Another major city has voted to ban short-term rental (STR) platforms like Airbnb and Vrbo. Dallas lawmakers voted last week to make it illegal for homeowners to operate STRs in neighborhoods with single-family zoning. Commercial areas and neighborhoods not limited to single-family zoning will still allow STRs but they will be more strictly regulated, including registration requirements and a hotel tax fee. The move comes three months after city council members formally submitted a proposal that would outlaw popular rental platforms like Airbnb. For years, there had been pushback to STRs from residents of the city’s neighborhoods, who complained of quality of life issues due to loud parties, trash, and even shootings that they say were caused by the rentals.
The decision in Dallas comes as an increasing number of cities are looking at limiting or outright banning STRs. In March of this year, New Orleans officials adopted new regulations limiting short-term rentals after a heated debate among residents. And this latest development in Dallas comes less than a month after lawmakers in Los Angeles introduced a motion targeting STRs and just weeks after Airbnb sued New York City over its STR legislation that is set to go into effect next month. Despite the backlash, demand for these kinds of rentals is still expected to grow through the rest of the year, according to AirDNA, one of the few companies that tracks vacation and short term rental data. Though demand and supply will likely be more muted than in 2021 and 2022, years of huge growth in the industry, it’s a segment that will continue to have solid fundamentals. Cities now have to decide if they want to allow what can be a very lucrative business for its property owners or ban STRs to try and appease homeowners who want to keep vacationers out of their neighborhoods.