Advocacy Series: State Preemption Laws – Protecting the Rights of Vacation Rental Property Owners

While the often-contentious matter of vacation rental regulations typically involves city councils, in states that include Arizona, Florida, Indiana, Idaho and Tennessee the issue has been successfully resolved by state legislatures. On that level the arguments are of a different nature: they favor short-term rentals (STRs) with statewide preemption laws. Yes, these laws actually preclude unwieldy and unfair local prohibitions against STRs throughout those states.

So what does a preemption law look like? And how might a preemption law succeed in your state?

Arizona has had a preemption law in place since 2016 (the Arizona Home Sharing Act), enabling property owners from Phoenix to Sedona to Yuma to host guests, enriching the experiences of travelers, property owners and local businesses alike. Its success hinged on the fundamental definition of property rights as championed in no small part by the Arizona-based Goldwater Institute, a libertarian organization. At its core, the organization successfully argued that the state is responsible for protecting individual property owners from unnecessary and economically limiting legislation imposed by city or county governments.

“That law ensures that cities focus on their most vital jobs,” writes Christina Sandefur, executive vice president of the Goldwater Institute. “[Cities should be] protecting quiet, clean, and safe neighborhoods by preventing homeowners and their guests from committing nuisances, trespassing on others’ property, having raucous parties or clogging up the streets with traffic —without needlessly and arbitrarily discriminating against homeowners who offer their homes as short-term rentals.”

Florida Protects Property Owners from being Deemed “Outlaws”

Indeed, anti-STR ordinances can be arbitrary ­– and excessively burdensome. In Miami Beach, Florida, a 2016 law levied $20,000 fines (increased from $1,500) for first-time infractions, which could increase to $100,000 with subsequent infractions. But the Florida state constitution forbids imposing “excessive fines” that are “grossly disproportionate” to the offense – renting space on short-term basis – such that the Goldwater Institute stepped in to challenge the law in court and successfully lobbied for a state preemption bill.

The preemption bill passed by the Florida legislature still faces resistance from several quarters but currently overrules the ordinances that Miami Beach tried to enforce. The Tallahassee Democrat opined in 2018 that a preemptive law protecting vacation rentals was right for the state. “When you get right down to it, the government shouldn’t tell you how to use your own property ­­– provided, of course, you pay your taxes and comply with normal zoning restrictions and public safety requirements,” wrote the newspaper’s editorial board

This is of course a big issue in The Sunshine State. The STR industry is valued at $31 billion there. Airbnb alone has 45,000 listings in Florida, generating $45.7 million in state and local lodging fees in 2017.

As reported earlier this year on the VRMA blog, South Carolina, Missouri and Nebraska have preemption bills proposed for 2019. Wisconsin has a bill enacted but of uncertain long-term status; preemption bills have failed in the Georgia, Illinois Michigan, Texas and Virginia state houses.

Support on the Left and the Right

The case for preemption laws around vacation rentals is fascinating for its politics: This type of law isn’t neatly defined as a Right or Left issue. The Goldwater Institute and similar libertarian organizations (e.g., The Cato Institute), more typically espouse local control versus decisions passed down from on high. But in the case of property, they champion protection of individual property owners from onerous local legislation.

“We've worked very hard to make it a non-partisan issue,” says Sandefur. “Although people on the Right tend to be pro-property rights, they are also very susceptible to local control and NIMBY [not in my back yard] narratives. So, it's important to garner support on the Left, as well as reiterate that this law does not divest cities of all power. It simply protects people from overreach and empowers cities to focus on doing their jobs, such as responding to actual nuisances.”

She adds that the local laws that police who is sleeping in which houses, imposing stiff penalties for doing so, turn “responsible property owners into outlaws,” says Sandefur. “Cities can still enforce nuisance rules that protect quiet, clean and safe neighborhoods, but they can’t impose one-size-fits-all bans on home-sharing that cause more problems than they solve. The reasonableness of the proposal has been a major selling point.”


Lessons Learned

  • Preemption laws require lobbying legislators of both parties on the state level.
  • Preemption laws still enable municipalities and property owners to address nuisance issues as they do with any type of resident or business.

For further information or to initiate support for a preemption law in your state, contact Greg Holcomb at (202) 367-2404 or gholcomb@vrma.org.

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