The Springfield, Missouri City Council will consider an ordinance targeting Airbnb and other peer-to-peer economy companies connecting tourists seeking short-term housing and hosts who provide places to stay.
On January 29, the Springfield City Council will discus a proposed ordinance that would require homeowners using online platforms such as Airbnb or VRBO to purchase annual business licenses and occupancy certificates from the city.
The ordinance would also use zoning regulations to restrict the number of homeowners in a neighborhood allowed to engage in short-term home-sharing.
Michael Farren, a research fellow at the Mercatus Center, says the peer-to-peer economy, also referred to as the sharing economy, demonstrates how free markets spur creativity and innovation.
“The sharing economy in general, and specifically Airbnb, offers new services that essentially weren’t available because of the previous sets of regulations or previous state of the economy,” Farren said.
People have more economic power when the government gets out of the way, Farren says.
“The sharing economy gives families that are travelling more choices,” Farren said. “More choices are almost always good, not only because they give consumers the option to select what they want, but more choices lead to greater competition and more focus by service providers to satisfy customers. More choices give customers more power in the market exchange.”
Balancing Regulations with Rights
Patrick Tuohey, director of municipal policy at the Show-Me Institute, says many other cities are also trying to regulate peer-to-peer businesses.
“Cities are trying to figure out what’s the best way to do this [while respecting] individual rights,” Tuohey said. “There are people who live in communities who have fearful attitudes toward these new practices. Studies show a correlation between short-term rentals and increased property values, but some people are worried about the impact of higher rents.”
Warns Against Outright Ban
Tuohey says cities should use a light-touch approach to regulating the peer-to-peer economy.
“Certainly cities should not ban it outright,” Tuohey said. “I think they need to figure out a way to regulate it as little as possible and see over time what needs to be done. Who knows what the next opportunities will be? Cities should be careful to not snuff out innovation.”