St. George Shutting Down Airbnb Providers

Editor’s note: The following is a lightly edited interview with Stephen Palmer, a St. George resident who has been renting out his basement on Airbnb. The comments in this interview do not necessarily reflect the views of Libertas Institute.

Libertas Institute: Can you explain for our readers what services like Airbnb and VRBO are and why you decided to participate with Airbnb?

Stephen Palmer: They’re a platform that allows you to rent out a part of a house, or your whole house even, to travelers. If people are familiar with Uber and Lyft, it’s like that but for houses. Uber and Lyft allow you to rent out your car essentially, or just give people rides. You can do the same thing with your house with Airbnb. If you’ve got a spare bedroom, you can rent it out for $30 or $40 a night. It saves people money when they would be spending $80 or $90 in a hotel.

LI: Why did you decide to start doing it?

SP: Well, we have a big enough house. We have three levels and we just brought our kids up to the main level, so we have a whole basement with two bedrooms—it’s a full 1,500 square foot basement with two bedrooms and a bathroom. It’s just a perfect setup. We also have side parking, so none of our neighbors even had any clue we were doing this (not that that would matter) because they park on the side and they walk around back to a keyed entry in the basement. Most of the time we never even see our guests. 

LI: How long have you been doing Airbnb, and have you ever had complaints from neighbors or anybody else?

SP: We started in December of last year (2014) and have never once had a complaint. Like I said, nobody even knows we’re doing it.

LI: You’ve been operating for some time without any complaints. Can you explain the letter you received in the mail a week or so ago?

SP: It came from the city code enforcement officer and it says that we are in violation of two city codes. The main one is an ordinance that prohibits short-term rentals in residential neighborhoods, unless it’s in a specific zone or there has been an exception made. And the other ordinance is for a business license, which is not as big of a deal. It irks, but we could have gotten a business license. But as it is, we’re just shut down.

LI: The letter was just a warning, is that correct?

SP: It says on the top that it’s a “courtesy notice,” which is kind of funny given that it has the threat of force behind it. But yeah, no fines have been imposed—yet. The letter was dated on the 12th and we have until the 26th to comply. The letter said, “I was in your neighborhood and noticed this violation,” which is patently not true. Even if he had been in our neighborhood, he would not have been able to drive by our house and say, “oh, this guy’s doing Airbnb.” So that was just a mistruth. They just tracked us down on the website.

And then he says that they are going to show up again and see if we are still in violation. I don’t know how that’s going to work. What are they going to do, knock on my door? But we have until the 26th to comply. Otherwise, fines will be levied. It’s backed by a class C misdemeanor, punishable by up to 90 days in jail. 

LI: That raises the next question: do you intend to comply?

SP: I don’t know yet. My wife and I are both really struggling with it. That would be the easiest thing. I see a range: on one end of the scale is complying, shutting down, and moving on with our lives. We’re making anywhere from $1,000 to $1,500 a month. So, in the low end, complying with this is going to lose us $12,000 a year. So that’s one end of the scale.

The opposite end of the scale would be to take it all the way through non-violent resistance—don’t pay the fines, don’t comply, let them slap me with a class C misdemeanor, let them come up and arrest me, and just show them the absurdity of the law. I don’t know if I’m prepared to do that. I’m leaning towards complying because the honest truth is, who has time for this? I have to make a living; I don’t have time to mess with this garbage. I don’t know. It’s up in the air. 

Another strategy would be to not comply and just pay the fines and see how far that takes me. 

LI: Would it be financially viable for you to continue to operate and pay the fines? Obviously you would be earning less money, but does that still provide for a viable operation?

SP: No. As I understand it, the fine is $25 a day, so that comes up to about $750 a month. We put a lot of time and effort into this—cleaning the basement every single time we have new guests (most people are staying two nights, so there is a lot of turnover). To make $250 to $300 a month would just not be worth it. Could we absorb the fine? Yeah. But it just wouldn’t be profitable to do so. It would be a waste of time.

LI: As a homeowner looking for another stream of income to support your family, and participating in a service that has yielded no complaints, how did you feel when you received that letter? How do you feel now about the predicament you find yourself in?

SP: Honestly, weak and powerless. What can I do? The mayor lives two doors down from me and he never had any clue. I’ve had a few conversations with him about it. I’m also friends with one of the city council members; I’ve also had conversations with her. It’s pretty apparent to me that I’m fighting a losing battle. I don’t have a lot of hope that I can get the ordinance changed.

It’s frustrating… It’s beyond frustrating. I haven’t done anything wrong. I’m technically a criminal and I haven’t done anything wrong. People say, “well, you broke the law,” but, really, what did I do wrong? Whose rights have I violated? Where is the victim? Laws like this create victimless crimes, and that is hard to swallow. 

LI: Why do you suspect that this ordinance was created to begin with?

SP: When we talked to the city councilwoman and the mayor, they cited two reasons: the first is that they’ve had problems in the past and the second is the possibility of future problems. Let’s take each of these in turn.

If it’s existing problems, okay, what have those problems been? Councilman Randall cited to me the last complaint they got, which was someone who had a vacation rental that they didn’t live in and they were renting out the whole home. There were thirty people in the home at the same time and they were partying late into the night. To this I say, the crime wasn’t that they had a short-term vacation rental—the crime was that people broke the noise ordinances which, I agree, violates the rights of others. But there are already laws on the books for noise ordinances, so they should enforce the existing laws. There’s no need for a redundant layer of bureaucracy to handle specific, very rare problems, because you already have ordinances that could take care of those.

So, enforce the noise ordinances. If there are parking issues, enforce those; if there are noise issues, enforce those. Take care of the issues as they arise, because the fact to the matter is that for every one instance that you can cite like that, there are countless other nights in hundreds of other vacation rentals where nobody even knows anyone is even there. You’re making these broad, wide-sweeping ordinances to handle a handful of knuckle-heads. I agree that there can be existing problems. But again, keep the main thing the main thing. What is the crime? What is the offense? What is the violation? Deal with those.

And then the second thing: potential problems. Why would we make laws based on potentials problems? When I spoke to the mayor, at first he was playing politician and beating around the bush and wouldn’t give me a straight answer. I was trying to get the lay of the land and figure out how he felt about it. He said, “well this is the law,” and I said I know this is the law, but I’m wondering how you feel about it. And when pressed he finally said, “I would not want to live in a neighborhood of short-term vacation rentals.” Okay, but are you willing to put a gun to your neighbor’s head to enforce that? To enforce your aesthetic preference of what you want in your neighborhood? Where is this even happening? It’s an absurd concern because it’s not happening. You don’t have investors coming in in droves buying up all the real estate in St. George and turning whole neighborhoods into vacation rentals. It’s just a ridiculous thing to even consider.

LI: Would you agree that because of your self-interest in your home, your family, and your children inside that home, you are far more responsible in regards to any potential actual issues with your tenants than your neighbors or the city code enforcement officer might be?

SP: That’s exactly right. I’m glad you brought that up. That’s the other reason why, if you don’t even go beyond this superficial issue, the ordinance does not work for its stated intended purposes. When you read the letter, it says, “St. George residents have consistently expressed that clean, well-maintained residential neighborhoods, commercial districts, and agricultural areas are a high priority. Maintaining these areas has proven to increase property values, provide a higher standard of living, and promote community pride.” So, that is the stated intended purpose of this ordinance that prevents short-term rentals. What it ignores is what you just said: we have every incentive—we have an invested interest—in making sure that our property is appealing to our guests.

In fact, we invested over $2,000 in home improvements before we even listed our property on Airbnb. If the point is to make sure that we have clean, well-maintained neighborhoods, then they ought to explicitly allow short-term rentals because if that’s the purpose, that’s how they are going to incentivize people to boost their property values and improve their homes. 

And along those lines, I had an interesting conversation with the mayor on an unrelated issue, but it gives you insight into this mentality. When talking to the mayor—and I’m not taking bad about the mayor personally, he is a friend of mine and I like him personally; we just happen to have different views on politics—he said this to me: “One thing to remember is that when we move to cities we typically expect more services. We also typically expect more rules and regulations like zoning and setbacks. Those are tradeoffs, I guess, for the benefits of living in a closely knit community.” Essentially the claim is that rules and regulations are what provide for closely knit communities.

I don’t know how else to say it other than I am baffled at that perspective. Order is not the same thing as a closely knit community. You might have curb and gutter, you might have nicely trimmed green lawns, but does that make for a closely knit community? In my crazy idealistic way of thinking, what makes for a closely knit community is people loving and serving each other.

I’ll give you a scenario: you have an 80-year-old widow who can no longer take care of her yard and it starts growing weeds and dying. What are you going to have in this “closely knit community” that is driven by rules and regulations and all these tradeoffs for the benefits of supposed order? You would have the code enforcement officer show up and cite her and tell her she needs to clean up her lawn or else she would be fined. In a true closely knit community, the neighbors would show up and say, “Agnes, what can we do to help?” And they would cut the lawn, they would take care of the yard, and they would have a relationship with her. This idea that rules and regulations make for a closely knit community thoroughly confuses me. I don’t get it. The fact is that our community is based on a vast web of intricate, minute, little ordinances down to the height of a fence you can build.

LI: With all these rules and regulations, going back to what you said a minute ago, do you think that the cost, the time, and the burden to fight them serves as a deterrent to change them? Do laws like this remain on the books because people like you who disagree with them have a natural disincentive to fight because of the costs, in terms of both time and money? 

SP: That’s just the thing. Who has the time to deal with this? And not only the time, who has the stomach to deal with the bureaucrats? I don’t know if I do. That’s what I’m weighing. 

LI: Let’s say you were to speak before the city council and were able to address the individuals who created and are enforcing this code, what message would you want to convey to them? 

SP: First and foremost I would acknowledge that property rights are a tough issue to deal with. I understand that. I struggle with this myself. I wouldn’t really identify myself as a hardcore libertarian who believes in absolute property rights. I went to a city council meeting last week and you sit there and look at the issues that they deal with and in the really complex matters you start realizing that it’s a hard issue. I understand that it’s complex; I understand that it’s easy to have abstract hardcore principles, but in practice things get sticky.

I think it comes down to two principles. First, we have defaulted to force in nearly every matter because it is the convenient, simple, and fast way to go. If there is ever a question, if there is every a sticky issue, we say let’s just force it. That’s the simplest way to deal with it. That’s our default mode and I would call it the water that fish swim in: it’s become so default in America that we don’t even question the water in which we swim. This idea that if there is ever a problem, just imposing force immediately is the default. I’d say I don’t have all the answers, but if there is ever a question then our default should automatically be toward freedom. Less force, more freedom. And then we could deal with issues as they arise, understanding that there would be issues. That’s the nature of the beast and that’s what makes for a true community—we work things out together. So number one, as a principle, as a general rule, let’s default toward freedom.

Second, let’s be extremely, extremely careful about creating victimless crimes. Any time you create an ordinance that has the potential to turn people into criminals when they haven’t violated anybody’s rights, that’s a problem. I’ve really done my best to try and see all sides of this. What I can’t get over is that I haven’t done anything wrong; I haven’t harmed anyone. Where is the victim? Where is the objective, demonstrable, measurable harm that I have inflicted on another person?