Companies like Airbnb and Vrbo have captured a lot of business that would have previously gone to hotels and resorts. Unable to compete with short-term rental (STR) companies like Airbnb, hotels and resorts are using their political connections to ban, regulate, and/or tax STRs. Nevada is the latest state to consider regulating and taxing STRs.
The sponsor of the bill currently before the state’s legislature claims that the bill will bring “parity” to the situation. A lobbyist for a gaming company supports the bill, saying that it “protects residential neighborhoods, communities, and affordable housing, and fairly requires [short-term rentals] to pay the transient lodging tax, just like our resort hotels do.” A lobbyist for the Culinary Union concurred, blaming STRs for the lack of affordable housing in Las Vegas.
Despite these claims, this bill has nothing to do with protecting neighborhoods or affordable housing. It has everything to do with cronyism.
Tourism accounts for one-quarter of the jobs in Nevada. The hospitality industry (hotels, resorts, and gaming companies) in Nevada is suffering from the competition offered by STRs. The established hospitality companies may not be able to compete with STRs in the marketplace, but they can outcompete STRs in Carson City—Nevada’s capital. And so the hospitality industry is using its political connections to influence legislators. The industry is using its political connection to obtain political favors in the form of regulating and taxing STRs. And that is cronyism.
If this bill is about protecting neighborhoods and affordable housing, then why does it only apply to one county (Clark County where Las Vegas is located)? If this bill is about protecting neighborhoods and affordable housing, then why will it require STR owners to have a representative available 24/7? If this bill is about protecting neighborhoods and affordable housing, then why does it mandate a minimum stay of two nights at any STR? The answer is simple: The bill has nothing to do with protecting neighborhoods or affordable housing. It has everything to do with protecting the interests of the established hospitality industry. And that is cronyism.