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SHORT-TERM (VACATION) RENTALS

Policy  

The sharing economy for housing has significantly changed how homeowners rent property. Short-term or vacation rentals, typically meaning property that is rented for less than 30 consecutive days, exploded in popularity due to online platforms that connect property owners, or "hosts", with prospective guests by the click of a button.  The pace of this new platform has quickly surpassed appropriate government response and regulation and it is essential that community associations – housing more than 68 million residents in the United States alone- have a voice in any legislative and regulatory process.

Background

The nature of short-term rentals is not intuitively harmonious with the community association housing model which focuses on bringing people together, strengthening neighborhood bonds and promoting a sense of community and belonging.  Homeowner volunteers, who are elected by their neighbors to set policies and oversee association operations, and to act in the best interest of the community, are the center of community association governance. 

Further, these volunteer board members, along with their professional managers, are guided by their association's governing documents that are created to maintain community standards, protect property values and encourage a sense of community stewardship.  Governing documents form a private contract between each homeowner and the association and dictate community rules and regulations for both property rights and standards of personal conduct.  Housing purchasers choose where to live and, if within a community association, to accept the contractual and ethical responsibilities to abide by established policies and to meet their obligations to that association and to their neighbors living in the community.

The community association housing model succeeds when a true sense of community is cultivated and there is active homeowner involvement based upon a culture of building consensus.  In contrast, short-term visitors typically have no ties to the community, are not contractually bound by the association's established policies and are generally not invested in the overall good of the community.

 CAI strongly supports the community association housing model and recognizes that no two communities are the same.  Further, CAI recognizes that the sharing economy phenomenon has significantly transformed the dynamics of renting property.  The use of online platforms to arrange short-term rentals has created a unique housing market where short-term rentals provide considerable income for some community associations' owners, particularly those in vacation destination and resort areas.  Associations are incredibly diverse, as such, policies need to be tailored to meet the character, culture and desire of homeowners in a community.

RECOMMENDATION

CAI encourages policymakers to engage industry stakeholders, including community associations, on this issue.  Further, CAI believes crafting regulation should always take place in an open and transparent manner, providing the opportunity for comment by all interested parties.

A board of directors, with input from homeowners, is in the best position to decide whether short-term rentals are appropriate for their community and is the appropriate governing body to craft suitable policies. This is assuming the association's governing documents allow or could be amended to permit short-term rentals to reflect the preferences of homeowners.

CAI supports short-term rental regulation that is consistent with the association's governing documents, federal, state and local law and serves to protect and preserve the ability of community association homeowners to manage their affairs.

CAI opposes governmental regulations that would intrude upon community associations' board of directors' autonomy to serve the best interest of the association. Short-term rental regulation should not impair association contractual covenants and take decision-making authority away from community association homeowners.  This degrades the very core of community association governance, which is based on private contractual obligations of the community's homeowners.

Sample Legislative Language

Virginia Senate Bill 1578 (2017)

§15.2-983 (D) Nothing in this section shall be construed to supersede or limit contracts or agreements between or among individuals or private entities related to the use of real property, including recorded declarations and covenants, the provisions of condominium instruments of a condominium created pursuant to the Condominium Act (§ 55-79.39 et seq.), the declaration of a common interest community as defined in § 55-528, the cooperative instruments of a cooperative created pursuant to the Virginia Real Estate Cooperative Act (§ 55-424 et seq.), or any declaration of a property owners' association created pursuant to the Property Owners' Association Act (§ 55-508 et seq.).

For more information on the implications of short-term rental regulations on community associations, see CAI's white paper, "Short-Term (Vacation) Rentals and Community Associations."

Policy History 

Approved by the Government and Public Affairs Committee, April 11, 2017

Adopted by the Board of Trustees, May 3, 2017 

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