Short-term rental regulation has moved into a new phase. Cities are rolling out licensing systems with density caps, local-contact rules, and platform verification duties; New York has become the first state to run a short-term rental registry; and federal courts have mostly sided with cities that limit or ban rentals in residential neighborhoods. At the same time, several state legislatures are weighing preemption bills that would strip those local powers away, and platforms like Airbnb are spending heavily to shape the outcome.
Here is where the rules stand in 2025 and 2026, and where the fights are still open.
What a Typical City Ordinance Now Requires
A pattern has settled in. Cities writing new ordinances tend to require some mix of the following: an annual license or registration, a density or neighborhood cap, a minimum stay, a local contact who can respond quickly to problems, platform cooperation on verifying listings, and escalating fines or license revocation for repeat violations. Four 2025 and 2026 ordinances show the range.
Salt Lake City
Salt Lake City’s framework takes effect July 1, 2026. Operators pay a base business license fee of $198 plus $342 per unit, submit to safety inspections, and comply with a two-night minimum stay and a 200-night annual cap. A local contact in Salt Lake County must be reachable 24/7 and able to be at the property within two hours. Rentals are confined largely to mixed-use, downtown, and transit corridor zones and are kept out of most residential districts. In buildings larger than ten units, no more than 10% of units may hold licenses. Unlicensed operators face fines of up to $1,000 every seven days, and three verified violations in a year can suspend a license.1The Salt Lake Tribune. SLC Places New Rules on Short-Term Rentals
Finance Operations Director Arturo Garcia said the two-night minimum was adopted because “one-night rentals attract party-type stays and create more noise and neighborhood complaints.”1The Salt Lake Tribune. SLC Places New Rules on Short-Term Rentals
Austin
Austin’s density provisions took effect October 1, 2025. On properties with three homes on a single lot, up to two may be rentals; on properties with more than four units, the cap is 25% of total units. Platforms must display city-issued license numbers on listings and remove unlicensed properties when the city requests it. Existing unlicensed operators had until July 2026 to get licensed before platforms were required to pull their listings.2KUT Austin. Austin Short-Term Rental Property Changes A designated local agent must respond to emergencies within two hours, and violations carry fines of up to $500 per day.3Avalara MyLodgeTax. Austin Short-Term Rental Hosts and Marketplaces Face New Regulations
Houston
Houston’s first short-term rental ordinance, approved unanimously in April 2025, requires registration and a $275 fee. A registration can be revoked if renters commit certain crimes at the property, including reckless discharge of a firearm, disorderly conduct, or prostitution, or for repeated noise violations. Three or more renter-related convictions within two years can cost an owner all their registrations. Violations are misdemeanors carrying fines of up to $500.4Houston Public Media. Airbnb and Vrbo Properties in Houston To Face Regulations
Madison, Alabama
Madison’s June 2026 ordinance caps permits at 190 citywide, roughly 0.75% of the city’s housing units. The $350 application fee includes a home inspection, and an annual $150 business license is required. Operators must notify neighbors, obtain HOA approval where it applies, provide a local contact who can reach the property within 30 minutes, and pay lodging taxes. Three credible complaints in a single year can trigger a permit suspension.5AL.com. Madison Cracking Down on Short-Term Rentals With 190 Property Limit
New York’s Statewide Registry
New York became the first state to create a statewide short-term rental registry when Governor Kathy Hochul signed S885C on December 21, 2024.6New York State Tourism Industry Association. First-of-Its-Kind Short-Term Rental Law Signed by Governor Hochul Hosts must register their units, include registration numbers in all advertisements, and carry at least $300,000 in liability insurance. Platforms cannot collect fees on unregistered properties and must submit quarterly data to enforcement authorities, including rental dates, guest counts, and taxes collected.7New York State Senate. Senate Bill S885C
A 2025 chapter amendment, S820, shifted the registry from a single centralized state system to a county-based one. Every county must create and maintain a registry unless it opts out through a local law by December 31, 2025, or within nine months of the act’s effective date, whichever is later. Counties that opt out lose the authority to collect hotel and motel occupancy taxes on short-term rentals, though they can still enter voluntary tax collection agreements. Municipalities that already ran their own registries before the law took effect can keep them.8New York State Senate. Senate Bill S820 Platform tax collection for counties with existing taxing authority began March 1, 2025.9New York State Association of Counties. Short-Term Rentals
Can a City Ban Short-Term Rentals? What the Courts Say
The constitutional question of whether a city can ban short-term rentals in residential neighborhoods remains unsettled, but recent federal rulings have gone in cities’ favor.
In June 2026, the U.S. Fifth Circuit Court of Appeals upheld New Braunfels, Texas’s ban on short-term rentals in residential neighborhoods. The panel ruled the city had a “rational basis” for the zoning restriction and that property owners have no constitutionally protected right to operate rentals. The homeowners, represented by the Texas Public Policy Foundation, said they would ask the full Fifth Circuit to reconsider.10San Antonio Express-News. Short-Term Rental Ban in New Braunfels Upheld
Texas state courts have produced mixed signals. In Zaatari v. City of Austin, an appeals court struck down Austin’s ban on non-homestead rentals as unconstitutionally retroactive. In Draper v. City of Arlington, a different appeals court upheld rental restrictions under rational-basis review. In City of Grapevine v. Muns, the Texas Supreme Court declined to issue a definitive ruling, saying the question needed further development in lower courts.11Baylor Law Review. Short-Term Rentals in Texas Texas has no state statute that either preempts or expressly authorizes city regulation of short-term rentals, so cities rely on general zoning and ordinance powers and face lawsuits when they do.12Texas Municipal League. Short-Term Rentals
New Orleans is the other major battleground. The city restricts residential permits to one per square block (allocated by lottery when needed), bars corporate entities from holding permits, and requires a full-time resident manager. A 2024 ordinance requires platforms to electronically verify permits before posting listings and submit monthly compliance reports, with fines of up to $1,000 per day for noncompliance. Airbnb and local property owners sued in February 2025, arguing the rules violated property rights, forced platforms to act as enforcement agents, and that mandatory data reporting was an unreasonable warrantless search.13Steeg Law. Federal Court Upholds New Orleans STR Regulations, Airbnb Announces Appeal
On September 8, 2025, U.S. District Judge Jay C. Zainey largely sided with the city, upholding its authority to limit density and require platform verification. He struck down certain detailed revenue and transaction-level reporting requirements as a Fourth Amendment violation. Airbnb has appealed to the Fifth Circuit, and the city retains full enforcement authority in the meantime.13Steeg Law. Federal Court Upholds New Orleans STR Regulations, Airbnb Announces Appeal City Council Vice President JP Morrell has said that if the regulations are overturned, the council will move to ban short-term rentals entirely.14WWNO. Explaining New Orleans’ Short-Term Rental Saga
When States Block Local Rules
Several state legislatures are considering bills that would strip cities of the power to regulate short-term rentals, often at the urging of industry lobbying.
Ohio Senate Bill 104, introduced by Senator Andrew Brenner in February 2025, would prohibit local governments from banning short-term rentals, using zoning to limit them in residential areas, requiring owner occupancy, or capping the number of rentals a person can operate. Counties could require registration but with a maximum fee of just $20. Platforms would collect and remit lodging taxes. The bill had its fourth hearing in May 2025 with a substitute accepted, but it has not advanced further.15Ohio Legislature. Senate Bill 10416Greater Ohio Policy Center. Bill Tracker A separate Ohio House bill, HB 161, would move in the opposite direction by raising taxes on short-term rental properties.17Statehouse News Bureau Ohio. As Short-Term Rentals Expand, Ohio Cities Add New Regulations
North Carolina Senate Bill 667, introduced in 2023, would limit local authority to impose registration, licensing, or operational restrictions on homeowners renting their residences. As of mid-2026 it has not been enacted. North Carolina courts have already constrained local power: the state Court of Appeals invalidated Wilmington’s registration-and-lottery system in 2022, and state law generally restricts cities to regulating rentals through zoning tied to land use rather than business activity.18Wake Forest Law Review. Short-Term Rentals and Long-Term Consequences in North Carolina Cities
Colorado took the opposite path. House Bill 1117 in 2021 granted local governments explicit authority to regulate short-term rentals, producing a patchwork of local ordinances. A proposal to reclassify rentals from residential to commercial property tax rates failed in 2024, and a vacancy tax aimed at empty homes was modified to exclude short-term rentals before dying in the 2025 session. Some Colorado mountain towns already tax rentals far above hotel rates — Aspen charges 21.3% on rentals compared to 11.3% for hotels, and Steamboat Springs charges 20.4%.19Summit Daily. Colorado Short-Term Rental Regulation: New Organization Forms
Enforcement Reality and Platform Pushback
Writing a rule is not the same as enforcing it. Research cited in advocacy materials suggests fewer than 10% of short-term rental operators voluntarily register and pay all applicable taxes without prodding, and many cities now use compliance software that scrapes rental sites, identifies unlisted properties and their owners, and generates enforcement letters.20Granicus. Short-Term Rentals Host Compliance Even so, New Orleans had issued about 2,500 licenses as of early 2025 while thousands of unlicensed listings remained active, and staffing shortages in the city’s rental office hampered oversight.14WWNO. Explaining New Orleans’ Short-Term Rental Saga
Platforms are spending heavily on the other side. Airbnb spent $19 million on state-level lobbying in California in 2025 and $360,000 on local lobbying in Los Angeles alone, launching a “Save Our Services” campaign ahead of the 2026 FIFA World Cup. A Dallas ordinance from 2023 was blocked by a court injunction after a host lobbying group sued, and the city appealed to the Texas Supreme Court in 2025. Atlanta suspended enforcement of its 2022 ordinance after complaints from hosts.21Shelterforce. Airbnb’s Lobbying Campaign Meets Resistance Across World Cup Host Cities Platforms have also argued that Section 230 of the Communications Decency Act shields them from local enforcement obligations, an argument that has met mixed results in court.22Cornell Law School. Short-Term Rentals and Regulatory Frameworks
Moratoriums can also fail politically. Ocean City, Maryland imposed a moratorium on new short-term rental permits in residential districts in February 2025 and extended it through January 2027. A petition drive gathered 1,159 valid signatures, exceeding the 990 needed to trigger a referendum, and the City Council rescinded the moratorium in March 2026 rather than face a vote. Voters had earlier rejected stricter rules by a margin of 834 to 800.23Avalara MyLodgeTax. Ocean City Maryland Ends Short-Term Rental Moratorium in Residential Districts
Why Cities Are Regulating
The push behind these ordinances is largely about housing cost. Studies have linked short-term rental growth to higher rents and home prices. One Los Angeles study found rentals increased home prices by 3.6% countywide, with increases reaching 15% near major tourist attractions. In Boston, neighborhoods with high rental concentrations saw monthly rent rise by $93.24Michigan State University Extension. Short-Term Rentals and Housing
Global short-term rental listings have grown from over six million in 2019 to more than seven million, with much of the increase coming from commercial operators managing multiple properties. Researchers describe this shift as a move away from the early “sharing economy” model toward a more capital-driven one, and they identify a “regulatory gold standard” that pairs mandatory registration with a requirement that operators live in the property they rent. The goal is to give hosts a personal stake in their neighborhoods and give enforcement officials a way to distinguish legal listings from illegal ones.22Cornell Law School. Short-Term Rentals and Regulatory Frameworks
The constitutional questions are not yet settled, the preemption fights are live in multiple statehouses, and both cities and platforms are well-funded. What has ended is the period when short-term rentals operated largely outside any regulatory framework.