Public Policy Challenges and the Lodging Shared Economy

Abstract

The Lodging Shared Economy (LSE) is made up of a complex web of parties which enables guests to stay at a host’s home either with the host at home or away from the property. Many hosts utilize an LSE Online Platform (LSEOP) company such as Airbnb or Vacation Rentals by Owner (VRBO) to rent out a host’s property to a guest and receive payments from the guest including sales and lodging taxes, and they also remit payments to hosts and government agencies. Governmental agencies receive taxes from LSEOPs and distribute taxes to appropriate government accounts. The governmental agencies also enact laws and legislation to govern the activities of guests, hosts, and LSEOPs. This complex process serves the interests of each party involved but at times these diverse interests interfere with another party’s concerns resulting in conflicts, lawsuits, and public policy. This article addresses only regulations within the United States. Using a content analysis design, it provides a summary of LSE regulations for each state, thus allowing comparisons in determining highly taxed versus lesser taxed properties and highly regulated environments versus laissez-faire destinations. Although LSE companies typically transact the financial aspects of the stay, hosts are ultimately responsible for complying with other public policy regulations such as parking, noise, trash, and traffic laws. This study analyzed the most recent court cases among LSEOPs and government entities that illustrate some of the push and pull of public policy decisions on short-term rentals across the United States.