The Planning Division is conducting a study on short-term rental regulations in Bloomington. Short-term rentals (rentals less than 30 consecutive days) are currently prohibited in the city under §14.577(b). In the Code, short-term rentals are called "transient lodging" as listed in §14.568, Definitions.

Short-term rentals, often facilitated through platforms like Airbnb and VRBO, have become increasingly popular in recent years. While they offer numerous benefits to both hosts and guests, they also have significant impact on:

Housing Availability

Short-term rentals can reduce the supply of long-term rental housing in popular tourist destinations. Property owners may prefer renting to tourists at higher rates, potentially leading to a shortage of affordable housing for residents.
This scarcity can drive up rents and home prices, making it more challenging for individuals and families to find affordable housing.

Housing Affordability & Equity

Advocates for housing affordability argue that stricter regulation of short-term rentals is necessary to ensure that residents can find affordable housing.
The impact of short-term rentals varies across income levels, with higher-income hosts benefiting while lower-income renters may face housing challenges.

Housing Markets

The short-term rental market can lead to increased competition for properties, driving up home prices and making it harder for first-time homebuyers to enter the market.
In some areas, the presence of short-term rentals can create a real estate investment boom, as investors purchase properties specifically for rental purposes, potentially inflating property values.

Economics

Short-term rentals can boost the local economy by bringing in tourists who spend money on accommodations, dining, and entertainment.
Hosts can generate income by renting out their properties, potentially helping homeowners offset their housing costs.

Communities and Neighborhoods

Frequent turnover of short-term rental guests can disrupt the sense of community in residential neighborhoods. Neighbors may be uncomfortable with strangers constantly coming and going.
Noise, parking, and safety concerns associated with short-term rentals can affect the quality of life for residents.

Regulation & Monitoring

Tracking the impact of short-term rentals on housing and neighborhoods requires access to data, which can be challenging due to the decentralized nature of platforms like Airbnb.

With these considerations, careful and deliberate regulation will be necessary to facilitate the positive impacts for residents and visitors and mitigate the negative impacts on housing and equity. To assist decision-making, the study results and recommendations will be presented to Planning Commission and City Council to solicit their feedback and direction, which could lead to amendments to the City Code regarding short-term rentals. As the process progresses, any amendments would require public hearings at the Planning Commission and the City Council meetings.

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