies but the resistance against the ones named is ignored by the author. We as homeowners and workers are tired of our communities being upended by organizations making tons of money off a blatant disregard for existing policy. Look at Uber that he mentioned. It wasn’t designed to help those in need nor is it doing so. Its destroying lives and careers of hard working drivers. Its not providing remotely viable income.

    Or how about Air BnB. Did they design a monel focused on working with zoning and communitiy policy? No, they intentionally grew a model built on the fact that its easier to ask for forgiveness than permission. Not to mention they are exacerbating the national housing crisis.

    The fact is local resistance is libertarian. Its at the local level that we are empowered to design communities that fit our needs. And the irony is its local, citizen resistance going up against vested interest and venture capitalist who truly have no interest in individual needs who making obscene profits off the “sharing economy”.

    • kendallclements September 8, 2018 at 9:16 am

      Uber is breaking the back of organized crime . . . I mean labor. In NYC, to get a taxi medallion can cost over a $100,000. Uber/Lyft and other interupters have successfully made tons of money for the individual.

      Hiding behind the concept that enterprise is possible only through the rules of government policy is too close to socialism. Here in St George people used to make the argument that IF we allowed more nightly rentals the Hotel industry would suffer and collapse. Guess what – its thriving too. We’ve seen more hotels built in our greater St George area in the last 10 years, since the emergence of the sharing economy, than ever before.

      The national housing crisis is an issue, but it is softened IF people can rent out their individual rooms. St George city for years banned that practice too. It was changed because people broke that ordinance too. We had to force the city to recognize through the courts to change. FACT: Government is not the solution here.

      IF the government would allow a person to build a tiny home on their .2 acre lot, and rent it to a young couple/family, the housing crisis would end in about 90 days and the price of housing would normalize. The problem is government wants to regulate a free market in every detail that it stifles innovation some times.

      Lastly, you mention ‘obscene profits’. What you see is CASH FLOW. Most people renting an airbnb are not making any profit. What they are doing is increasing CASH FLOW. Cash Flow is good – it is very good. It is the redistribution of wealth of FREE PEOPLE. Cash flow is when a widow or individual rents her room out to make $20. When cash flow when 1,000 people do it, without the blessing of big government, that socialists call it ‘Obscene’ because they see $20,000 being distributed freely without the wasteful collection/expense of government. Silly socialists.

      Socialists don’t like cash flow because they only see government redistribution of wealth, not private distribution of wealth, as good. They love to see taxation and limited power of people.

      • bikeandfish September 8, 2018 at 2:30 pm

        You are the only one who brought up socialist, they have absolutely nothing to do with this conversation.

        And no, its not just about “cash flow”, its also about corporate revenue (i did say incorrectly say profits incorrectly). Uber’s revenue jumped drastically in 2017. And private corporations like this can operate at loses for quite a while given their venture capitalist supporters. And doing so is to an advantage as its a brilliant tool at destabilizing existing markets. That can’t be denied in any fashion in the Bay Area. The two small cab companies I know drivers for (independently owned and making a profit before Uber) are down to 40% of their historic revenue. They will be bankrupt within two years. That is Uber’s goal.

        Airbnb….generated revenues in excess of $2.6 billion last year and a profit of $100 million. They are valued at $38 billion. Several studies have shown they play a direct role rapid house price appreciation and therefore traditional housing costs.
        Great for some owners but not great for the millions of Americans being locked of first time home ownership because of that same rising cost.

        And its rarely about the widows. Its about property managers like you.

        I’m not fundamentally against short term rentals. I just believe it needs to happen because concerted, thoughtful local planning that takes into account what the local community wants. But it’s happening at the current pace because of massive corporate disruptors seizing an opportunity. And make no mistake, these venture capitalist funded sharing sites and software don’t care one bit about the local driver or home owner. They care about how big their share of the pie is when they go public.

        PS….have you ever met an Uber driver in most areas? Their “cash flow” from driving is minimal. In 2017 the monthly average was $364 a month ($160 median) after sales tax and commission. But that doesn’t include the massive self-employment tax given Uber treats them like independent contractors. Nor does it include the extra overhead of the insurance burden (Uber’s supplement is laughable). The entire system is designed to minimize responsibility for the company at the expense of the driver. And this all comes at the cost to professional drivers who use to be able to make a livable wage. Its displaced thousands of traditional, middle class jobs (most of the drivers didn’t medallions, they could just lease them for the vehicle they are driving).

  • Kilroywashere September 7, 2018 at 8:17 pm

    Do your homework! Go watch a few YouTube videos and you will see how honky dory your opinion piece is. There are horror stories about the airbnb next door. Lots of them posted online. Let’s have strangers vetted by a global conglomerate in the neighborhood, it will generate $$$$$. Bull hockey! You could have MS13 Gang Bangers for the weekend hang out. Nancy Pelosi wouldn’t mind. Santa Clara City Council this is a special message for you. Don’t sell out the neighborhood.

    • kendallclements September 8, 2018 at 8:50 am

      There are, statistically, more ‘violence’ or ‘horror’ stories with your full-time neighbors than with the sharing economy or vrbo/airbnb community. There is not an increase in crime. Police calls do not increase because of the length of stay.

      Take our own local areas that have nightly rentals – like Sports Village. FACT: There are fewer (almost none) call outs to this community as compared to the city as a whole.

      Can problems occur? Yes. The author pointed out that these disturbances can be policed under existing laws and ordinances. IF 99,999 vrbo/airbnb stays occur without incident, why not focus on the one that is a problem with the specific law that person violates rather than ban or criminalize the whole?

      The real root is like two crabs in a bucket. One sees the other making progress and pulls them down because they can.

  • Shorm September 7, 2018 at 8:42 pm

    I get the sob story of the widowed woman, I do. But short term rentals aren’t her only option. She could get long term roommates (safer), or downsize.

    • kendallclements September 8, 2018 at 8:56 am

      Actually, long-term roommates situations are more risk to a home, community and home owner in this situation. As a property manager we have units that work successfully this way, but the wear and tear on the home is much higher. Conflicts of personality types are greater. This is why these types of contracts are always 30 day month-to-month so we can move the problems out faster

      Downsizing is a problem. If shes been in the home 20 years, sells it. She can’t replace it with an affordable option. Right now, the cost of housing in St George is out of balance. She’d have to move to the other side of Zion National Park to find affordable housing. She’d give up her social network of friends, neighbors and near by family – not always perfect solution.

      Enabling people to be more self-sufficient where they are is not a bad solution.

  • PogoStik September 8, 2018 at 12:51 am

    Will destroy or weaken the neighborliness of neighborhoods.

    • kendallclements September 8, 2018 at 9:28 am

      PogoStik – not sure I understand your comment. Too few words used to convey much thought here. Please elaborate.

      Every nightly rental subdivision in our area holds its value, even in a down market cycle. The units are built with higher quality. The communities are maintained above community norms and are always clean with less crime.

      I have vacation homes in the Dixie Springs area that long-term neighbors don’t even notice. We operate about 10 units out there. In the last 3 years and near 3,000 guest stays we finally had one issue where police were called. We engaged the guest before the police were called too. Not a bad ratio.

      The nice thing is the idiot guest that caused the issue checked out the next morning and left. Quick solution to a problem. NOTE: What he did was went next door at 10 pm and asked if the neighbors had any more beer he could buy. Not smart, certainly un-cool, wasn’t violent, but this too was not a Ms-13 gang issue that one subscriber made.

      • PogoStik September 8, 2018 at 3:14 pm

        We live in Paradise Canyon off Snow Canyon. We had an incident where a weekend group rented and trashed the home during their two night stay. Carpets had to be replaced, some wall board damage repaired. We can pretty much tell who the short term renters are by their actions. This spring we observed a car zooming around our streets with a man laying on and hanging onto the roof rack. He was either drunk or extremely stupid. I thought for sure we would see a tragic ending to that. Short term renters als seem to bring their toys (motor cycles, 4-wheelers, etc.) with them and make noise well into the night. Our neighborhood has 3 swimming pools. Owners are suppose to accompany any guests, but the rental owners evidently just leave the pool key. Hence, the pool areas always seem to be left in a mess.
        Short term renters simply don’t care about the property and neighborhood they rent in. After all they will just leave after their brief stay. We have commercial hotels and resorts that are setup to handle short term rentals. Have you talked to you neighbors about who you might be allowing into your neighborhood? I’ll be you’ll find that they are not too happy about your commercializing of there neighborhood and real estate investment in a home.

  • Kilroywashere September 8, 2018 at 2:28 pm

    Dear Kendall, not all neighborhoods are created equal. Some are more conducive then others especially if they are gated and have associations to monitor issues. Likewise not all people that rent for profit, i.e. landlords. . are concientious like yourself, and simply dont give a damn who they rent too, as long as they make a buck. This is especially true for lower end properties as you know. As far as my MS13 sarcastic comment, may seem far out to you in this regard, as recently as just a week ago law enforcement showed up near midnight less then a block away from where I live, after a good samaritan ex law enforcement driving by, reported a women being beaten at against the fence at the local school. It was a tense moment for all the neighbors witnessing the event as another car showed up with 2 strangers trying to intimidate the brave female police officer before back up arrived. Same renters made horrific headlines in SG news after incident on thanksgiving night last year. Shall I go on about their pitbull wandering stray through the streets, or the time their chickens were running wild as well and Animal Control had to show up. How about you moving and living next door to these folks. The landlord apparently doesn’t care .

  • bikeandfish September 8, 2018 at 2:47 pm

    It doesn’t take much of a Google search to realize why Kendall Clements is for these business proposals. When you cater towards second+ home owners it skews the reality of the average home owner and their needs/values.

    The crab metaphor is cute. But the reality is fewer Americans are holding onto the middle class and its basics like home ownership (per capita). They aren’t socialist crabs trying to hold businessman like him down. They are barely grabbing their own needed resources at this point. But nice attempt trying to make them/us out to be a villian. I guarantee that won’t help garner the support you need to increase you already quality “cash flow”.

  • Kilroywashere September 8, 2018 at 4:28 pm

    Good follow up B&Fish. You are a class act.

  • Joshua September 8, 2018 at 11:27 pm

    I wish people would make a clear distinction between someone renting out a room or part of their primary year around residence(owner occupied) who’s their st all times to monitor guest behavior/activities and investors buying houses for the sole purpose dedicated vacation rentals

    • bikeandfish September 9, 2018 at 9:27 am

      I think that is a critical distinction.

      I do think doing so on a regular basis warrants a conversation about zoning but I’m less concerned about it in the long run.

      But say, placing a nightly rental that isn’t owner occupied into an R-1 changes the neighborhood.

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