Vacation Rentals: A Roundtable Discussion

In Asheville, it’s hard to ignore the phenomenon of vacation rentals. Many of us residents use services such as AirBnB when we travel. At the same time, there’s concern that the rapid growth in popularity of vacation rentals may have ill effects on our own city where we live.

Within Asheville For All, the question seemed to keep coming up: what does the growth in vacation rentals have to do—if anything—with Asheville’s housing crisis? So we gathered our three Lead Organizers for a roundtable discussion about it.

While they certainly don’t agree on all of the details surrounding vacation rentals and their effects, they do all agree that discussing the matter is inextricable from acknowledging the region’s housing shortage and the need to build all kinds of housing types for all kinds of families, to meet the demands of longtime residents, and newcomers. (And maybe the demands of visitors too!)

A note on terminology:

We followed the language that the city uses in order to differentiate short term rentals (in which an entire home, whether a house, apartment, or condo unit is rented) from homestays (in which part of a home, such as a room, a basement or other level, or a garage is rented). Both fall under the category of vacation rental as they are rented for less than 30 days.

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Do you think that Homestays (part-home vacation rentals) and Short-Term Vacation Rentals (whole-home vacation rentals) are good or bad for Asheville?

Andy:

In 2017, I was living in an apartment on Robindale Ave. in North Asheville, and the tenant in the unit next to mine decided to move out and sublet her place on AirBnB. (Incidentally, this was explicitly forbidden in our leases.)

I hated it.

The building was an old converted house, and the front doors to our two units were close to one another, and both let out to a nice wraparound porch. So nearly every night, there’d be a loud group of people hanging out right outside my door.

As the night would wear on, I would inevitably tell the group to keep it down, and often they would acquiesce. But the next night, or the next weekend, there’d be a different group. It felt Sisyphean—there was no memory, no history, to the social relationships in my building.

I don’t think short term rentals—and really my beef is with whole-home vacation rentals—are a categorical, unambiguous evil, and I don’t think it helps to say that those who participate in the “AirBnB economy” to make money are engaging in a moral wrong. But I do feel certain that that the AirBnB phenomenon—if not the company itself—is doing well more harm than good in Asheville right now.

I’ve read reports in European cities of entire neighborhoods being emptied of long term residents because of AirBnB. As a result, these neighborhoods have changed overnight. For example, grocery stores have shut down—replaced with more tourist friendly businesses like bars and gift shops—leaving the few remaining residents without a place to get groceries.

In Asheville, the change may be smaller in scale. But I’ve known people that did live downtown in loft apartments, and they were witness to the changes that the increase in short term rentals brought to their blocks. Their experiences mirrored my own.

And of course we have to talk about the housing shortage. Asheville is seeing historically low vacancy rates in both rentals and owner-occupied homes. So I’m not here to say that whole home rentals would be bad in any situation—even if Asheville had a surplus of apartments to rent and houses and condominiums to buy.

But at this time, in this place, the idea of taking homes off the table for people to live in, just so that people can use them to make income from vacation rentals, this is bad for Asheville.

Scott:

Being asked if something is “good” or “bad” usually leads me to a response of “it depends” if it’s a subject with a spectrum of nuances. Still, for the purposes of this discussion, I’m offering the following “yes” and “no”  responses.

Home Stays (part-home vacation rentals) are good for Asheville because they offer a compromise between property owners, neighbors, and visitors/short-term renters on the use of private property for lodging/short-term housing.

Property owners are given short-term rental income opportunities if they can operate a part-home Home Stay. Under the current City’s current regulations, neighbors benefit from the requirement that a Homestay occur within a “resident-occupied dwelling”. In theory, with a  permanent resident onsite, they can more immediately police noise and other nuisances while a whole-home vacation rental’s nuisances require neighbors and/or City code enforcement. Visitors benefit from a broader range of lodging options than hotels, sometimes at lower prices and greater amenities like kitchens and pet-friendly settings. Short-term renters benefit by having access to a housing option that offers flexibility (i.e. lease-length, rent cost) over longer-term apartment and house rentals (i.e. 6 or 12-month leases).

Short-Term Vacation Rentals (whole-home vacation rentals) are potentially bad for Asheville because they effectively remove housing units from the larger housing supply. As contrasted with resident-occupied Homestays above, whole-home vacation rentals are simply harder to police for noise/nuisances - neighbors shouldn’t be put in the position of “Noise/Decency Police”, and the City doesn’t have staff for this type of code enforcement.

John:

I agree with Scott that it’s hard to say whether vacation rentals are “good” or “bad”. They’re not so amazing that we should be subsidizing them, but they’re also not so bad that we should ban them. There are all sorts of things in this world that we neither mandate nor make illegal. Maybe you shouldn’t eat a cheeseburger and fries every night for dinner, but, at least in America, the choice is up to you.

Which brings me to Andy’s point about noise. I would say that this is the one complaint about Airbnbs that I empathize with. This might sound libertarian, but, for me at least, it comes from a place of liberal tolerance: you should be able to do whatever you want as long as you’re not harming other people.

I don’t know of any data showing that vacation rentals violate noise ordinances at a higher rate than other dwellings. It’s possible, and I wouldn’t be surprised if they generate more noise complaints, but there’s an important distinction there. You don’t notice your neighbors 95% of the time, and, most of the time, even when you’re mildly annoyed, you would never consider making a formal complaint or feel that one is justified. Like, there are dogs in my neighborhood whose barking is sometimes annoying, but I doubt it violates any noise ordinance, and I’m not going to suggest that we ban dogs from residential areas. Even something as mundane as windchimes can be obnoxious in the right situation.

If you’re inclined to be annoyed by Airbnbs, then you’re going to notice when guests are talking at elevated volume at 11 PM even if they’re not being loud enough to break any rules. You don’t notice when they’re out hiking or having dinner downtown, and this is true of neighbors too. I’m a night owl, but people mow their lawns or blow their leaves at 8 AM. Our neighborhood is currently FULL of Christmas decorations, and they’re not all to my taste. It’s all fine! I just deal with it. The fact that the existence of other people is sometimes mildly annoying is not enough justification to ban short-term rentals.

It is of course true that groups of twenty-somethings will rent places on Airbnb to spend the weekend (I’ve done this myself!), and I’m sure they get a bit loud at times. What most people don’t realize though is that this noise is not inevitable. It’s a product of old buildings and bad building codes.

When I lived in newer apartment buildings in DC and northern Virginia, you never heard your neighbors unless they were being exceptionally loud. Later, living in an old building in Fredericksburg, VA, I could hear my neighbor’s dog walking in her unit. Not running or barking, just walking on the wood floor. Now, living here in Asheville in a townhouse built in the ’70s, I can hear people talking next door even at moderate volume.

Old buildings leak noise like a sieve, and modern buildings don’t (at least when building codes require suitable soundproofing). To the extent that noise is a problem with vacation rentals, the fundamental issue is that our housing stock is old. It’s true in Asheville and a lot of other places too. We don’t build enough new housing and fail to replace our old housing, and so we deal with issues like subpar soundproofing and insulation as well as buildings that are not accessible to those with disabilities.

I don’t mean to sound dismissive of Andy’s point because I do think that guests in vacation rentals sometimes being too loud is a legitimate thing to complain about. For me though, the root cause is bad public policy, and we should start there rather than play whack-a-mole with the downstream problems. Noise issues are exacerbated by old buildings, and the reason there are so many vacation rentals mixed in through residential areas is that we banned the construction of new hotels in places where they made sense. To Andy’s point about vacation rentals reducing the supply of available homes, this wouldn’t be a problem if Asheville’s zoning policies allowed for sufficient construction of new housing.

So is there anything good about vacation rentals? As Scott mentioned, there are certain situations where vacation rentals work better for people than hotels. Although there are hotels that have amenities like kitchens and laundry facilities, these are much more common in vacation rentals. The number of times I’ve brought leftovers back to a hotel and then gone to heat them up the next morning only to realize there was no microwave is too damn high. I’ve also heard from parents of young children that the ability to do some laundry if needed is really handy. Scott specifically called out the fact that some vacation rentals are pet friendly as well as the potential to do a longer stay that falls short of a typical lease. I have personally had five Airbnb stays of a month or more, one of which allowed my wife and me to apartment hunt in an area where we weren’t currently living. It’s good that these options exist for people!

Homestays especially have a lot of potential because, as Scott pointed out, there’s someone else on the property who can regulate noise issues (and dissuade raucous parties in the first place). Plus, letting people rent out their basement or a backyard ADU puts money into the pockets of local residents.

If we were to ban short-term rentals, the demand would flow to hotels, but there aren’t currently enough hotel rooms, so rates would go through the roof. This windfall would flow to international hotel chains, not local residents. Also, I’m going to save this for later in our discussion, but I want to make the case that tourism is good actually, which means that banning vacation rentals would definitely be bad in the short term.

What (if anything) should the city do about vacation rentals?

Scott:

There are two basic approaches to the regulation of anything (see below). I’m a fan of Approach #2, below.

Approach #1: Ban, Penalize, and Fine

Approach #2: Legalize, Regulate, and Tax

If our TDA enabling legislation can be reformed to allow a more direct nexus between occupancy tax and revenue for local government needs vs. TDA advertising, that’s a conversation worth having. The City and County should definitely focus on making sure Short-Term Rentals (being used for vacation rental purposes, but not for non-vacation short-term rentals, i.e. traveling nurse, construction contractor, etc.) are paying Occupancy Taxes in the same manner that hotels, etc. are doing so.

John:

Yeah, I think it’d be better to keep vacation rentals as an option while ensuring they’re paying their share of taxes.

As we talked about earlier, vacation rentals are a good choice for certain situations, and they put money in the pockets of local residents. Homestays especially are nice since the presence of a resident should minimize noise issues.

I’m almost tempted to say that we should encourage homestays as part of a broader push to increase the construction of ADUs (basement/backyard/whatever). If you get enough built, it’ll keep prices and occupancy rates low enough that some owners will choose to use them for long-term rentals (or family) rather than vacation rentals. This has the potential to provide a good source of less expensive housing close to downtown, which is sorely needed.

The other piece of the equation is increasing the supply of hotel rooms. If you only have enough hotel rooms for half the people who want to come here, prices will be high, and it’ll be profitable to take housing that would otherwise go to long-term residents and use it for vacation rentals.

Lastly, this wouldn’t be an Asheville for All discussion if I didn’t suggest that we should legalize the construction of more housing. It’s the lack of housing that makes it expensive, and I doubt very many people around here would care about vacation rentals if it weren’t for the fact that our housing costs are so high. There’s plenty to say on this topic, and I don’t want to get us off track, so I’ll just make one point. Right now, outside of the core downtown area, Asheville is not very dense at all. You could easily add a ton of housing to West Asheville (where I live) without building anything particularly tall. It’s a lot of single-family homes, many of which are pretty modest, so allowing things like duplexes, townhomes, etc. could get you double (or more) the number of residents without changing the feel of the place.

Andy:

First, it’s worth saying that the city is constrained in some ways by the state government when it comes to regulating vacation rentals. It’s also worth saying that the city has made moves to restrict the growth of whole home STRs.

It’s also worth saying that all of this can be very confusing. According to this city website, there are no more whole home STR permits allowed in the city, except in districts with “resort” zoning, and places designated as much seem to be almost non-existent.

It feels to me that the city hasn’t done a great job communicating this fact—that by city ordinance, whole home AirBnB’s are effectively no longer allowed where they don’t exist already. But I say this with a grain of salt; I’m sure that it’s difficult to get the word out without aid from the media, and I have certainly seen cases where even when local government officials do try their hardest to communicate something, sometimes bad faith actors will still misrepresent the reality of the situation.

But recently I’ve even seen real estate listings where new townhomes and condominiums are listed with descriptions that entice potential buyers to use the property as a whole home STR. Are the realtors knowingly contradicting the city’s ordinance? Or is there some loophole that the city isn’t being clear about? I don’t know. And if it gives me room for doubt, I can only imagine what Ashevilleans not informed of housing policy might take away from seeing these listings.

Adding to the confusion is a website called Inside AirBnB. It’s my understanding that this website has some accuracy issues. First, it may include homes that are rarely, or no longer, rented. (There is a setting that allows you to choose only recent and frequent listings, but this is not easy to find.) More significantly, it’s my understanding that the website considers some rentals to be whole home STRs when the city might define the same rental as a home-stay. (An example of this would be a basement in a house with its own separate door.)

I’m not necessarily interested in downplaying the degree to which AirBnBs pose a problem, and I have no dog in the fight as to whether Inside AirBnB is accurate or not. But I do think that some of the more unhinged takes around short term rentals might be mitigated if people had a more accurate sense of both the scale of the problem, and the steps that the city has already taken.

But I haven’t answered the question! What do I think the city should do?

First, the city should keep doing what it’s doing. I don’t see any need to allow more whole home vacation rentals at this time. Maybe in the future it will make sense to permit more of them again—I don’t know.

Second, the city should seek ways to mitigate the housing supply crisis, which is arguably the biggest factor in Ashevilleans’ anger over short term rentals. That means aiming for housing abundance. And specifically, it means ending exclusionary zoning, making it much easier to build “missing middle housing” throughout all of Asheville, extending the “urban centers” zoning overlays into more parts of the city, and allowing taller residential and mixed-use buildings in neighborhoods that are close to jobs and transit.

What do you think is currently missing in the conversation in Asheville around vacation rentals?

John:

When it comes to vacation rentals, people tend to focus narrowly on the short-term rental of Airbnbs in residential areas, but it’s worth zooming all the way out to think about tourism in general.

Asheville can’t just get rid of the tourists. First of all, we’d have to rename our baseball team. More seriously though, we can’t support all these restaurants and breweries with only local residents. I mean I’m up for trying to drink all that beer, but I suspect that, as a town, we’d end up poor and hungover at the end of it.

And it’s not just the restaurants and breweries of course. There are tubing rentals on the French Broad and bike tours of downtown. There are all sorts of shops, selling everything from chocolate to local art, and the patrons are definitely not 100% local.

All this activity generates both jobs and sales tax revenue, and that sales tax revenue funds things like local schools. I’m sure public officials are aware of the financial implications of tourism, but I doubt many people, public officials included, consider the impact on local amenities. We have larger and higher quality restaurant and brewery scenes than comparably sized cities, and this is enabled by tourism. The alternative would be to become poorer and have fewer amenities or to become some sort of tech/financial/industrial/whatever hub with a much bigger population.

If we’re going to have tourism, then we need places for people to stay. We could do that exclusively via hotel rooms, exclusively via homestays/short-term rentals, or something in between, but there has to be something, and I don’t see any reason to categorically exclude homestays/short-term rentals. Sure they have their downsides, but, as we discussed earlier, there are also a lot of potential benefits, both for residents and visitors.

Andy:

I completely agree with John that a discussion about the question of vacation rentals is inseparable from questions about housing and tourism too. (I do know there’s a whole discussion going around right now about the baseball team’s future though, so maybe we’ll put that aside!)

It’s worth reiterating some points here. Tourism isn’t going away, the city’s population is going to grow—and population growth is a marker of a successful city or region. And mobility is a good thing. The higher that vacancy rates are for owner-occupied homes, rental homes, and lodging, the more people can move around, generally speaking.

But above all, I’d like to take this opportunity to jump on the hotel question, which we tend to talk about in Asheville as distinct from the housing problem, and we also fail to connect to the matter of vacation rentals.

Dare I say it out loud, I am pro-hotel. Hotels make efficient use of land—certainly more efficient than vacation rentals in single family homes. They are taxed as commercial real estate, so they bring more money into local government coffers than AirBnBs. They are easier to regulate than vacation rentals. (You might have heard those horror stories about AirBnBs with hidden cameras; I think it’s safe to assume that this is less likely to happen with hotels.) And arguably, hotels are less likely to discriminate based on race. Plus, you don’t need to clean up after yourself or switch on the dishwasher before you go.

This thinking about hotels goes against the dominant grain in Asheville, where residents are stridently anti-hotel. But just as we need more residential housing to keep up with demand as Buncombe County’s population grows (along with the rest of the country), so do we need more lodging options as demand grows among visitors. And just as housing scarcity increases the opportunities for speculation, commodification, and displacement, so does scarcity in lodging have negative spillover effects too; ones that will hurt locals along with visitors. (Personally, I’d love it if my family didn’t have to pay as much for a hotel room when they came to visit me!)

Incidentally, I think it’s quite likely that the “ban” on hotels in Asheville had some kind of effect on the growing AirBnB market here.

So I probably come down a bit more against vacation rentals than John and Scott. But to say that we should reduce their numbers without talking about where that demand from visitors will go is folly—it’s an example of what I like to call “magical Asheville thinking.” And it’s the same kind of thinking that rejects housing abundance as a solution to the housing scarcity crisis.

And finally, just to bring this full circle, it’s the same kind of thinking that’s reflected in the contradiction in which residents are outraged at the role of AirBnB in taking housing supply off of the market, but at the same time they’re obstinately opposed on the question of whether Asheville might need to change a little bit to allow for more infill and density—which would bring that same much-needed supply of housing.

(I do believe that it’s the city’s role to decide what constitutes “good form” when it comes to hotels. The question shouldn’t be whether to ban them or not, it should be: what do we want them to be like? Do we want to require retail space on the ground floor, for example?)

Scott:

The topic of allowing Accessory Dwelling Units (ADUs) to be used for Homestays/Short-Term Vacation Rentals has come up before (here and here in 2016), but it’s currently missing in the conversation around short-term rentals.

Allowing ADUs to be used for short-term rentals seems like it could be a “third-way” compromise between “Homestays are good” and “Short-Term Vacation Rentals are bad.” If you’re a property owner considering building an Attached ADU (i.e. basement or attic conversion, or addition to existing house) or a Detached ADU (i.e. stand-alone building in side or rear side of property), having the following three use-options could incentivize you to build an ADU:

• Use-Option #1: Use the ADU as a non-rental guest house. Got some friends or family visiting for a weekend or a month? There’s an ADU for them.

• Use-Option #2: Use the ADU for short-term vacation rentals. If you, or a tenant, constitute a “resident-occupied dwelling” in the main house, you can boot bad Air Bnb guests (and leave them a BAD review on their Air BnB profile).

• Use-Option #3: Use the ADU for short-term or long-term rentals for non-vacation tenants. Perhaps someone’s newly moved to Asheville and trying to figure out neighborhood or longer-term housing preferences; they can rent an ADU. Utility contractors and traveling nurses may need something less expensive than a hotel and shorter-term than a 6-month lease; they can rent an ADU.