Making Long-Term Gains on Short-Term Rentals
By: Elizabeth Sodja & Jordan Smith, Ph.D., The Gateway & Natural Amenity Region Initiative at USU Extension
Introduction
Since our program, the Gateway & Natural Amenity Region (GNAR) Initiative launched back in 2020, one topic has surfaced over and over as a source of challenges and disagreement in small, rural, gateway and amenity communities across the West – short-term rentals (STRs).
STRs are a thorny topic for planners for several reasons. First, they directly impact multiple (and at times, competing) personal values that community members hold: personal property rights, neighborhood character, ability to live in your community, ability to make a living, etc. No matter which way community leaders decide to go with the use, someone is likely to be upset. Add to this the fact that STRs are an almost entirely online industry, with rapidly-developing technology that’s linked to the global tourism economy, and it can feel almost impossible for communities to manage – especially small rural communities with limited capacity.
To try and help add capacity around STRs at the local level, we recently launched an online course: “Understanding & Managing Short-Term Rentals: Maximize benefits, minimize impacts.”
What is the GNAR Initiative?
The GNAR Initiative is a program of the Institute of Outdoor Recreation and Tourism at Utah State University. Our goal is to help Western gateway communities, their regions, and the public lands around them, thrive and preserve the things that make them special. We aim to help community leaders and land managers prepare and respond to the numerous challenges facing them by leveraging our program’s three pillars: research, education, and capacity building.
What is the GNAR Academy?
The GNAR Academy is an online course library we are developing that seeks to fill in the gap between what gateway community leaders and practitioners have the capacity for, and what their communities need, by providing accessible training around critical topic areas to help communities better understand and advocate for their own needs.
Our target audience for the GNAR Academy is community and organizational leaders with limited capacity in rural gateway and natural amenity communities across the West. That said, we hope any community leaders who are seeing growth, development, and/or planning challenges, regardless of geographic location or size, could benefit from the Academy. Courses are designed so that no formal training in community planning is needed to understand the content. We try to convey topics in a high-level, easy to understand way, so that anyone who has a desire to learn how to better help these places can benefit from them.
Why Short-Term Rentals?
When we launched the Academy last April, we hoped to develop in-depth topic specific courses to help gateway community leaders navigate their most pressing issues. So, it seemed only fitting that our first in-depth course would focus on STRs!
Our goal with this course is to help communities define what they want to see with STRs – whether that's growth, stability, or a reduction – and then share knowledge and resources to help them feel empowered to address STRs in whatever way they see fit.
Does your community see STRs as a helpful way to attract visitors and tap into the tourism economy? If so, how do you ensure that they're safe, and that they grow in a way that benefits and helps the community meet its goals?
Does your community see STRs as a challenge? If so, how do you try and address and/or limit them in ways that are legal, easy to execute, and realistic and for your community to enforce?
How was the Course Designed?
Course development began after we received a training grant from the Utah Office of the Property Rights Ombudsman’s office. Content for course lessons stems from in-depth research on gateway communities and their relationships to the STR, lodging, and housing industries over the last two decades. We also conducted in-depth interviews with 30+ gateway community leaders and STR industry insiders to help ground this content in the real world, highlighting experiences and resources from gateway communities across the West.
Course Overview & Key Takeaways
The course consists of seven lessons, and each lesson highlights a critical part of understanding and managing STRs in Western gateway communities.
While accessing the full course requires registration, we also wanted to share some key takeaways and findings from the research that went into the course, in the hopes that as many community leaders and planners as possible can learn from this project – regardless of whether they take the full course or not.
With this goal in mind, below are some highlights from each of the seven lessons.
Lesson 1: Introduction to Short-Term Rentals
First, what is an STR? It seems like a simple question, but how a community defines STR has direct implications on how it is regulated and enforced. Are STRs the same as hotels? Are owner-occupied STRs (e.g.: A room in a home, ADU) treated the same as non-owner occupied (i.e.: entire home rentals)?
Second, there are benefits and challenges that can come from STRs.
Benefits include things like enabling access to the tourism economy for small communities who are unlikely to draw large hotel investments. STRs provide additional income and entrepreneurship opportunities for locals, while also contributing to the local tax base. Some communities have even found ways to harness them to help fund affordable housing projects.
Challenges include things like significant nuisance issues: noise, parking, and trespassing. STRs can also have an outsized impact on infrastructure and local services, start to erode commercial centers, raise community safety and emergency response concerns, and degrade community character.
Community discussions around regulations are most effective when they acknowledge both sides of the use, and clearly define what they want to see in their community.
Lesson 2: Start with Data - Finding, Understanding, & Utilizing Local STR Data
When dealing with a topic like STRs, which often comes with differing perspectives and high emotions, having good and reliable data can be the key to having constructive – instead of combative – conversations. After studying different ways communities accessed and used data for STRs within their unique circumstances, we came up with a list of “5-steps” to help communities efficiently work with STR data:
Step 1 - Understand Your Context
Step 2 - Define “STR” for Your Community
Step 3 - Decide What Data is Needed
Step 4 - Access the Necessary Data
Step 5 - Use Data for Informed Decisions
Starting policy discussions with data helps ground conversations in facts, rather than emotions, and guides the creation of effective STR policies. Data-driven approaches also help communities balance economic benefits and housing concerns as they develop regulations. That said, data accessibility, accuracy, and cost can pose challenges, particularly for smaller, rural communities.
Lesson 3: Community-Driven Policy Development: The Groundwork for Success
Community-driven policy development is crucial for successfully regulating STRs. Engaging the community early fosters trust, ensures diverse perspectives are considered, and promotes compliance.
First, leaders should spend time determining who the "community" is when it comes to STRs. STR policy discussions impact multiple groups, including: residents, hosts, city officials, realtors, property managers, and local businesses. Leaders should work to involve as many as possible within their resources. A successful engagement process ensures representation from both advocates and critics of STR regulations.
The community needs to be engaged before, during, and after a regulatory process.
Pre-engagement education helps residents understand what the data shows, potential solutions being analyzed, and the scope of policy-making. Making sure there are multiple channels for engagement (e.g.: town halls, surveys, online platforms) ensures diverse community participation. Regular updates and feedback loops help reflect community input and demonstrate that concerns are being heard by community leaders, and taken into account during the process.
Lesson 4: Developing & Implementing Effective Policies & Regulations
Each community is unique. As tempting as it can be to just copy and paste what another community has done for STRs, regulations are much more effective if they consider each unique community context.
After analyzing trends in the regulations communities felt were most successful, we compiled seven steps communities can use to develop effective regulations for their community. We labeled them as “steps” because these actions may be the most effective when done in order. However, each step represents a broader general principle, therefore communities can tailor and shift this process to meet their specific needs and capacity.
Step 1: Pause - Start with “Why?”
Step 2: Clarify - What do you want to regulate for?
Step 3: Consider - What is your enforcement capacity?
Step 4: Research - What regulatory elements could you include?
Step 5: Develop - Build the regulation with the community
Step 6: Implement - Officially legislate the regulation, then communicate the new process to the community
Step 7: Evaluate - Did you achieve the outcomes you wanted?
STR policies should be crafted based on a community’s unique characteristics, and understanding the community’s motivation (i.e., “why?”) for regulating STRs is essential for effective policy development. Are they trying to preserve housing stock? Minimize nuisances? Or ensure tax compliance? Each objective requires a different type of intervention.
Expanding on Step 4 specifically, we also found that most regulations for STR fall into six regulatory areas:
DEFINITION: What is a “short-term rental,” and how will hosts know whether they fall into that category?
REQUIREMENTS: What must a rental have (or NOT have) on site (e.g., parking, occupancy limits, etc.), and what must the host provide to guests?
COSTS: How much does the host pay for the privilege of having a rental in the community (e.g., fees, taxes, etc.)?
QUANTITY: How many rentals are there in the community?
LOCATION: Where are rentals located in the community (e.g., block limits, zoning, etc.)?
TIME: How many nights per year can (or must) a host rent their STR?
Regulations should be realistic and enforceable, with clear rules around permits, and clear penalties for non-compliance.
Policies may also cause unintended consequences. For example, if STRs are capped or banned, they could inadvertently cause an increase in property values for properties with STR-licenses (if they transfer with the property), or reduce local tax revenue. Communities should regularly assess STR regulations to measure their effectiveness and make necessary adjustments over time.
Lesson 5: Easing Compliance & Enforcement
Enforcement is the most challenging part of STR regulations. While following a process like the one found in Lesson 4 can improve outcomes, there are additional strategies and technology that communities can use to improve outcomes.
First, the more people and resources required to execute an enforcement decision, the harder it is to execute. There are three questions communities can immediately ask to gauge their enforcement process:
Are issuing STR permits a legislative or administrative decision?
Is STR enforcement a legislative or administrative decision?
Is STR enforcement a civil or criminal enforcement process?
Because legislative decisions and criminal processes require more effort to execute, communities should decide whether their current processes are helping or hindering their enforcement efforts, and helping them meet their goals.
Another early investment communities can make to improve compliance is through education. For example, ensuring good neighbor policies and information is shared with guests is an easy way to communicate community expectations to visitors (for one good example, see this leave behind home card created by Winter Park, Colorado).
Lesson 6: Enhancing Benefits - STR Tax Base, Economic Development, & Tourism
Despite the perception that it is a recent use, STRs have long played a role in accommodating tourists. However, their significant increase in popularity over the last few years has led them to play a growing and important role within the tourism economy. For example, in 2024, vacation rentals accounted for 10% of all travel and tourism revenue within the US.
For communities who want to increase the local income and entrepreneurship opportunities STRs can provide, there are four different strategies that could be taken:
Making owner-occupied STRs exempt from STR caps and limits
Reducing/waiving fees for owner-occupied STR permits
Introducing 30-day or limited number of “locals only” permits
Allowing internal and/or external accessory dwelling units to be used as STRs
For communities who would rather see STRs in their community convert to long-term rentals, there are a number of incentive programs communities across the country have tried in recent years that encourage property owners to consider long-term rentals as an alternative to STRs.
One barrier is that there is more profit to be made in the short-term vs. long-term rental market. However, fear and the additional liability that comes with long-term renting can also drive property owners to choose STRs over LTRs.
Long-term tenants are more likely to want to make alterations or cause damage to a property over short-term guests. This is where some communities have worked with private partners to assume some of the risks of long-term renting and make it more appealing for property owners. For example, Placemate is a program that helps communities transition STRs into LTRs by educating property owners and mitigating some of the perceived risks.
Lesson 7: How to Stay Engaged with Emerging Trends
Finally, the STR industry is constantly evolving as trends like market saturation, shifting visitor preferences, and new ownership models influence it. Communities who stay engaged and informed with industry trends can address and respond to emerging STR trends before they become significant issues.
Additionally, STR regulations are increasingly being shaped at the state level, requiring local leaders to stay informed and engaged politically. Communities who are connected with their local representatives, and who can combine STR data with personal community stories that demonstrate local impacts, are better positioned to help shape state policy decisions.
Conclusion
We hope the strategies and resources presented here can help community leaders stay ahead of trends, create thoughtful policies and regulations, and foster collaboration around STRs. Communities across the country are facing similar challenges, and many are finding innovative solutions to balance the needs of residents, visitors, and local economies.
More Learning Opportunities
Content for this article was adapted from Utah State University Extension’s online course, Understanding & Managing Short-Term Rentals. The course offers a deeper exploration of the trends, challenges, and policy tools related to short-term rentals in gateway and natural amenity regions. The course includes interactive modules, real-world case studies, and practical guidance on topics such as regulatory strategies, community engagement, and data-informed decision-making. We encourage readers to access the full course for more comprehensive insights and actionable examples that complement the information shared in this article. You can find the course at: https://extension.usu.edu/gnar/gnar-academy-STR
About the Authors
Elizabeth Sodja, MNR, MCMP: Elizabeth is the Program Coordinator for the GNAR Initiative. She has a decade of communications and community outreach experience, and has worked with federal, state, and local government agencies. Before joining GNAR, she worked for USU's Center for Community Engagement and the National Park Service.
Jordan Smith, PhD: Jordan serves as Director of the Institute of Outdoor Recreation and Tourism at Utah State University, where he oversees initiatives that bolster Utah’s economy by helping communities and agencies navigate the complex tradeoffs involved in outdoor recreation and tourism development. Under his leadership, the Utah Outdoor Recreation Strategic Plan and the Gateway and Natural Amenity Region Initiative have equipped underserved communities throughout the Intermountain West with critical tools for sustainable economic growth.