Urbanists believe in the power of cities to bring people together, sparking social, cultural and economic innovation. Urbanists support dense, walkable and transit-friendly neighborhoods as the smarter and more sustainable alternative to suburban sprawl. Urbanists are willing to challenge the status quo and care deeply about issues of housing access and affordability.

Vacation rental key boxes at a Seattle multifamily building.
Vacation rental key boxes at a Seattle multifamily building.

Urbanists should also be concerned about the commercialization of short-term rentals. Without some regulation, short term rentals pose a growing threat to Seattle’s housing stock, exacerbating a housing shortage already reaching crisis levels. Without some regulation, short-term rentals could keep thousands of Seattle residents from living in our denser urban areas. When the residential zones of our city are provided for short-term tourists first and long-term residents second, our community suffers. Our workers have further to travel to get from home to work, clogging our streets and wasting valuable time.

Mayor Murray and I recently proposed new regulations that will curb the increasing commercial use of short-term rentals. The regulations do not limit the use of a short term rental that is a part of one’s primary residence, including a mother-in-law apartment or a backyard cottage; we know many Seattle residents use income from these rentals to afford their home or provide for their family and we want to ensure that benefit remains available.

If you are using a separate property as a short-term rental, however, you will be limited to 90 cumulative nights a year of short-term stays if the regulations are adopted. This limit will encourage property owners to move these units back into the long-term housing market where, especially in current market conditions, there is money still to be made. (Individual stays of 30 nights or more in duration are not counted toward the 90 night total.)

These proposed regulations focus narrowly on the commercial operators that take advantage of home-sharing platforms to exacerbate our housing crisis. We estimate 80% of short term rental operators will see no new regulations under this proposal. If you want to read more details, you can find them on the City Council’s website.

There can be a libertarian streak in urbanism, with some calling for extensive deregulation or an overhaul of basic zoning tenets, including the segregation of uses. If you don’t believe in zoning, I probably won’t convince you that these regulations benefit our city. But for the rest of you, I urge you to take a hard look at these regulations and provide constructive feedback if you don’t feel they strike the right balance.

Inevitably, no citywide policy can best meet the individual needs of every short-term rental operator. The proposed regulations attempt to recognize both the benefits and challenges offered by short-term rentals. They also attempt to focus on this issue through an equity-based lens: those looking for an affordable home in this city are more in need of supportive local government intervention than those offering their second (or third or fourth) homes to out-of-town visitors.

Finally, the proposed regulations uphold a deeply urbanist vision: existing residential units should be available for residents, allowing people to live in this beautiful city and enjoy what it has to offer.

Tim Burgess is a member of the Seattle City Council and chairs its affordable housing committee. The City Council will consider this proposal through the Affordable Housing, Neighborhoods and Finance Committee. You can sign up to receive committee agenda notifications here.

We hope you loved this article. If so, please consider supporting our work. The Urbanist is a nonprofit that depends on donations from readers like you.

46 COMMENTS

  1. If it’s more profitable to rent a unit short term than long term, even with all the extra expense, then the market is showing us that this is what people want. The success of AirBnB is a signal that there is not enough hotel space, or at least not at the right price.

    • Maybe so but given the choice between fulfilling market need of the hotel sector and real need in the residential sector, which one should we choose?

      • If we un-ban multi-family housing from 53% of Seattle’s land, we won’t have to choose. In fact, what if a market boomed for triplexes that folks who can’t afford the price of a single-family home divided into their residence, long term rental (for stability of income) and short term rental (for higher income)? Everybody wins except single family zoning fetishists.

    • The two markets are connected – they use the same resource: bedrooms. If we restrict Airbnb the unmet demand will lead to more hotels getting built, and that will crowd out multifamily development, reduce supply and drive up housing prices. In the end it’s a zero sum game.

      • Because airbnb offers such a different product at a different rate it does not significantly compete with the hotel sector. Airbnb expands the “market”, it does not replace hotel units. That’s what the SF legislative analyst office found in one of the few studies on airbnb’s impact on more traditional sectors.

        • So the tourists and other short term renters who have used Airbnb would not have come to Seattle if there was no Airbnb? Or if they did still come, where would they have stayed instead?

          • I don’t think that specific question has been studied. But please share if you find something.

          • Doesn’t the claim that it “expands the market” mean that it brings people who wouldn’t have come otherwise? If not, what does it mean?

          • It means more people/$ for short stays in businesses that record people/$. Could be that visitors previously stayed with family. But again, needs to be studied to answer your question.

          • Yes that is it. Except the study cited says *0.05%* decrease not 0.5% decrease and the report’s authors think this already miniscule impact would be even smaller in San Francisco.

          • It’s puzzling. Why would the hotel industry pushing to hard to regulate Airbnb if it has so little impact on their revenue?

          • Could be very sensitive to revenue, could be mistaken. But I’d just be speculating. There’s a lot of misinformation out there.

          • Not sure how I missed this before, but regarding the connection between the STR and traditional hotel markets, the Texas study mentioned above (also linked below) found that:

            “In Austin, the city in Texas with the highest Airbnb penetration, we estimate that the impact of Airbnb over the past 5 years is roughly 10% of hotel room revenue.”

            It’s hard to imagine how a 10% drop in revenue wouldn’t cool the market for new hotel construction, leaving more land available for apartment development.

            http://cs-people.bu.edu/dproserp/papers/airbnb.pdf

      • Your comment lead me to think about something else – the expense in converting hotels to housing.

        If we discourage AirBnB-style rentals and instead try to funnel people looking for short-term stays into purpose built hotels, we’re going to end up building more hotels to meet that demand. However, when that demand ebbs, we’ll just have a bunch of empty hotel rooms. Converting a hotel to an apartment or condo complex isn’t as simple as defining new rental terms and landing a long-term tenant.

        However, an AirBnB can easily be repurposed and put back on the long-term rental market. So it’s possible in discouraging AirBnB we’re setting ourselves up for less housing stock in the future.

        • These sorts of conversions frequently occur with ease (see previous Cornish student housing in Belltown or many old brick Seattle apartments that started out life as hotels). It just happens that hotels tend to be much more profitable and desireable.

    • I would caution against that sort of assumption. It’s worth bearing in mind that people choose Airbnb for a variety of reasons. For example, someone may simply want a destination experience in a vacation home in a rustic backyard cottage—something a city hotel wouldn’t offer. Another person may want the bnb experience—being taken care of personally by their hosts. Still yet, someone may want to lodge in a room over a hostel for the basic reason of cost and space. Assuming that people’s motivations are by lack of hotel capacity is generally not likely to be the deciding factor.

      I can also say as someone who has used Airbnb many times, I likely would have forgone stays in other places altogether without Airbnb. I’m sure this is the case for many patrons. So again, I would caution against the assumption that there is any sort of one-to-one relationship to hotels; it is not born out in an actual case-by-case analysis.

      • I would agree that it’s not exactly one-to-one. My guess is that it’s close to that though. STRs are not just for casual tourists, and people will adjust their expectations about accommodations if they really need or want to come to a place.

        Also, the “commercial” hosts that Burgess’ legislation is targeting tend to list multiple apartment units, which are very much like hotel rooms.

        In any case, if we assumed 10% wouldn’t have come if there was no Airbnb, we’re talking about regulation that might result in a net increase of 30 LTRs in Seattle (using Burgess’ 300 unit estimate). Weigh that against the potential unintended consequences of the regulations.

      • I’m always amazed at how Seattle takes its tourists for granted. Tourism is an amazing source of well paying low-skilled jobs (the type that struggling Seattle residents need). Other cities spend countless millions to attract tourists. Vancouver tourism board handed me a glossy pamphlet about how to take the train up, complete with discounts for a train ride and hotel rooms, while I was walking in downtown Seattle. Yet we celebrate when we can send them somewhere else.

        • Are we sure people are celebrating? Seems like this is about balancing competing interests: 1. Preventing displacement of long-term residents, 2. Providing economic opportunity to local residents, and 3. Providing alternative options for guests to stay. Low-skilled jobs are meaningless if quality housing stock is disappearing to those who are generally paying a much higher per square foot cost for the same space for short-term stays over the people who need long-term stays to service them.

          • But that’s a false choice, right? Mr. Burgess has the power to create a vast increase in housing stock. Why wasn’t the proposal to upzone in the areas where there’s high demand for housing and strong hunger by developers to build this housing?

          • It would appear that you’re saying that Seattle isn’t adding zoning capacity, which is fundamentally incorrect. There’s no reason to not do both: modestly control short-term rentals to avoid apparent negative impacts and do HALA. The only false choice is your assertion here.

          • Seattle is adding zoned capacity at a small fraction of the rate we’re adding jobs. It’s illogical to sacrifice tourists in the name of housing when you are strongly limiting housing.

          • The only illogical thing here is that it’s worth sacrificing existing housing for existing residents. According to the council member, this law doesn’t ban short term rentals. It doesn’t even put a cap on them. At worst–and I say that sarcastically–more people would be enticed to share their spaces with visitors than today, not fewer. And it’s also possible that more hotels or similar providers could step in there really were some void. And if your worst fears are realized–people not visiting Seattle in full-time Airbnb apartments–and the units stay as actual condos/apartments, oh well! That’s *housing* which is the single most important issue here. Are we supposed to turn our back on people who do live here or want to live here and force them to move to the suburbs instead?

          • 1. Those “more hotels” stepping in you’re talking about – those would be new apartments if you didn’t shift that demand. You’re just rearranging deck chairs.
            2. Of course I don’t think we shouldn’t force people to move to the suburbs. But Mr. Burgess arguably does, in that he has power to create a ton of units. But instead he’s messing around at the edges.

          • That is a terribly specious argument at best. First of all, most of these are operating in residential-only areas, not mixed use areas. And where they (and where not) are, you’re actively calling for displacement of residents by landlords who would rather conduct a commercial enterprise. That’s really unsettling.

            Taking housing off the market is not a solution to the central problem. You can’t use the excuse that a well funded hotelier locating in mixed use areas will actually reduce housing. You’re also waiving away the reality that this doesn’t cap short term rentals which will continue to grow. The propositions that you’re putting forward are playing on some absurd development control nightmare that just doesn’t exist and isn’t proposed.

          • I think you’re misunderstanding. Shutting down rooms for visitors increased demand elsewhere. If a hotel was feeling the effects from ABnB and was going to convert to apartments, this will stop that. If they’re already all at capacity then a hotelier will convert existing apartments to hotels. If a new building goes up it’ll be a hotel, not an apartment.

          • The Seattle hotel occupancy rates are at record highs above 80%. I doubt any of them are converting to housing. On the other end, I doubt many or perhaps any hoteliers are planning conversions of existing apartments to hotels as the conversion process would be too expensive (you’d have to evict everyone, upgrade the lobby, set up cleaning facilities and you’d be stuck with rooms generally overstocked with amenities relative to hotel needs). The reality is this city is going to build a lot of housing AND hotels. It’s not an either/or under any scenario. This new short term rental law would probably shift the balance slightly but not much. The law seeks to set up a situation when a new apartment building goes up, we know it’s primarily used as apartment (not a full time short-term rental). That to me has value.

          • Yes, the city is going to build a lot more housing and hotels. But if there are fewer Airbnb STRs, the market will compensate and build more hotels and less housing to meet that shift in demand. Why wouldn’t it?

          • The people building hotels are generally not the same people building housing. They’re also rarely backed by the same investors. Why do you want to reduce housing choice and availability? I can’t think of a more anti-urbanist position.

          • Why would either of those differences you name mean that the market wouldn’t compensate for a shift in demand between hotels and apartments?

          • The question is how much of a shift? Wouldn’t it roughly be equal to the amount of airbnb units that converted back into housing apartments? It’s also possible demand is still so strong for either market that developers wouldn’t slow down much if at all on either front. Maybe one developer uses a parcel for a hotel tower instead of apartment tower based on this law, but another developer goes hey there’s an opportunity fewer housing units going online; let’s fill the void. I don’t know what would happen for certain, but I wouldn’t rule out this law not only creating more housing units in the short term but also not significantly damaging housing production in the long term.

          • Yes, I think the shift would be roughly equal. And if so, that means the regulations do nothing for affordability, which is my whole point.

            What would happen over the long term is what always happens: the market builds according to the demand for the product.

          • What does ‘the market builds according to the demand for the product’ mean? It certainly doesn’t mean the mythical market serves everyone or naturally works towards equitable outcomes.

            Does the market ever fail? Is it possible that your predictions about the future won’t come true?

          • Nothing mythical, it’s just the reality of how real estate development works.

            I have nothing against market interventions to address market failures. But I don’t think Burgess’ regulations will result in a more equitable outcome.

          • If in your view the shift is equal and the regulation doesn’t impact affordability one way or another why are you spending so much energy opposing it?

          • Because I believe it is based on the same underlying faulty thinking that leads to all kinds of bad housing policy. And because it’s a distraction from work that actually could make a real difference.

          • Do you think continuously harping on the workings of ‘the market’ is a successful strategy for changing the faulty thinking that leads to bad housing policy? Or a successful strategy for building the political coalitions that actually get policy passed?

          • I think that misunderstandings about how housing policies and the market interact are among our biggest challenges to addressing affordability. Not sure how you fix that without talking about it. And I’m encouraged to see it being talked about more and more both locally and nationally.

            How would you answer your two questions?

          • First, I wouldn’t characterize others arguments as them misunderstanding economics. In our case I would say that we disagree.

            Second, I wouldn’t speak about the future as if I knew what was going to happen. Economic prognosticating isn’t at all effective. People are much more responsive to real impacts. A great example of this is the personal story told by Charlie Cuniff and his AirBnB.

            Lastly, I wouldn’t pick fights with my potential allies over a policy that I don’t think makes a difference, simply because I think they’re wrong.

          • If the shift were equal to the airbnd/vrbo units that leave the hotel market wouldn’t that mean the housing market would gain some slightly older units while the hotel market would have to build brand new units? Wouldn’t that mean the housing market would shift to older and more downfiltered units thereby gaining a modicum of affordability (at least over new construction)? We would be using the market to deliver some existing stock to residents while leaving a few more tourists to the hotel market, which would build some more shiny new hotels. Tourists are better able to weather the cost of expensive new hotel rooms than residents are expensive new apartments. It’s filtering in action. It seems like encouraging full term conversions of housing stock to short term rentals are a textbook example of would impede filtering.

          • That’s an interesting line of thought but I still think it’s a zero sum game. Rents are mainly determined by demand and the number of units available. Both are the same in either scenario, so it seems to me that the average rent would be about the same either way, as counterintuitive as that sounds.

          • You reasoning appears fatally flawed. 1. As I understand it, this doesn’t limit the number of Airbnbs anywhere. It only prevents residential units from being turned from being turned into full time Airbnbs on secondary properties (like a landlord’s apartment building). In other words, the sky is basically still the only limit in Seattle. More housing units = more potential Airbnbs. 2. Hotels are only allowed in commercial and mixed used zones (I believe). There are tons of vacant properties and that is where a hotel is likely to go first. 3. Not regulating will remove existing housing units from the market.

            It’s that basic.

  2. I would like to see some numbers.
    * Perhaps the most critical question: how many apartments can we get on the long-term market when regulating the rental like this? Does this figure justify the regulation?
    * How many short-term visitors will this regulation influence, and what is their likely reaction? (pay more, stay in hotel, stay away from Seattle..)
    * I also would like to see some explanation why long-term rentals are “more valuable” for Seattle than visitors. Both are real needs, although I may be willing to accept that ensuring long-term stability may overweight the need for short trips.

    From political viewpoint, I would like to see this as a fixed term temporary solution, till we tackle the main underlying problem–too little new housing.

  3. “and provide constructive feedback if you don’t feel they strike the right balance” via what method? you don’t even provide your email address in your post (not that your office even responds to emails). It’s clear that you don’t want our feedback here, you want us to fall in line.

Comments are closed.