In a recent article I wrote about the effects Airbnb and other short term rental websites create on the construction industry. In a nutshell, I suggested that these short-term rentals are taking regular-long term rental units off the market, because landlords, home owners and many other “short-term rental managers” are using regular long-term units for short term rentals. This creates two effects.

One; the need for more long term rental units, i.e. more apartment buildings, and there is a boom in multi-unit entitlements and construction, which is great for us design professionals. Two; cities losing money because of the lack of collecting hefty hotel or transient taxes. And you know money talks.

I did not think action would be taken so fast.

Case in point, recently the city of Santa Monica outlawed short-term rentals of less than 30 days, period. The effects of this, of course, are yet to be seen. Proponents of home renting state that enforcing such a law will be extremely difficult and instead of forbidding a very lucrative money making opportunity in this “sharing economy” a compromise should have been made.

I don’t think this is the end of this story. I think people will find a way around this “obstacle”, but it highlights the challenge cities will face as they try to impose traditional regulations on a fast evolving industry. It may be a short sighted old method of trying to deal with a new world digital technology. I think it is under estimated, how quickly this digital world can adjust. As they say: “Follow the money…”

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