Renting Your House On Airbnb Should Not Trigger Felony Charges

Renting Your House On Airbnb Should Not Trigger Felony Charges

In cities like Denver, the regulatory overlords have become needlessly tough on homeowners who rent out second properties as Airbnbs.
Molly Davis
By

A felony is often thought of as reserved for the worst types of criminals—those who commit violent offenses, harming individuals or their property. But that’s not reality. Aaron Elinoff, a 34-year-old Colorado man, found this out the hard way.

Last week, the city of Denver filed criminal felony charges against Elinoff for allegedly violating the city’s short-term rental laws. The city and others across the country have deemed that people may not freely rent out their property on a short-term basis for extra income (commonly done through the website Airbnb), and sometimes have deemed this transaction worthy of criminal penalties.

The current patchwork of laws restricting individuals’ ability to peacefully use their property as they wish is a clear infringement of their property rights. Elinoff’s criminal charges should be dropped and states should work to allow individuals to rent their homes out short-term without the fear of hefty fines or criminal penalties.

Denver Thinks Airbnb Lies Warrant Felonies

Elinoff’s formal charge is “attempting to influence a public servant” after he allegedly lied to city officials about his primary residence in order to rent one of his secondary properties out on Airbnb. This isn’t the first time Denver has used this avenue to discipline its residents for failing to follow the strict short-term rental laws. In June 2019, Denver filed felony charges against a couple, Alexander and Stacy Neir, for allegedly lying to the city about their primary residence while renting out their second and third homes on Airbnb.

In Denver, an individual can only rent his home short term if the home is his primary place of residence. Otherwise, rentals are strictly illegal. This means people who own vacation homes in Denver that are sitting empty for most of the year may not rent their property short-term to earn extra income. Additionally, the city dictates that those seeking to rent short-term must apply and pay a fee for a government license to operate, and purchase special insurance coverage, among other onerous laws such as requiring homeowners to provide lengthy brochures to renters.

Rather than pass criminal laws dictating short-term rental use, some cities pass laws with violations punishable by outrageously high fines. Short-term rentals in Miami Beach, Florida, are punishable by $20,000 per offense. Yes, you read that right.

In New York City, one can face a $1,500 fine for simply posting his rental online. One couple in San Francisco had to pay $2.5 million for a chain of Airbnbs they were running. But it’s not just in large cities. In American Fork, Utah, a short-term rental violation carries a penalty of $500 per day per violation—which is still shockingly high for something that isn’t harming anyone.

Existing Law Covers Neighbors’ Worries Already

The logic behind many of these burdensome laws and hefty penalties for short-term rentals is two-pronged. Some critics of the home-sharing platforms argue that allowing people to rent freely through sites like VRBO or Airbnb will result in a tighter housing market, with higher prices for local residents because people will buy up properties and rent them on a short-term only basis.

They claim that for local residents in an area with short-term rentals, the costs will outweigh the benefits with a major loss of affordable housing. Other skeptics argue in the name of protectionism for the hotel industry, claiming short-term rentals equate to unfair competition with hotels that force these establishments to drastically drop prices or go out of business.

Yes, short-term rentals could impact housing prices. But this is not a good reason to criminalize the inherently peaceful behavior of renting out a home to those who are willing to pay. And while regulations are not ideal for property owners who wish for only freedom, they’re a far less invasive alternative to an outright ban of short-term rentals, which is what some cities are resorting to.

A better approach for cities facing affordable housing difficulties is to allow individuals to rent on short terms at their primary residence—without a consequence of criminalization. Instead, local governments can use other enforcement mechanisms such as small fines.

For localities without major affordable housing problems, the main concern may be of the nuisances that could arise with disrespectful vacationers taking over a home next door. No one wants to live next to a trashy, loud party house for the entire summer. But again, the solution lies not in an outright ban. In this instance, the fix is often already within the text of the municipal code: nuisance ordinances.

Most cities and towns have laws that explicitly prohibit nuisances including noise, smell, sight, and anything else that could cause a public health or safety concern. Localities should rely on these to take care of any negative externalities instead of preemptively banning short-term rentals or regulating them to death.

After all, nuisances are not reserved for vacationers but can be committed by a lifelong neighbor who decides to be loud and obnoxious. Luckily, the ordinances take care of both.

Don’t Tread on Savvy Sharing Economy Participants

It’s time to stop local governments from trampling individual freedom and property rights simply from fearing bad outcomes. The sharing economy presents great opportunities for people to use their property to make extra income, and there’s no stopping this growth. Whether it’s renting out an extra room on Airbnb, garage space on StoreAtMySpace, or a vehicle on Turo, these exchanges are a win-win for everyone involved.

With every new marketplace advancement, governments must choose how they will approach regulation. In this case, local governments hold the regulatory power. It’s easy to simply ban everything they deem as bad or unworthy of having a place in their municipality, but the easy way out is not a good path forward. It’s much more difficult to find workable solutions to deal with possible negative externalities while still allowing people to financially grow while advancements develop.

This is what localities should do: find solutions that don’t threaten people with jail time or outrageous fines. They need to prioritize individuals and their rights by letting residents live and use their property peacefully while resolving problems with minimal intrusiveness.

Molly Davis is a policy analyst at Libertas Institute. She is also a contributing writer for Young Voices Advocates. Find her on Twitter at @_molly_davis_.

Copyright © 2019 The Federalist, a wholly independent division of FDRLST Media, All Rights Reserved.