Please help me understand why STR is considered evil by locals?

[Giani Brussich]

If this is the wrong place for this, please remove it.

Recently, I have seen a lot of threads/posts come up on social media (I know, not very reliable or the truth) about how bad/hated STR is for local neighborhoods. With reasons such as taking away housing supply, greed, lack of interest in the local politics, taking away long term rentals, increasing overall home prices, rowdy guests, regular turnover, taking away opportunities/money from locals etc… What was most surprising is how many people agreed. In my opinion, It doesn't make sense. The arguments seem to be half thought out and I don't understand how most of the complaints are solely due to STR or even applicable except with some like high traffic/turnover or rowdy guests. I always try to be empathetic and understand the other points of views but still.

Am I missing something? Please help me understand if I am. Thank you

[Ryan Moyer]

All of my rentals are STRs so I have no reason to dump on them, but I don't really understand why you touched on and seemed to understand many of the issues people have with them, and then just shrugged them off.

I am active in my local community which is a moderate but growing STR market and in the communities of one of my STR locations which is a ruralish area where STRs have become popular (near National Parks). Trust me when I say the vitriol the locals have for STR is not just made up. They HATE it. That's not just a story. It's very real.

It differs by community, but for instance in the rural town near National Parks the main reason is the lack of affordable housing/rents. That's a big reason here locally as well (ski destination). It just doesn't make sense for anyone to use their place as LTR at traditional LTR rates when they can make literally 5x as much operating as an STR even if they pay a property manager. There's nowhere for the restaurant workers, retail cashiers, etc to live.

In the rural town there are literally ZERO places available to rent as LTRs with occupancy. The local FB groups people will post that they're looking for a place to rent and the response is just 100 people replying that everything in town is an STR now because of greedy owners, etc. The hate is real.

The free market just doesn't have any answer for it. Logically we should think that there is a dearth of affordable long term rental housing then someone will step in and fill that void to make that money. But the problem is there is no scenario where the money spent on that will bring in more profit than spending the same many on an STR in these vacation destinations. You could build some giant apartment complex with $700/mo 1br apartments and they'd be booked up to capacity on day 1 so that sounds great. But that place costs $10M to build and for $10M you could build some insanely awesome short term rentals that would make 5x as much.

That's not even to mention that the loan terms are going to be massively better on the STRs since you can buy them without an investment loan.

Granted all of this is less of an issue in urban centers like NYC where there is still plenty of long term housing, but in these vacation destinations the only reason for a LTR to even exist is if the owner is lazy, the owner hates money, or regulation deems that's the only type of rental they can have there.  Otherwise why would anyone just except 1/5th of the returns for an asset class that isn't really any safer, and can always be used as a fall-back in a worst case scenario?

This is all why I've always said that as STR becomes an accepted asset class (as it is very well on its way to being) regulation is going to massively rise. That's why the best and the brightest on this forum have always said from the beginning to focus on areas where STRs are ALREADY a regulated part of the economy, because this is something that every town in the world is going to have to deal with eventually.