Are short-term rental regulations the answer to ABQ housing woes?

It was déjà vu for Carl Vidal when he, joined by over 15 other people, signed up to speak during an Albuquerque City Council meeting in early September.

Vidal came to speak against a bill aimed at tightening restrictions on short-term rentals. He owns and operates almost 30 of them in Albuquerque, where he’s lived nearly his entire life.

“Every time these bills come up, I have to stop focusing on my business, which is not the most profitable business in the world. We’re a very small business,” Vidal said. “When I have to divert my attention from that to trying to keep our industry viable, it’s very hard.”

Short-term rentals are units rented for 30 days or fewer at a time.

The bill sought to “encourage the repurposing of existing properties into more long-term housing” in select portions of the city’s center — Council Districts 2 and 6 — by barring new permits to any short-term rental within 330 feet of another one. Existing permitted rentals would not have been affected. Those districts include some of the city’s most visited areas, such as Nob Hill, Old Town and Downtown. The bill acknowledges that most short-term rentals in Albuquerque are in these areas.

It was voted down 6-3.

In 2020, the city passed regulations on short-term rentals, requiring them to have permits, only allowing two adults per bedroom overnight, limiting gatherings to a maximum of 20 people and not allowing a short-term rental to record more than three violations of city ordinances or state statutes a year or their license would be revoked.

“We actually did compromise with the City Council and the mayor’s office in 2020 when they introduced the current legislation that allows short-term rentals and puts limitations on occupancy, makes people get a permit and subsequently gets three strikes and you’re out,” Vidal said. “That legislation in 2020 was a compromise by the short-term rental community.”

‘NIMBYism’

Of the three votes in favor of the newly proposed short-term rental regulations, two came from bill sponsors Joaquín Baca and Nichole Rogers, who represent Districts 2 and 6, where the restrictions were supposed to take effect. The third vote came from Councilor Tammy Fiebelkorn, who sponsored a similar bill put forth by the mayor’s office the previous year.

“Primarily it’s a housing issue and one of the biggest barriers to that is NIMBYism. Just to be blunt,” Baca said. “I was on the Development Commission before this, and every housing project gets fought by some group. It doesn’t matter whether it’s a market rate, affordable, what have you, everything gets fought by people.”

NIMBY, an acronym for “not in my backyard,” describes people who take issue with developments in close proximity to their property.

A couple of key differences in the bill proposed this year was that it included no cap on rentals within the two districts and was also limited to sections of just two districts, not the entire city.

The bill put forth in 2023 also looked to limit the entire number of short-term rental permits issued by the city to 1,800 and limit the number per person to three.

“Nobody was going to lose a permit. I think there was a lot of misinformation on that,” Baca said. “Several of the folks in the audience during the last council meeting thought that they were going to lose their permit, or that there was going to be a cap on the number of short-term rentals.”

Permits, which cost $120 up front and can be renewed annually for $90, are a point of tension between councilors and operators. While the city requires short-term rental operators to obtain a permit, some do not.

While Vidal said he has permits for the properties he rents, he questions the need for them.

“I abide by the laws for the properties that I own, and all of my personal properties are correctly registered, and I do pay my taxes and everything else. I am a law-abiding citizen,” Vidal said. “I personally question the legality of making someone get a permit to rent their house under 30 days, when you don’t need a permit to rent your house beyond 30 days.”

One similarity between the two bills is the one put forth in 2023 also failed on a 6-3 vote. Council President Dan Lewis voted against both bills.

“It was misguided, and these kinds of bills have unintended consequences. They might have the right intentions, and the intentions are creating more housing Downtown, when in fact, it has the opposite effect,” Lewis said. “It’s proven that if we limit Airbnbs and people’s property rights to do what they want to with their property, then it lowers the availability of housing space Downtown in that area, and it increases the demand for hotel space, which there’s already a limited amount of hotel space.”

A study from the Harvard Business Journal found that “restricting Airbnb is not going to be an effective tool for solving the housing-affordability problems in many U.S. cities.”

“No city in the history of the world has ever regulated itself into prosperity,” Lewis said.

Looking to northern neighbors

Albuquerque wasn’t the only city that slapped regulations on short-term rentals in 2020. Santa Fe did as well, capping the number of rentals on residentially zoned properties across the city at 1,000 along with a 50-foot buffer between units.

It was a promise that one of the bill’s sponsors, Carol Romero-Wirth, campaigned on.

“When I first ran about six and a half years ago, I was going door to door. One of the biggest things I heard was constituents saying that their neighborhoods had been ruined. They didn’t have neighbors — they had vacationers who came and went, and it wasn’t really a neighborhood,” Romero-Wirth said.

Like Albuquerque’s ordinance, Santa Fe’s took effect in 2021.

“The problem we have is that we’re trying to balance interests,” Romero-Wirth said. “When people travel, they do look for Airbnb and VRBO (Vacation Rentals by Owner) options, and we want to have those. But we don’t want them to be overrunning the city and ruining neighborhoods and cutting into our housing stock.”

While the city of Santa Fe hasn’t amended its original ordinance, the county has implemented its own restrictions.

On Jan. 9, Santa Fe County commissioners voted 4-1 to pass an ordinance that most notably limits owner-operators of short-term rentals to two properties and caps short-term rentals if they go above a certain percentage of the housing stock of certain neighborhoods — anywhere from 3 to 7%, depending on the community.

“According to the Santa Fe County Affordable Housing Plan that was adopted in 2023, there is a housing shortage of 17,000 additional housing units needed between 2022 and 2025 to accommodate existing employees and residents,” Olivia Romo, spokesperson for Santa Fe County, said in a statement.

ABQ’s housing supply crisis

Albuquerque needs 15,500 new housing units for people making less than 30% of the area median income, according to the city’s Health, Housing and Homelessness department spokesperson, Connor Woods.

“Short-term rentals are contributing to a reduced supply of long-term housing,” Woods said. “Although the proposal didn’t pass, we appreciate discussions on all options to make more housing available in our city.”

In 2022, Mayor Tim Keller launched the Housing Forward plan with a goal to subsidize 5,000 housing units by 2025. Woods declined to answer on how many affordable units had been added as part of the initiative.

Keller became mayor in December 2017. Since 2018, Woods said, the city “has financed more than 1,200 affordable housing units. Two hundred new units were financed over the last year alone, a record number for our city. In addition, the city has invested about $94 million in affordable housing, and we’re continuing to leverage every dollar to build more affordable housing.”

Keller told the Journal in an interview for another story the initiative would fall short on its goal to add 5,000 units due to hang-ups in the Legislature and City Council. The Housing Forward plan still has a section dedicated to short term rentals.

“The City recognizes that the STR industry contributes to tourism and economy. But a healthy housing market is crucial to a healthy economy. As our local population grows and the housing crisis intensifies, establishing a reasonable limit is a crucial and fair measure,” the webpage said.

A study from this year estimates there are over 2,300 people experiencing homelessness in Albuquerque. At an event hosted by NAIOP, a commercial real estate development association in September, Keller said that the city estimates 5,000 people are unhoused.

Evan Schuster, a local real estate agent who has lived in Albuquerque for 38 years, owns and operates an Airbnb in the Oso Grande neighborhood in the Northeast Heights. He is converting another property in the Northwest Ventana Ranch neighborhood from a long- to short-term rental.

“It’s more profitable. I mean ... nobody would do it if it wasn’t,” Schuster said.

Schuster said his support, or lack thereof, for a ordinance “depends,” but he leans toward “free property rights and letting the market dictate what where the demand is.”

“Here’s the bottom line: You’re going to lose short-term rentals over the next few years anyway. They’re going to go down because it’s going to be driven by the market, and a lot of these owners aren’t going to be able to hold on,” Schuster said. ” I’ve already sold some short-term rentals for clients where the market is just adjusting.”

Schuster also said that the issue of housing availability is largely due to dwindling construction rates since the housing bubble burst in 2008.

“It’s not because people are turning homes into Airbnbs. I mean, I’m not saying that’s not a small portion of it, but that’s not the major reason that there’s a housing shortage,” he said.

While his proposed bill to amend short-term rental restrictions and the one a year earlier from Keller’s administration both failed, Baca, said he’ll be putting a similar bill forward again.

“It was always going to be a heavy lift, because it failed 6-3 last year. And the current makeup of the council is probably a little bit more conservative than the last council that said the lack of housing, available housing in the city, really is one of our biggest issues,” Baca said.

“This will come up again. Maybe it’s after the next election cycle when it passes, but it is something that has to keep happening, because these issues are affecting our entire city, and NIMBYism is part of the problem.”