Heather Osborne rents out an entire 1,650-square-foot house in central Starkville via Airbnb, the family room of which is shown in this image from the Airbnb website. Under a new proposed city code, Osborne and other owners of short-term rental properties would have to live in the homes and pay an annual $300 license fee in order to rent them out. Photo by: Courtesy photo
September 28, 2019 10:00:01 PM
The renovations on the 1,650-square-foot house in central Starkville had just finished when the owner, Heather Osborne, found out about the city's proposed restrictions on renting out residential units on Airbnb.
"Personally, it's devastating to me," said Osborne, who invested what she said was a great deal of money tailoring the four-bedroom, four-bathroom house to Airbnb customers.
The city's final draft of the unified development code includes a $300 yearly license to host a "short-term residential rental property" in a single-family home. That includes, but isn't limited to, weekend rentals, game day rentals and listing such property on websites such as Airbnb.
If a homeowner pays the fee, the proposed code only allows renting a property for up to 30 nights or 10 weekends per year and requires owners to live in the houses they offer for short-term rental.
"I'm going to have to go a different route if this passes," Osborne said. "I'm not going to be able to keep it as an Airbnb."
The goal of the restrictions is to keep people from using single-family houses in residential neighborhoods like hotels, Mayor Lynn Spruill said.
"Having unknown people come in and out of a residential neighborhood on a weekly basis is not conducive to a single-family, children playing in the streets kind of neighborhood," Spruill said. "You have people who are not aware of the community, who don't have respect for the community because they don't live there."
The city will host the first of several public input sessions for the unified development code -- which includes several other requirements for zoning, building, etc. -- Thursday at the Starkville Sportsplex. The code will not become effective until the board approves it in December.
Osborne said she and other local Airbnb hosts will attend and make their perspectives known to city officials.
How Airbnb works
Airbnb allows users to rent out their properties -- which can be an entire house, an apartment or even just a private room -- to guests. The service uses an online marketplace where guests can browse available listings and book in advance.
Starkville, with its proximity to Mississippi State University and its athletics programs, is a popular destination on Airbnb. According to the Airbnb rental analytics tool MarketMinder, there are 160 active rentals in Starkville, and 83 percent of them are entire houses, condominiums or apartments.
A press release from Airbnb earlier this year said property owners registered with the site hosted more than 1,700 guests in the city of Starkville during MSU's 2018 football season, generating nearly $300,000 in supplemental income for owners.
Osborne charges between $500 and $600 per night on MSU home football game weekends, $200 per nights on weekends without home games and between $85 and $150 per night on weekdays, she said. The house can serve up to 10 guests at once, according to the online listing.
How the conversation started
City officials began considering placing limits on short-term house rentals in May when Oktibbeha Gardens resident Julia Baca told the board of aldermen that roughly 17 guests had stayed at her neighbors' house via Airbnb in a six-week period. She expressed concerns about noise and safety in the neighborhood with so many people from outside coming and going.
"No one would call that a neighbor," Baca said at the board's May 7 meeting. "One would call that a hotel."
Ward 5 Alderman Hamp Beatty lives in Baca's neighborhood, and "every time you look up there's a new person occupying that house," he said.
Beatty was elected May 30 in a special election, and he said regulating Airbnbs was one of the issues on which he ran for office. He is comfortable with the proposed regulations and hopes they deter people from buying houses with the sole purpose of renting them out, he said.
"That increases demand and drives up the price of property," Beatty said. "That's good for people that already own the property and don't have a debt on it or something, but it's not good for people who are trying to move here and buy a house."
Real estate investors from outside Starkville should not be driving property values in the city, he said.
He cited Sedona, Arizona as a cautionary tale. The Arizona Republic reported in January that short-term vacation rentals are one reason housing has become difficult to find in Sedona.
Osborne said the restrictions as they are proposed would likely cause rental rates to go down and impact long-term rental rates citywide. She also said limiting the number of rentable nights per year could reduce the city's tourism revenue via a domino effect on restaurants.
City leaders should be familiar with the business and economics of Airbnb before imposing regulations on it, Osborne said.
"I think, overall, the impact on the city hasn't really been investigated, and I think the theater of Airbnb and short-term rentals hasn't really been investigated either," she said.
Some hosts argue the night limit, others the license fee
The proposed restrictions would not be much of an issue for Leslie Gray and Jason Camp, who both said they rent out their permanent residences less often than 10 weekends per year.
Gray said she is "on the fence" about the restrictions because some hosts might genuinely need the money from their rentals, either as income or to cover extra costs.
"There's an opportunity for somebody to make a little extra money, and that money may go toward back-to-school clothes for their children, or it might pay for a vet bill because their dog got sick," Gray said. "You never know what that extra money could be helping them work through. It's really nice for individuals to be able to benefit from some of the influx of population in Starkville and for all of that tourism money to not go directly toward all the hotels."
Camp and his wife, Kristy, rent out their house only on MSU home football weekends. He shares Beatty's opinion that property owners should not rent out houses in Starkville while they live elsewhere.
He said he is comfortable with the 30-night limit but not the $300 license fee because a bed-and-breakfast license in Mississippi only costs $20 per year, and long-term and student rentals do not have to obtain permits.
"If we're putting in these regulations simply to discourage every-night rentals (with) absent hosts, why not put in the regulations saying that it has to be a permanent residence and you're limited to 30 or 40 nights? Why the need for this permit?" Camp said.
If the city implements permits, it should also have an enforcement plan in place, like cross-referencing a list of issued permits with registered Airbnb sites in the city, Camp said.
The first rental at Osborne's Airbnb is for the weekend of Oct. 19, when the MSU football team plays at home against Louisiana State University. She already has a reservation for the weekend of MSU's graduation in May, and people still contacted her after it was booked to ask for availability that weekend, she said.
She charges lower rates over the summer and has a reservation for a wedding already confirmed this far in advance, she said.
"If I knew going into accepting bookings that I was (possibly) going to be limited to 30 nights, I certainly wouldn't book at a summer rate," Osborne said. "I would wait and save all my nights for a high-demand group."
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