Are Short-Term Vacation Rentals Legal?

The recent explosion in popularity of short-term vacation rentals through services such as Airbnb.com and VRBO.com not only provides terrifying horror stories about problem renters (google it if you’re interested), but also raises serious questions about the legality of the practice.

Many cities are currently struggling with this very issue. Opponents to short-term rentals argue that transient renters disrupt otherwise peaceful neighborhoods and negatively impact local business like traditional hotels. Proponents of the practice contend that they have a constitutionally protected property right to use their private property without governmental interference. In Jerome, Arizona, the City recently grappled with this very issue, and ultimately decided to inform a few of its citizens that they could no longer rent their homes on a short-term basis—much to the chagrin of the affected property owners. Actions like these by Jerome will surely spur future litigation.

So, back to the main question—are short-term vacation rentals legal? The answer turns on the highly specialized field of zoning laws.

Here’s what we know for sure, prohibiting short-term occupancy in single-family areas has been held to be within the lawful scope of the zoning power. 5 Rathkopf’s The Law of Zoning and Planning § 81:11 (4th ed.). This means that cities likely have the constitutional authority to prevent short-term renting through zoning laws.

So—whether renting is “legal” or not depends on the zoning ordinance applicable to the property in question. If an ordinance prohibits rentals of less than thirty (30) days at a time, for example, then renting out a house to a transient for a weekend probably isn’t a good idea. If the ordinance merely requires “residential uses” in residentially zoned areas, however, then short-term rentals likely comply with the law. See Slaby v. Mountain River Estates Residential Ass’n, Inc., 100 So. 3d 569, 579 (Ala. Civ. App. 2012) (“We agree with those courts that property is used for ‘residential purposes’ when those occupying it do so for ordinary living purposes.”).

The moral of the story is to check the zoning ordinance that regulates the use of the prospective rental property. If renting is allowed, then try to avoid becoming the subject of one of the horror stories noted in the opening paragraph. If renting is not allowed, then not all is lost. Some constitutionally minded individuals have challenged prohibitions against short-term rentals as unlawful governmental “takings” that require compensation for the restriction on their ability to use, and enjoy, their private property. The resolution of these “takings” claims will likely be the subject of a future blog post. Stay tuned.