6 Things To Know About The New Nevada Short-Term-Rental Bill

In 2018, county commissioners essentially imposed a ban on short-term rentals in Nevada’s unincorporated Clark County, which covers the state’s largest short-term-rental operating area. At the same time, the Las Vegas Planning Commission placed severe restrictions on Las Vegas vacation rentals, limiting short-term rentals to owner-occupied properties. Nearby Henderson, Nev., opted to allow short-term rentals, but with many restrictions, and an annual $820 registration fee. Nevada’s Washoe County, which includes Lake Tahoe’s popular Incline Village area, adopted an entirely new short-term-rental policy earlier this year, setting permit fees, limiting occupancy. and allowing owners to operate multiple STRs in some cases.

Ever since the strictest of these rules were imposed, STR owners and potential STR operators have clamored for more freedom, and wondered if and when the bans and tight restrictions would ever end. They may finally have reason to be hopeful. Assemblywoman Rochelle Nguyen (D-Las Vegas) recently introduced Assembly Bill 363, which would create permitting rules and requirements, and enforce tax collection, for short-term rentals brokered by companies such as Airbnb, Vrbo and other listing platforms. But eager Nevada real-estate investors and property owners can’t jump on the speeding STR train just yet. Here’s what’s happening with AB 363 and what’s on the horizon for Nevada short-term rental licensing and regulations.

1. Assembly bill 363 is not the first Nevada bill to address short-term rental issues.
2. The new Nevada short-term rental bill is accompanied by a “conceptual amendment” that includes “distance-between” restrictions, multi-family-dwelling caps and other limits.
3. The bill includes regulations designed to prevent “party houses” and excessive noise.
4. The new measure could have major tax benefits for Nevada state and local governments.
5. The new Nevada short-term rental bill has some surprising supporters, and equally surprising opponents.
6. The bill has not yet been voted on, but could be soon.

1. Nevada’s short-term-rental issues—Assembly Bill 363 isn’t the first to address problems.

Back in 2017 the Nevada state legislature approved AB 321, which authorized counties and cities to adopt ordinances allowing property owners to use online hosting platforms such as Airbnb. The bill also required submission of quarterly reports by these platforms. But AB 321 did nothing to tackle the state’s hodgepodge of county and city short-term-rental regulations. That vacuum in statewide regulation allowed for extremely strict rules to be set in some areas (unincorporated Clark County’s total ban) while other areas were virtually unregulated. Assemblywoman Nguyen has noted that this disparity has given rise to a massive number of non-compliant Clark County vacation rentals openly listed on Airbnb and VRBO. More problematic to Nguyen and her co-sponsors is the inability of state and local governments to reap tax revenue from these “illegal” rentals.

2. The new Nevada short-term rental bill is accompanied by a “conceptual amendment” that includes “distance-between” restrictions, multi-family-dwelling caps and other limits.

In its main scope, Nevada’s AB 363 does the following:

• Requires county and city governments to establish their own requirements related to the rental of residential units as “transient lodging.”
• Requires owners or their agents to obtain permits for renting out residential property as transient lodging.  
• Establishes permitting requirements. 
• Requires tax collection and remittance processes. 
• Revises previous hosting-platform reporting policies. 
• Provides penalties for permit violations.

But the real meat and potatoes of the bill—and the points of greatest contention between supporters and opponents—lie in the amendment that was introduced along with AB 363. The detailed add-on includes these stipulations:

• Establishes a minimum distance of 500 feet between any short-term rentals, except for units within a multi-family dwelling.
• Requires a 2,500-feet separation between any single-family STR and the property line of any resort hotel.
• Sets a 25% cap for short-term rentals in a single multi-family dwelling. 
• Prohibits short-term rental owners from holding more than five permits.

3. The bill includes short-term-rental regulations designed to prevent “party houses” and excessive noise.

Section 20 of AB 363 calls for establishing specific requirements for noise, trash and security. It also defines and prohibits parties. But, again, the real details lie in the conceptual amendment, which:

• Sets a two-night-stay minimum for short-term rentals (except for owner-occupied properties).
• Limits total occupancy to 16 people (four occupants in the first bedroom, two additional people for every other bedroom in the house).
• Requires short-term-rental owners to have a designated local representative who is responsible for the rental and available 24 hours a day, seven days a week, to respond to any issues.

Excessive noise and rowdy gatherings are consistently the biggest complaints voiced by STR neighbors in popular Nevada vacation destinations including Las Vegas, Henderson and Lake Tahoe. The new bill addresses these issues and provides penalties for violating noise and occupancy rules. But even with these regulations, Nevada short-term vacation rental owners likely will want to take a cue from STR owners in other in-demand vacation destinations and protect against fines and false complaints with privacy-safe noise monitoring devices and other smart-home technologies.

4. The new measure could have major tax benefits for Nevada’s state and local governments.

By including short-term rentals in the definition of “transient lodging,” AB 363 would subject residential vacation rentals to the same taxes that Nevada hotels and resorts charge their guests. Taxes would need to be collected and remitted to state and local governments. Ostensibly, these taxes would amount to millions of dollars in currently untapped revenue. Airbnb, for example, estimated that it could have collected and remitted up to $14.5 million on behalf of hosts in 2019. Advocates point out that this windfall in tax revenue could be used, for example, to meet recent recommendations by the Commission on School Funding to bump per-pupil spending in Nevada up to the national average.

5. The new Nevada short-term-rental bill has some surprising supporters, and equally surprising opponents.

Bill supporters include the Culinary Workers Union. This powerful group cites the need for stricter regulations to deter STR investors from purchasing large numbers of housing units—and ostensibly making these unavailable to low-wage-earning service workers seeking affordable housing. The union also hopes that tighter regulations will prevent loud, rowdy guests, and even violent confrontations, from disrupting the lives of workers who live near these properties.

The Nevada State Education Association hopes that taxes collected from licensed short-term vacation rentals will help close the gap between Nevada education funding and other states in the country.

The Nevada Resort Association, which has opposed short term rentals in the past, actually supports AB 363, because the bill mandates and enforces taxing vacation rentals similarly to hotels. 

Opponents of the bill cite a variety of different concerns. These include Airbnb’s worry about provisions including a “buffer zone” around gaming establishments, and a required 500-foot distance between STRs (except for units located in the same multi-family building).

Meanwhile, single-property owners and smaller STR operators worry that having to pay the same big taxes as big hotels will put them out of business.

Still other opponents think that the new bill doesn’t go far enough to limit the overall number of short-term vacation rentals in popular vacation destinations in the state, including Lake Tahoe.

6. The bill has not yet been voted on, but could be soon.

As of this post publication, AB 363, which was first introduced to the Nevada state legislature in April, has not yet been put to a vote. The bill has been exempt from legislative deadlines and further consideration in the legislature is yet to be announced. But Assemblywoman Nguyen appears confident that action will be taken on the issue of short-term vacation rentals during this legislative session. Make sure to check back with NoiseAware for developments on the Nevada short-term rental bill, and other news in the world of vacation rental regulations, and improving relations with STR neighbors and communities.