Regulations proposed by Expedia could cripple the vacation home rental industry in Missouri. That was the loud-and-clear message from two local realtors and a vacation home owner who spoke at length during Tuesday's Camden County Commissioner meeting.
Local realtor Stacy Shore met with Camden County Presiding Commissioner Greg Hasty and Commissioner Don Williams on January 17, 2017. The context was a meeting held at Tan-Tar-A on January 12, where both Shore and Hasty were turned away, along with many others who had expected to be admitted to what had been publicized as a town-hall style meeting, but was treated as a private affair. About as many were turned away at the door as were allowed inside.
However, Shore says she has attended other meetings when Expedia presented its recommendations and Representative Diane Franklin was in attendance. From those meetings and through 21 years working in real estate at Lake of the Ozarks, Shore has compiled an extensive set of documents in opposition to possible legislation affecting residential vacation rentals at the Lake.
With Shore were Phyllis Morris—another realtor who opposes possible restrictions on nightly residential rentals—and Laura Martin—a residential vacation home owner who rents her primary residence at Lake of the Ozarks during the busy season while her family moves into a smaller condo at the Lake. All three spoke in favor of allowing residential vacation rentals as a “quiet industry,” adding an estimated $120 million dollars to the Lake’s economy by employing property managers, maintenance and repair laborers, and realtors. Vacationers who rent those residences spend dollars at golf courses, restaurants, waterfront bars, parks, and retail shops.
Shore contends that 40 to 60 percent of vacation homeowners will be pushed out of the market if certain regulations are enacted. These include upgrades and renovations to meet the requirements of Americans with Disabilities Act (ADA) and fire suppression mandates. The cost of these could force some homeowners at the lower end of the earning scale for residential vacation rentals to put their homes on the market, thereby potentially flooding the market.
Both Commissioners Hasty and Williams voiced their concerns regarding these regulations, noting that enforcement for them would be the County’s responsibility. Having to inspect for ADA and fire safety compliance would add to the costs of conducting the County’s business.
Shore, Morris, and Martin noted that several waterfront restaurant and bar owners are or will be in the residential vacation home rental industry. Shore and her colleagues believe this is proof of market trends and that the Lake’s use of this business model has succeeded for several decades without additional regulation, national corporations, or agencies.
Shore reviewed the history of taxes for the commissioners. She provided documents and a timeline for commercial taxation in Camden County as well as statutory language regarding sales and lodging taxes. Most residential vacation homeowners pay both sales and lodging taxes, according to Laura Martin, who added her rentals are organized under an LLC.
Shore also challenged the current authority of the Tri-County Lodging Association to collect lodging taxes from owners renting residential vacation homes. "The ballot language that the voters voted on [in creating the business district for TCLA] clearly does not include the words 'vacation homes,'" she later told LakeExpo.com.
Shore says she is not necessarily opposed to sales tax or lodging tax in connection with vacation home rentals, but that there is a "taxation connotation" -- that the taxation of those short-term home rentals in the way commercial operations like hotels and bed & breakfasts are taxed implies that the vacation home owners are running a business. That has caused run-ins with homeowners associations for some, and Shore says it could also create a slippery slope toward the requirement that those home owners obtain business licenses, since the state would view them as operating a business.
She called Diane Franklin's recently filed legislation "a huge help to us" in that it would help delineate vacation rental homes explicitly as residential rather than commercial.
She also noted currently state statute does not provide for representation of individual vacation home owners on the TCLA board. "As long as we have representation on the TCLA board, we're great with the lodging tax," she added, acknowledging the issue would need a legislative fix at the state level.
Shore also challenged a claim made by some that Missouri does not offer insurance coverage to homeowners who lease their property for part of every year.
Shore believes the debate hinges on definitions of a transient dwelling and residential property. She furthermore believes in amending statutory definitions currently in place as Representative Rocky Miller did for the Bed and Breakfast Industry with HB 2298 in 2016.
If residential vacation homes were exempted from sales taxes, then their status as private property not subject to state regulation would be protected, Shore pointed out.
Commissioners Hasty and Williams stated their intent to hold public meetings about the residential vacation home industry and invite representatives from Expedia, the Tri-County Lodging Association, and area legislators to attend.
