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Short-Term Rental Update: Vacasa nearly doubles real estate footprint with the acquisition of Wyndham vacation rentals; multifamily developers continue to seek out short-term rentals

Vacasa Nearly Doubles Real Estate Footprint
("Vacation rental platform Vacasa will pay $162M to acquire Wyndham Vacation Rentals," GeekWire on Jul 30, 2019)
We learned last week that Portland-based Vacasa plans to acquire Wyndham Vacation Rentals, reportedly increasing its real estate footprint by 9,000 vacation homes to expand its portfolio to approximately 21,000 vacation homes. Vacasa’s CEO, Eric Breon, expects to leverage Wyndham’s “decades of operational excellence” with Vacasa’s “next-generation technology” to deliver the best vacation rental experience for guests. Given this news and their recent announcement that they hired new CFO Jim Grube, we expect to see big things from Vacasa in the coming months and years.

Multifamily Developers Continue to Seek Out Short-Term Rentals
("Why Short-Term Rentals Are Becoming A Staple For Mixed-Use Developers," Bisnow - Nashville on Jul 31, 2019)
According to Tom Klaess, senior vice president of property management at Stay Alfred, short-term rentals can increase net operating income for most multifamily properties by up to 25%. This is no surprise to us, as we’ve previously reported that potential partnerships between developers and STRs are ripe with opportunity. One upside is fewer empty units during the lease-up period for new builds, which makes the economics of the building more attractive. However, there are hurdles in highly-regulated jurisdictions like Seattle where the downside can be significant, including triggering enforcement by regulators and the possibility of incurring penalties for failure to comply with the local STR regulations. We are continuously monitoring the development landscape for creative win-win solutions.


Other news:

Industry News

Marriott vs. Airbnb: Hospitality steps into the home-share game
Biz Journal - Southwest News on Jul 30, 2019
Since emerging on the hospitality market, short-term rental companies like HomeAway and VRBO have proven themselves to be the foremost disruptors to the hotel industry. In particular, Airbnb has become the dominant home-sharing service, establishing itself as a household name. 

You Can Now Monetize Your Pool ... Unless It Turns Out To Be Illegal
Bisnow - South Florida on Jul 24, 2019
About two summers ago, then-19-year-old Bunim Laskin was looking for a way to entertain his 11 younger siblings. He knocked on the door of an elderly neighbor, who agreed to let him use the pool if he would chip in for the cost of maintaining it. 

Airbnb of cannabis looking to expand weed tourism in Edmonton
Edmonton Journal - News on Jul 20, 2019
A cannabis room rental and experience service looking to tap into weed tourism is expanding into Edmonton homes this summer. PotRentals, based out of Montreal, is looking to cut through the uncertainty of when and where smoking cannabis is allowed in accommodations that are found on other popular short-term room rental services, most notably Airbnb.

TurnKey Secures $41 Million In Funding, Aims For U.S. Expansion
Forbes - Consumer on Jul 23, 2019
TurnKey Vacation Rentals announced Tuesday that it had secured $48 million in new funding, bringing the company’s total raised to $100 million since its inception in 2013.

Regulation & Legal Developments

SF ponders what to do with corporate rentals like Sonder
Curbed - San Francisco on Jul 29, 2019
Corporate rentals, which technically count as housing but in many cases operate more like hotels targeting deep-pocketed visitors, are now thrust into the spotlight in San Francisco after last week’s discovery that a development at 2100 Market Street is marketing itself as a “boutique living service” rather than traditional apartments.

Moab has extended its moratorium on new construction for short-term rentals
Salt Lake Tribune News on Jul 30, 2019
Overwhelmed by its popularity as a tourist destination, Moab’s City Council has adopted a new land-use code which blocks construction of new hotels, condos and houses intended for short-term rental such as through Airbnb.

No more “party house” in Glendale if new Airbnb law passes
Real Deal - LA Real Estate News on Jul 26, 2019
Glendale is the latest city to consider cracking down on short-term rental platforms like Airbnb. City Council is expected to vote in September on rules that would ban vacation rentals and regulate home sharing, the Glendale News-Press reported. 

Enforcement

Denver developer criminally charged in connection to short-term rental operation
Denver Post - Local News Crime on Jul 31, 2019
A fourth Denver property owner has been charged with a felony in connection with falsifying legal documents about their short-term rental property. 

Honolulu warns illegal vacation rental owners of new fines
Washington Times Headline News on Jul 28, 2019
Honolulu has sent approximately 5,000 “courtesy” letters to owners and operators of illegal vacation rentals warning them to stop advertising or face hefty fines. The Honolulu Star-Advertiser reported Friday that violating the new ban on advertising short-term rentals could result in fines of up to $10,000 per ... 

Wellington cracks down on non-compliant short-term rentals
WFLX Fox29 Palm Beach News on Jul 26, 2019
There’s a crackdown on wild house parties being held at short-term rental homes throughout Wellington. Officials say they are now going after homeowners who give underage kids access to party. 

It’ll take time for Austin to crackdown on thousands of unlicensed short-term rentals
NBC KXAN News on Jul 22, 2019
In the City of Austin, more than 10,000 Austin properties advertise themselves as short-term rentals, a new city memo notes. But only 2,500 of those are licensed and paying fees to the city. A number of the unlicensed rentals have been the subject of repeated complaints and violations.

Taxation

Short-term rentals could be causing big property tax increases in New Orleans
New Orleans 4WWL - Orleans on Jul 24, 2019
For some, the cost of living in Orleans Parish is going up. Property assessments have raised property values, which can raise your property tax. Eyewitness News spoke with people in Treme, who have concerns. Homeowners in New Orleans are bracing for substantially higher property taxes. 

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We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.
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