Today the House Local Government and Municipal Finance Committee posted a hearing for Wednesday, April 17, 2024, at 12:00 noon. The committee agenda includes House Bill 5438, the Short-Term Rental Regulation Act.

HB 5438 provides for the registry and regulation of short-term rentals and hosting platforms.

• It creates a statewide short-term rental (STR) database.
• It is NOT a preemption attack on local decision-making. Local units of government maintain authority to regulate STRs.
• It creates a new STR excise tax (the rate is 6% of the occupancy charge), with most of the funds collected going back to the municipality where the STR is located. Currently, municipalities have no dedicated revenue source to assist with the public costs of tourism.
• It asserts that hosting platforms cannot facilitate a booking transaction for a short-term rental if the property is not registered with the state and in good standing with the applicable local unit of government.
• It protects neighborhoods and allows communities to balance housing needs.

Each time a short-term rental preemption bill has had a hearing over the past seven years, the argument for support has revolved around the notion that municipalities are banning STRs, and thus, the only solution is to have their zoning authority stripped away. HB 5438 is a compromised approach allowing local units of government to regulate STRs but not outright ban them or have regulations that have the effect of total prohibition. This legislation is a balanced approach valuing people and quality of life in neighborhoods versus investors and profits, as seen in past legislation.

Please contact the committee to show your support and urge them to take action by passing House Bill 5438!

The committee agenda also includes HB 5437, 5439-5446. These are convention tourism assessments and hotel-motel taxation legislation. The League has not taken a position on these bills as they have nothing to do with local government regulation of STRs, nor do local units of government receive any portion of the funding created through these acts.

A past blog on HB 5438 can be found here.

Jennifer Rigterink is the League’s assistant director of state and federal affairs handling economic development, land use, and municipal services issues. She can be reached at [email protected]