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Written by Stacy Pobatschnig
Several STR Frameworks Worth Watching
In most communities debating short-term rentals, the central issue is not whether residents should be allowed to occasionally rent a spare room or their own home.
The more difficult question is whether residential properties should be converted into full-time lodging businesses operated by investors who do not live there.
A growing number of local governments are trying to address that distinction directly. Their regulations differ, but the underlying principle is similar: resident hosting and investor-operated short-term rentals are not necessarily the same land use and do not always need to be regulated in the same way.
Drawing a Line Between Hosting and Commercial Lodging
Traditional short-term rental rules often place every operator into one category. A homeowner renting a bedroom for several weekends may be treated the same as an investor operating multiple whole-home rentals throughout the year.
Several governments have moved away from that approach.
Bar Harbor, Maine, separates short-term rentals into two categories. VR-1 rentals must be the owner's primary residence or located on the same property as the owner's primary residence. VR-2 rentals are entire homes that are not the owner's primary residence. To qualify for VR-1 status, the owner must reside at the property for more than 183 days each year and use it as a legal address.
Burlington, Vermont, similarly structures its rules around the relationship between the host and the property. In most circumstances, the rental must be within the host's primary residence or in another unit on the same lot or in the same building. Off-site rentals are permitted only under limited exceptions, including certain seasonal homes and properties that also provide qualifying affordable housing.
Buffalo, New York, allows both owner-occupied and non-owner-occupied rentals, but it does not treat them identically. Every short-term rental must be licensed, while non-owner-occupied properties must also obtain a special-use permit and comply with applicable zoning requirements. The city defines owner occupancy partly by whether the property is the owner's permanent residence and whether the owner lives there for more than six months of the year.
Atlanta takes another variation on the same idea. Its licensing framework is tied to the operator's primary residence, although one license may include both the primary residence and one additional dwelling. The primary residence must be registered first.
These are not identical policies. Some governments restrict non-owner-occupied rentals, some subject them to additional review, and others allow a limited number of additional properties. But each framework begins with the same threshold question:
Does someone actually live here, or is the property primarily being operated as commercial lodging?
Why the Distinction Matters
The distinction is important because the two activities can have different effects on a housing market.
A resident renting a room, accessory unit, or primary home for part of the year does not necessarily remove a housing unit from the long-term market. In many cases, the property remains someone's home.
A whole-home rental operated year-round by an absentee owner is different. The property may function more like a small lodging business than a residence, even when it remains legally classified as housing.
Treating those activities identically can produce regulations that are either too restrictive or too permissive. A blanket prohibition may unnecessarily limit ordinary homeowners, while an unrestricted system may allow residential properties to be steadily converted into investor-operated accommodations.
Primary-residence classifications give governments a way to regulate the commercial segment without eliminating resident hosting.
Different Communities, Different Regulatory Tools
The examples also show that governments do not need to use one universal formula.
Bar Harbor uses clearly defined operating categories.
Burlington generally requires the host to live on or near the rental property, while allowing narrow exceptions tied to seasonal housing and affordable housing.
Buffalo permits non-owner-occupied rentals but subjects them to a higher level of land-use review.
Atlanta connects licensing to a primary residence while allowing a limited additional dwelling.
Other communities may choose zoning restrictions, density limits, permit attrition, ownership limits, or special-use approvals. The appropriate structure will depend on the local housing market, tourism economy, neighborhood patterns, and available enforcement capacity.
The broader lesson is not that every government should copy one ordinance. It is that governments should identify the specific activity they are trying to regulate rather than treating every short-term rental as interchangeable.
Registration Is the Foundation
Whatever distinction a government adopts, it should be supported by a registration process that is clear, practical, and easy to follow.
For resident property owners, obtaining a permit should not require navigating an overly complex or expensive process. The requirements should be proportionate to the activity, with straightforward applications, reasonable fees, and clearly explained obligations.
Professional investors and commercial operators can reasonably be subject to a different standard. These operators may be required to complete additional reviews, meet stricter operating conditions, obtain special approvals, or comply with limits that do not apply to residents renting their primary homes.
A tiered registration system allows governments to recognize the difference between occasional resident hosting and the operation of short-term rentals as a commercial business. It also makes the rules easier to understand by connecting each type of operator with a clearly defined permit category and set of requirements.
The effectiveness of the framework depends not only on the restrictions it creates, but also on whether the registration process is simple enough for ordinary property owners to use and structured enough to apply meaningful standards to professional operators.
The Broader Lesson
Communities facing housing pressure are often presented with two unsatisfying options: prohibit short-term rentals entirely or allow unrestricted commercial growth.
These frameworks point toward a third approach.
Require registration. Make the permit process clear and accessible. Define primary residence precisely. Distinguish resident hosting from investor-operated lodging. Then apply requirements that reflect the scale and commercial nature of each activity.
Sources
Town of Bar Harbor, Maine, official short-term rental guidance and registration materials.
City of Burlington, Vermont, Short-Term Rental Frequently Asked Questions and Chapter 18 guidance.
City of Buffalo, New York, Short-Term Rental Dwelling Code and licensing guidance.
City of Atlanta, Short-Term Rental Program guidance and licensing information.