Regulatory Context Weekly (40)
The essential guide to the latest regulatory news and trends shaping the short-term rental landscape.
🚨 Top Stories This Week 🚨
🎲 Clark County, NV: Licensing Backlog Reaches Breaking Point
The short-term rental (STR) licensing system in Clark County has more than 600 applications waiting in its backlog. To date, only 64 of the 831 applications have been approved, leaving the majority of applicants stuck in uncertainty. This bottleneck is exacerbated by a lottery system and stringent distance requirements, causing a ripple effect where one approved or denied application can impact several others.
💼 Narragansett, RI: Judge Pauses New STR Regulations, Citing State Interests
Superior Court Judge Sarah Taft-Carter has temporarily blocked Narragansett’s plan to limit STR licenses, ruling that the town’s regulations could harm the state’s broader interests in tourism and economic development. This decision throws the town’s new rules into uncertainty until the case is concluded.
🏡 Scottsdale, AZ: A 30-Fold Surge in STR Citations
Scottsdale has seen a dramatic spike in short-term rental-related citations—738 in one year, compared to 25 the year before. The bulk of these violations are related to nuisance parties and unlicensed rentals.
🏔️ Summit County, CO
After a federal court dismissed their initial case, Summit Resort Homeowners have taken their fight against local STR regulations to state court. The lawsuit argues that Summit County’s rules violate the Colorado Constitution’s protections for property rights.
🛑 Burbank, CA: City Upholds Full STR Ban Amidst Rising Tensions
After a contentious meeting, the Burbank City Council reaffirmed its citywide ban on short-term rentals. Citing the impact on long-term housing availability and neighborhood stability, the council rejected proposals to ease restrictions, opting instead to explore increased fines and penalties for roughly 400 unpermitted rentals operating in the city.
🌎 Regional Highlights
California
🌲 Pacific Grove, CA: The city is considering a hefty fine increase—up to $5,000 per occurrence—for unlicensed short-term rentals. This proposed ordinance aims to crack down on non-compliance in a city that has long struggled to regulate its booming vacation rental market.
➡️ Key Point: For STR operators, this move signals a zero-tolerance approach that could quickly become a financial nightmare for those skirting the rules.
🔔 Dana Point, CA: Measure T will be on the November ballot, allowing voters to decide the future of short-term rental regulations in the city. The measure proposes prioritizing hosted stays, introducing a lottery system for investor-owned properties, and mandating platforms to collect occupancy taxes.
Michigan
🚫 Park Township, MI: The township is facing a legal challenge over its ban on STRs in residential areas. Plaintiffs argue that the ordinance, which restricts rentals to commercial zones, effectively deprives property owners of their rights to use their homes as they see fit.
🔍 Muskegon, MI: The Planning Commission is rethinking its approach to STR licensing. A major sticking point? Whether or not STR permits should be transferable when properties change owners. This seemingly minor detail has sparked heated debate among stakeholders.
➡️ Why It Matters: The ability to transfer licenses and permits to new owners is a fundamental part of the investment thesis for many short-term and vacation rental investment groups. Without it and the guarantee of operating legally that it brings, may impact property values for investors looking to sell rental properties.
📈 Emerging Trends
💥 Rising Fines as a Deterrent Tactic in California
Cities like Pacific Grove and Burbank are increasing fines and enforcement resources to discourage unlicensed operators.
💼 Court Battles to Define Property Rights
Lawsuits in Summit County, CO and Park Township, MI highlight a new wave of legal challenges to ordinances passed over the last 1-2 years. The core issue remains whether local governments can enact restrictive regulations that property owners argue violate constitutional property rights.
What to Watch for Next Week
📅 Palm Springs, CA: Administrative Appeals Board will meet on October 9 to discuss new proposals targeting non-compliant STRs.
📅 Grass Valley, CA: October 9 permit revocation hearings—could set a precedent for neighboring towns.
📅 Isle of Palms, SC: October 8th council is conducting a public workshop to review short-term rental data and consider a resolution against state level preemption.