Understanding STR Regulations: A City-by-City Overview

Short-term rental regulations vary dramatically across the United States, and understanding these rules is critical for any investor or host. What is perfectly legal in one city may result in significant fines just miles away. This regulatory patchwork creates both challenges and opportunities for informed operators. For detailed city-specific rules, explore our comprehensive STR regulations guide covering major markets across the country.

This guide provides an overview of common regulatory frameworks, examines specific city approaches, and offers compliance strategies that protect your investment. While regulations change frequently, understanding the underlying principles helps you adapt to new requirements as they emerge. For a step-by-step approach to compliance, explore our STR Regulations Guide.

Common Types of STR Regulations

Most jurisdictions regulate short-term rentals through some combination of the following mechanisms. Understanding these categories helps you research requirements in any market.

Permit and License Requirements

Many cities require specific authorization to operate an STR:

• Business license: General requirement to operate any business in the jurisdiction
• STR permit: Specific authorization for short-term rental activity
• Conditional use permit: Zoning approval for residential property used commercially
• Safety inspection: Fire marshal or building department verification
• Annual renewal: Many permits must be renewed yearly with fees

Zoning Restrictions

Zoning laws determine what activities are permitted in specific areas:

• Residential zones: May prohibit or limit commercial activity including STRs
• Mixed-use zones: Often more permissive for rental activity
• Overlay districts: Special rules for historic areas, downtown, or tourist zones
• HOA restrictions: Community associations often have their own rules

Occupancy Limits

Regulations often restrict how STRs can operate:

• Night caps: Maximum nights per year you can rent (common: 90, 120, 180 days)
• Guest limits: Maximum occupancy based on bedrooms or square footage
• Primary residence requirements: Some areas only allow STRs in owner-occupied homes
• Minimum stay requirements: Some cities prohibit stays under 7 or 30 days

Tax Obligations

Multiple tax types may apply to STR income:

• Transient occupancy tax (TOT): Hotel-style tax on short stays
• Sales tax: Applies in some states on rental income
• Tourism taxes: Local assessments for tourism promotion
• Business taxes: Annual or quarterly business license taxes

City-by-City Regulation Examples

The following examples illustrate the diversity of approaches cities take toward STR regulation. Use these as reference points, but always verify current local requirements.

Highly Restrictive Markets

New York City has some of the strictest STR regulations in the country:

• Rentals under 30 days require host to be present during stay
• Entire apartments cannot be rented short-term if host is absent
• Registration requirements with significant documentation
• Platform liability for non-compliant listings
• Fines reaching $5,000+ for violations

San Francisco pioneered comprehensive STR regulation:

• Primary residence requirement with 275-day annual occupancy
• 90-day annual cap on unhosted rentals
• Mandatory registration through city portal
• 14% hotel tax on all short-term stays
• Quarterly reporting requirements

Los Angeles implemented home-sharing ordinance in 2019:

• Primary residence requirement
• 120-day annual limit unless extended home-sharing permit obtained
• Registration required before listing
• Platform must verify registration before allowing listing
• Accessory dwelling units (ADUs) prohibited from STR use

Moderately Regulated Markets

Austin, Texas distinguishes between property types. For complete details, see our Austin STR regulations guide:

• Type 1 (owner-occupied): More flexible rules, no density cap
• Type 2 (non-owner-occupied): Subject to density limits in residential areas
• Hotel occupancy tax of 15% collected by platforms
• Operating license required with annual renewal
• Noise and parking regulations strictly enforced

Denver, Colorado requires primary residence:

• Must be host's primary residence (183+ nights/year)
• License required with fire inspection
• No limit on rental nights if owner-occupied
• Non-primary residences limited to accessory dwelling units
• 10.75% lodger's tax collected by platforms

Nashville, Tennessee uses permit system with location-based rules. Learn more in our Nashville STR regulations guide:

• Owner-occupied permits available in most areas
• Non-owner-occupied limited to specific zones
• 3% hotel occupancy tax in addition to state sales tax
• Permit cap in some areas creating grandfathered situations
• Strict noise ordinances with potential permit revocation

STR-Friendly Markets

Gatlinburg, Tennessee embraces vacation rentals:

• Minimal restrictions compared to urban areas
• Business license required but readily available
• State and local taxes collected by platforms
• Strong tourism infrastructure supports STR operations
• Property manager licensing for professional operators

Scottsdale, Arizona protects STR rights:

• Arizona state law preempts restrictive local regulations
• Cities cannot ban STRs in residential areas
• Transaction privilege tax and bed tax apply
• Nuisance-based enforcement rather than permitting
• HOAs may still impose their own restrictions

Orlando, Florida varies by specific location:

• Resort zoning areas permit STRs freely
• Orange County has minimal county-level restrictions
• Tourist development tax of 6% collected by platforms
• Some HOAs near theme parks built specifically for STR use
• Business tax receipt required for operations

Compliance Strategies

Operating legally protects your investment and ensures long-term viability. Here are strategies for maintaining compliance.

Before Purchasing

Due diligence before acquisition prevents expensive mistakes:

• Research regulations first: Understand rules before making offers
• Verify zoning: Confirm the specific property allows STR use
• Check permit availability: Some areas have caps or waiting lists
• Review HOA documents: CC&Rs may prohibit rentals under 30 days
• Calculate compliance costs: Include permits, taxes, and required upgrades in projections

Permit Application Best Practices

Many permit applications require careful attention:

• Complete applications fully: Incomplete applications cause delays
• Prepare required documents: Proof of ownership, insurance, floor plans
• Schedule inspections promptly: Fire and safety inspections may have wait times
• Address deficiencies quickly: Fix issues found during inspection immediately
• Track renewal dates: Calendar permit expiration to avoid lapses

Ongoing Compliance

Maintaining compliance requires ongoing attention:

• Monitor regulatory changes: Subscribe to city council agendas and STR host groups
• Keep records: Maintain documentation of all rentals, taxes paid, and correspondence
• File required reports: Many jurisdictions require quarterly or annual reporting
• Display permits: Post permit numbers in listings and physically as required
• Update registrations: Report ownership changes and contact information updates

Tax Compliance Deep Dive

Tax obligations for STR operators are complex and vary by location. Proper compliance protects you from penalties and audits.

Occupancy/Lodging Taxes

Most jurisdictions impose hotel-style taxes on short stays:

• Tax rates range: Typically 6-15% of rental amount
• Threshold varies: Often applies to stays under 30 days
• Collection method: Some platforms collect automatically; others do not
• Registration required: You may need a tax account even if platforms collect
• Filing deadlines: Monthly, quarterly, or annual depending on jurisdiction

What Platforms Collect

Understanding what platforms handle helps ensure full compliance:

• Airbnb: Collects in most major jurisdictions but not all
• VRBO: Collection varies more widely by location
• Direct bookings: You are fully responsible for collection and remittance
• Verify coverage: Check platform help center for your specific location

Income Tax Considerations

Beyond local taxes, STR income has federal and state implications:

• Schedule E reporting: Rental income reported on personal returns
• Deductible expenses: Mortgage interest, utilities, supplies, depreciation
• Self-employment tax: May apply if providing substantial services
• State income tax: Report in your resident state and possibly property state
• Professional guidance: Work with a CPA experienced in rental property

Insurance and Liability Considerations

Proper insurance is a regulatory requirement in many areas and essential protection regardless.

Required Coverage

Many jurisdictions specify minimum insurance requirements:

• Liability minimums: Often $500,000 to $1,000,000
• Property coverage: Replacement cost for structure and contents
• Proof required: Certificate of insurance for permit applications
• Named insured: Policy must cover STR activity specifically

Platform Protection Limitations

Airbnb's AirCover and similar programs have limitations:

• Not primary insurance: Designed to supplement, not replace, your coverage
• Claims process: May be lengthy and not always favorable to hosts
• Coverage gaps: Many situations not covered under platform programs
• Regulatory compliance: Platform protection does not satisfy permit insurance requirements

Recommended Insurance Types

• Commercial STR policy: Purpose-built for short-term rental activity
• Umbrella policy: Additional liability protection beyond base policy
• Loss of income: Covers lost revenue during repair periods
• Workers' comp: Required if you have employees (cleaners, maintenance)

Working with HOAs and Landlords

Even where local government permits STRs, private restrictions may apply.

HOA Considerations

Homeowner associations often have rental restrictions:

• CC&Rs review: Read carefully for rental duration minimums
• Rule changes: HOAs can modify rules, potentially affecting your ability to STR
• Fines and enforcement: HOAs may fine or sue for violations
• Board approval: Some require prior approval for any rental activity
• Guest registration: Rules may require registering each guest

If You Are Renting

Operating an STR in a property you rent raises additional issues:

• Lease review: Most leases prohibit subletting without permission
• Landlord permission: Get written authorization before listing
• Insurance implications: Your landlord's insurance likely does not cover STR activity
• Eviction risk: Unauthorized STR operation is grounds for eviction

Staying Informed About Changes

Regulations evolve constantly. Staying informed protects your business.

Information Sources

• City council agendas: Monitor for proposed STR ordinance changes
• Local host associations: Groups that track and advocate on STR issues
• Platform communications: Airbnb and VRBO notify hosts of regulatory changes
• STR attorneys: Professionals who track legal developments
• Industry publications: News sites covering vacation rental regulations

Advocacy Opportunities

Hosts can influence regulatory outcomes:

• Public comment: Attend city council meetings on STR issues
• Host associations: Join groups that lobby for reasonable regulations
• Relationship building: Engage with neighbors and community positively
• Good operator reputation: Compliant, responsible hosts strengthen the case for STRs