The sharing economy, regulations, and the role of local government

Abstract

Purpose The purpose of this paper is to explore regulatory issues of short-term rentals (STR) and evaluate what constitutes effective regulation of STR by analyzing the STR ordinance in the City of Charleston, South Carolina, as well as reviewing the regulation process the City took. Design/methodology/approach In this case study, the study employed a documentary research method (Ahmed, 2010) using multiple sources, including government documents, historical statistics and local publications. Prior to analyzing documents, face-to-face interviews with a couple of key government officials were conducted to understand the overall context of the regulation processes as well as to obtain primary information and data pertaining to Charleston’s STR regulation processes. Findings The study identified three noteworthy points. First, the legalization process was transparent and democratic; opportunities for stakeholder participation in crafting the Charleston’s ordinance included the establishment of the STR Task Force and public listening sessions. Second, the Charleston’s STR regulation is designed to protect non-participating residents and the historic characters of its neighborhoods; several measures (e.g. strict eligibility, operational restrictions, licensing and permitting, enforcement) protect non-participants and the neighborhood overall, while the City allows STR to be legal. Third, there is a unique enforcement mechanism and tourism-related governance structure; dedicated staff in the Department of Livability and Tourism enforce the STR laws in Charleston. Originality/value Empirical analysis of the STR regulations has never been established. The study provides useful and timely insights for local governments, destination management organizations, tourism scholars, and stakeholders in tourism cities to advance the discussions and debates around STR regulations.