While the fourth major California city voted to ban traditional vacation rentals under 30 days and pushed to legalize Airbnb’s homesharing, the National Association of Realtors (NAR) published its 2015 Investment and Vacation Home Buyers Survey, which reported that 2014 vacation home sales were up 57.4 percent over 2013 –rising to a record level.
But as vacation home sales soared in the U.S., according to the LA Times, California witnessed a contrasting trend, with the percentage of vacation home sales falling to 5% last year from 6% in 2013, according to a tally by the California Association of Realtors.
Not so coincidentally, municipalities in California have led the charge to ban traditional vacation home rentals for less than 30 days in several cities -including San Francisco, Los Angeles, and Santa Monica -while many other cities are in the process of determining legislation regarding short term rentals.
In the rush to jump on the Airbnb band wagon, West Coast municipalities have made a series of uninformed decisions regarding traditional vacation home rentals and will likely reap long-term consequences.
Besides the massive income for the city generated from high-end vacation rental travelers, city council members do not seem to understand that people who rent vacation homes also buy vacation homes.
Money published 7 Tips For Buying a Vacation Home advises vacation home shoppers to rent a vacation home before they buy. “Before you lock yourself in, rent a place (more than once is best) in the area you’re considering to be certain you’ll actually enjoy it. Stay for at least two weeks to make sure you don’t grow bored on extended stays.”
In the Forbes article 8 Things To Know Before Buying A Vacation Home, “Don’t even think of buying a vacation home until you’ve visited the area a few times. It sounds basic, but you better be sure you simply adore and can’t get enough of that beach town, ski village, or country ranch before you commit to buying there, since you’ll be spending a great deal of your free time there in the future.”
In addition, buyers look to city regulations to find out if a city has a vacation-home-friendly environment. According the Heather Bayer in the Inman article Shift Your Mindset When Selling to Vacation Rental Buyers, vacation home buyers want to know, “What zoning and bylaws are currently in place? Is there any news pending or brewing in the media? What might impact a buyer’s potential to rent a property in the future?”
Bayer said, “The legislative impact on vacation rentals is significant, and in-depth knowledge of what a specific location allows or restricts is essential.”
Even Airbnb, who initially lobbied for laws in California which would restrict non-owner-occupied vacation rentals in these municipalities, is now looking for ways to work with and profit from traditional vacation home rentals. Behind the scenes, Airbnb has been actively implementing technology integration with software providers in the traditional vacation rental space to allow real-time booking and content updates for non-owner occupied vacation homes. In addition, Airbnb has joined the Vacation Rental Managers Association (VRMA) and is currently listing a significant number of professionally managed vacation homes on its site.
With vacation home sales dropping in California and with lobbyists from Airbnb shifting their position, city council members in California are likely to find themselves standing alone holding the bag when the numbers come in and the vacation rental debate matures.