June 27, 2018
Phoenix—The Goldwater Institute took the fight for one essential property right coast to coast today with the filing of three new lawsuits defending the right of homeowners to offer their private homes to paying overnight guests, a practice better known as home-sharing.
For centuries, property owners have let people stay in their homes, rather than in hotels, sometimes in exchange for money or doing chores. Today, “sharing economy” technology has empowered homeowners and travelers to connect more easily and efficiently than ever before, through online home-sharing platforms like Airbnb and HomeAway. Home-sharing benefits homeowners, travelers, and local communities: It enables property owners to rent their homes to visitors to make money and help pay their mortgages, it gives consumers more choice at lower prices, and it helps communities attract visitors who support local businesses.
But more and more cities are cracking down on home-sharing, depriving homeowners of this right through astronomical fines, cumbersome processes, and outright bans. Today, the Goldwater Institute filed three cases on behalf of responsible home-sharers in three separate cities to ensure that the right of home-sharing is preserved:
- Miami Beach, Florida: The city of Miami Beach, one of the country’s top vacation destinations, has been cracking down homeowners’ property rights by imposing steep penalties for home-sharing. In fact, Miami Beach is home to some of the most extreme anti-home-sharing rules in the country. The city imposes fines of up to $100,000 per violation on home-sharers who rent outside of a zone where rentals are allowed. For many of these homeowners, these fines make up a large percentage of their home’s actual worth—such a fine can only be defined as excessive. The Goldwater Institute is stepping in to challenge Miami Beach’s extreme anti-home-sharing rules; the Florida Constitution prohibits cities from imposing “excessive fines” that are “grossly disproportional” to the person’s action. In this case, the Goldwater Institute is representing a property owner who has shared her properties for over a decade, using income from short-term rentals to weather the economic downturn of 2008.
- Seattle, Washington: While the city of Seattle hasn’t outlawed home-sharing, it has imposed a set of restrictions that make it difficult for someone to operate a home-sharing business, harming local entrepreneurs who have been operating in the city for years without incident. Under the new regulations, which are scheduled to go into effect in January 2019, a person can only rent out his or her primary residence plus two additional properties; if a person owns more than three properties, he or she will be prohibited from using them for short-term rentals. Not only do these restrictions fail to increase the available supply of affordable housing (as the city claims they do), but they also unfairly and unconstitutionally punish people who have made home-sharing their livelihood. The Goldwater Institute is representing one such property owner in this case, who takes pride in providing great service to travelers and has only had a handful of complaints over the course of 2,500 bookings at his properties.
- Pacific Grove, California: In coastal California, already severe restrictions on property use are coming into conflict with increased tourist demand. Pacific Grove, a small city in Monterey County where home-sharing is especially popular, decided to literally raffle off the property rights of its residents via a lottery: Winners get to keep conducting short-term rentals, while every other homeowner loses the right to use their homes to generate income that helps them and their families. And the lottery was completely random, meaning that in theory, an owner who racked up numerous complaints would be allowed to keep a permit, while a responsible homeowner who ensured against nuisances would be stripped of his. Not only does this violate the due process rights of people who lost their home-sharing licenses through no fault of their own, but it also violates the state’s Coastal Act, which requires cities to seek approval from the California Coastal Commission before restricting property rights in coastal areas. Pacific Grove never did so. Therefore, the lottery violates the California Coastal Act and is illegal. The Goldwater Institute represents longtime Pacific Grove homeowners who lost their short-term rental licenses in the city’s recent lottery; they now fear that because of those lost rental incomes, they will be forced to sell their homes.
“Nobody wants to live next door to a nuisance. But cities across the country are unfairly penalizing responsible home-sharers in order to eliminate the problem of a few bad actors,” said Goldwater Institute Senior Attorney Matt Miller, who, along with Goldwater Institute Executive Vice President Christina Sandefur represents the homeowners in the three cases. “If they are genuinely concerned with nuisances, city officials should focus on enforcing reasonable rules that protect quiet, clean, and safe neighborhoods, instead of limiting choices, hindering the city’s tourism industry, and depriving people of the rights—and the incentives—to use their property and speak as they see fit.”
“These laws in Miami Beach, Seattle, and Pacific Grove are part of a misguided war on home-sharing nationwide, and today, the Goldwater Institute is taking action to put these attacks on homeowners’ rights to a stop,” Sandefur said. “Cities are punishing responsible homeowners simply because a handful of landlords operate nuisance properties. But the government cannot ban backyard barbeques just because a few of them get out of hand. The answer is to use existing laws to crack down on bad actors, not to strip everybody of their property rights.”
About the Goldwater Institute
The Goldwater Institute drives results by working daily in courts, legislatures and communities to defend and strengthen the freedom guaranteed to all Americans in the constitutions of the United States and all 50 states. With the blessing of its namesake, the Goldwater Institute opened in 1988. Its early years focused on defending liberty in Barry Goldwater’s home state of Arizona. Today, the Goldwater Institute is a national leader for constitutionally limited government respected by the left and right for its adherence to principle and real world impact. No less a liberal icon than the New York Times calls the Goldwater Institute a “watchdog for conservative ideals” that plays an “outsize role” in American political life.