April 16, 2019
by Heather Curry and Christina Sandefur
Home-sharing
plays an important role in supporting Louisville’s vibrant tourist economy,
including the city’s biggest event for visitors: the Kentucky Derby. Rentals on
Airbnb alone brought in $3.5 million during the 2017
Kentucky Derby,
as well as hundreds of thousands of dollars in tax revenue. Home-sharing
residents are able to share their local knowledge and create tailored
experiences for guests who are interested in learning about the city’s culture
and history. Homeowners are able to use the additional income to help pay bills
and mortgages, and the local economy benefits, too.
So why does the Louisville City Council want to restrict the ability of law-abiding homeowners to open their homes to overnight guests? Today, the Planning and Zoning Committee is considering a host of new regulations, including density limitations, onerous permitting processes, and outright prohibitions—none of which are aimed at bad actors or tied to actual nuisances.
The
density limitation would require 600 feet between the property lines of
short-term rentals; again, without any regard to whether an owner or guest has
caused any problems. This action would arbitrarily and unfairly restrict the
property rights of some residents, and may subject the city to legal liability.
In California, the
Goldwater Institute is defending responsible homeowners against the city of
Pacific Grove’s rental caps and density limitations, which also bear no nexus
to nuisances. Costly and time-consuming litigation is inevitable when homeowners
are treated unequally under the law by way of such limitations. Instead, cities
should recognize that law-abiding homeowners deserve to be treated equally
regardless of the location of their property.
Finally,
limiting one’s right to share only a primary residence is not only unfair and
unnecessary—it may also violate the U.S. Constitution. After all, prohibiting a
Louisville homeowner—or a person from another city or state who owns a home in
Louisville—from renting out that home, simply because it is not his primary
residence, is unconstitutional. By letting Louisville residents offer homes for
rent, but forbidding non-residents who own property in Louisville from doing
the same thing, the ordinance treats in-state and out-of-state persons
differently, impermissibly benefitting the former and burdening the
latter.
For the remaining homeowners who are allowed to rent their homes, the process is daunting—and in some cases, insurmountable. To get a permit, homeowners must complete multiple forms, pay fees, and schedule public hearings that can take upwards of 72 days to complete! Of course, this high burden is hardest on those for whom home-sharing is an essential source of income. The Planning Commission Staff Report recommends that civil and criminal complaints be substantiated before an enforcement action can be taken against a short-term rental. So, then, should prospective home-sharers also be given the benefit of the doubt when seeking a permit to engage in lawful activity. An expedited process that allows homeowners to rent their homes while completing a simplified application would be fairer and more just.
Cities
and towns are right to restrict nuisances, noise, and crime, and Louisville has
already demonstrated its ability to respond to the concerns that can arise with
home-sharing. Rather than punishing responsible homeowners, stifling property
rights, and discouraging entrepreneurship, the city should utilize existing
nuisance, parking, and noise ordinances to manage any limited issues that may
come up.
Heather Curry is
the Director of Strategic Engagement and Christina
Sandefur is the Executive Vice President at the Goldwater Institute.
