Airbnb listings 76 pitches in Deadwood. If Deadwood City Council gets its way, there won’t be any more, as Deadwood appears set to pursue a moratorium on short-term rentals while the city hosts a study into letting developers cut large quantities of living space from the already tight Northern Hills residential housing market and transform it into tourist accommodation. Deadwood City Council has issued a 180-day moratorium on short-term rentals last summerthen gave on first reading a 180-day extension at its meeting on December 20. The ordinance had to be finally approved at city council last tuesday.
Deadwood’s Airbnb Ban makes an exception for additional short term rentals during the Sturgis Motorcycle Rally. Anyone wishing to start a bed and breakfast in an area zoned residential must apply for a conditional use permit. Landlords who run short-term rentals in non-residential areas must show the city they pay South Dakota State Excise Tax and obtain a lodging license from the Dakota Department of Health from South. register for the city’s business improvement district tax 1-6, obtain a city business license, and obtain business accounts for water, sewer, and waste.
Custer and Hill City also banned the expansion of short-term rentals.
A 2021 Carnegie Mellon study found that short-term rentals reduce the availability of long-term affordable housing, but increase income opportunities for landlords. This revenue gain is concentrated: Inside Airbnb estimates that a quarter of short-term rental companies own two-thirds of rentals.
AirDNA believes that 62% of listings you see on Airbnb have been added since 2020. Short-term rentals in small towns and countryside have doubled since 2019. But the rural rental market could be a pandemic bubble close to bursting:
The number of short-term rental listings in small towns and rural areas nearly doubled between May 2019 and May 2022, according to a joint report by AirDNA and STR, another analytics firm. This follows a trend of American travelers seeking fresh air and solitude during the pandemic, but could prove disastrous for Airbnb owners in those regions if travel patterns return to normal.
“Rural areas are in danger,” says [Maryville University dean of accounting, economics, and finance Jaime] Peters. “The lack of alternative uses for large rental mansions, with hot tubs, game rooms and scenic views in rural areas, makes them particularly vulnerable. A small apartment in New York can always be converted into a long-term rental (usually less profitable), but that’s difficult with a seven-bedroom mansion in rural Georgia.
[Tony J.] Robinson, who manages 30 properties across the country, shares similar concerns about a potential slowdown in demand for rural vacation rentals.
“If I try to convert my Tennessee properties to long-term rentals, I won’t make any money,” he says. “So I would be motivated to sell” [Sam Kemmis, “How the Airbnb ‘Gold Rush’ Could Impact the Homebuying Market,” Nerd Wallet, 2022.12.07].
I suspect Black Hills short-term rentals don’t face the same risk of losing customers post-pandemic, as the area was a popular tourist attraction before the coronavirus caused people to seek rural isolation. But it’s an effect that Deadwood can watch for in its study of short-term rentals and factor into its discussion of a permanent policy on Airbnbs.
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