3 Housing Regulations for 2020 – What Property Managers Need to Know

Mar 7, 2020

As the end of the first quarter of 2020 approaches, you may have seen or been recently impacted by several new shifts in housing regulations. Some of these regulations have undoubtedly changed the property management industry for what seems like the long haul. Some seek to help renters in a less affordable renters market, while others help owners protect their financial risks.

Whether these new regulations directly or indirectly affect you as a property manager, these changes will eventually change how the industry does business. While these changes don’t currently impact every state, they are worth understanding as similar initiatives are now pushed on a national scale.

It’s a somewhat confusing time to be a landlord or a property owner, with multiple new regulations and programs, the growth of companies like Airbnb, and new military tenant laws. New laws and changes are likely to have a stout impact on the way property managers and renters act. Knowing the rights of all parties involved will help 2020 a successful and profitable year.

Here are 3 housing regulations you should know about in 2020:

1. Airbnb’s Impact on Short Term Rentals

Short term rentals have become increasingly popular since Airbnb began in a sole apartment just over a decade ago. Airbnb properties make an excellent alternative for hotels in rural and metropolitan areas, but they come with their own set of downfalls for property managers and long term renters.

In response, short term rental laws have been passed by cities across the country. New York City started as far back as 2011, restricting numbers of guests and renting of an entire dwelling. In 2019, cities across the country passed laws of their own, requiring hosts to obtain a license to rent on sites such as Airbnb. Private homeowners using their property as income, now have to register as a business. They restricted as to how many days a property can be rented, as well as how many guests can stay.

How hotel alternatives such as Airbnb and VBRO impact a property manager’s community have pros and cons, whether the community benefits from the increased tourism or causes a decrease in long term rental property availability.

There are heated debates on both sides if this is a real and actual problem or if the hospitality industry is just upset by the sudden competition of nightly stays. The ever-present question: Should we regulate more carefully to regulate local culture and keep long term residents from being priced out of their market, or allow it to thrive and the city enjoy the economic benefits of increased tourism? These laws are specific in nature and vary not only from one state to another but even to specific cities.

2. California’s New Definition of “Employee”

The California Assembly Bill, passed in September 2019, changes the legal definition of an “employee” in the state of California. As of January 1, 2020, a person cannot be an independent contractor if:

  • The worker doesn’t usually perform a specific task for others
  • The work that’s done is not outside of the employer’s primary business
  • The employer controls the contractor’s schedule of work

This law was passed to protect contracted workers who are not currently protected by salary and benefits laws. While this law doesn’t directly affect property management, it is worth noting. Even if your business is outside of the state of California, you may want to use caution with contracting administrative or marketing help with freelancers in California.

3. Military Regulation – Tenant Bill of Rights

At the end of 2019, the National Defense Authorization Act was passed, outlining a tenant bill of rights for military personnel living outside of military base installations.
This Act will impact many military saturated cities near bases across the country – this is a niche category in the renter population. Military personnel has unique needs and issues, such as deployments and orders requiring them to break the terms of their contract. This Act gives property managers clear expectations and outlines to follow with settling disputes and arbitration.

Conclusion

Familiarize yourself with the recent changes to housing laws, but more specifically, reach out and investigate how these changes affect your local city. As a property manager, you will want to think about how these laws affect your residents and property owners. Understanding these new rules and regulations will help you bridge the relationship from the property owner to the resident and keep both parties happy, avoiding possible challenges, and making the rental agreement successful for all parties involved.