Since our country’s founding, Americans have allowed guests to stay in their homes for short periods of time, often in exchange for doing chores or paying for dinner. Today, technology allows people to do this in ever more efficient ways—to allow guests to rent a room or a house for a week or a night at time. Home-sharing benefits local economies, helps homeowners earn money to pay their mortgages and gives travelers more choices at lower prices. It also represents an important way for property owners to exercise their basic right to choose whether to let someone stay in their home — a right the Supreme Court has called “one of the most essential sticks in the bundle of rights that are commonly characterized as property.”
But cities nationwide are cracking down on home-sharing, depriving homeowners of property rights not only through outright bans, but also by imposing astronomical fines, cumbersome procedural requirements, and discriminatory rules. A new video in the Fourth Branch series of the Federalist Society's Regulatory Transparency Project explores the issue of whether such home-sharing regulations are necessary to protect consumers and local communities, and what those regulations should look like.
Cato Institute’s Matthew Feeney points out that existing market participants – i.e. the hotel industry – have an incentive to advocate for harsher regulations to keep the competition out. But neighbors who don’t like short-term rentals in their neighborhoods also call for restrictions.
The usual reason given for forbidding people to choose whether or not to allow guests in their homes is that these guests sometimes make noise or increase parking or traffic problems in local neighborhoods. But, as I discussed in a recent Federalist Society teleforum on Life, Liberty, and the Pursuit of Home-Sharing, cities already have rules on the books to deal with nuisances like these, and they should enforce those, rather than imposing one-size-fits-all bans that take away people’s right to use their own property even when they aren’t causing nuisances. In the video, Retired County Commissioner Pete Clark suggests that cities should not shut down home-sharing, but rather register home-sharers and then respond to complaints if and when they occur.
As Feeney notes, if you are allowed to let someone sleep on your couch or in your guest room for free, you should be allowed to let them do it for money. If a family is occupying a home for residential purposes for ten years, a year, a month, or just a few days—that’s still a residential use. Ultimately, this is an issue of private property rights. Government shouldn’t create new restrictions against longstanding practices (here, allowing an overnight guest to stay in one’s home) – especially if those regulations aren’t tailored toward addressing a specific public health and safety problem – just because people have found an innovative way of communicating about those practices.