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[00:00:00] Sarah: ​Hello, listeners. Welcome back for another great episode. My name is Sarah Karakaian.

[00:00:09] Annette: I am Annette Grant. And together we are–

[00:00:11] Both Annette & Sarah: Thanks for Visiting.

[00:00:12] Sarah: Let’s kick off this episode like we do every week, and that is sharing one of you, amazing hosts, who’s using our hashtag on Instagram. That’s hashtag #STRShareSunday. We’ll share you here on the podcast, on Instagram every Sunday, to our entire email list. Annette, who are we sharing this week?

[00:00:28] Annette: This week we are sharing @lazy_pines_cabins, and you can find them online at www.lazypinescabins.com. Going to give their direct booking site some love. And Angela and Tracy are dog lovers, and you will see this over and over, over again. And we appreciate Angela because she actually called into our Hosting Hotline and asked a question also.

[00:00:51] So Angela, thanks for being a loyal listener and super user. We love when people use a hashtag and call in. And one thing that I highlight in her Instagram account is if– please go to her account. You can see where she is pinning. You can pin very important or posts that you want to make sure that your followers will always see or people landing on your page.

[00:01:15] And I love one of the things that she has pinned. She has this diagram explaining all four of her cabins, the size, the location, the weather, the yard, and the number of dogs. So she gives you a breakdown in a very, very small area. So it’ll help you choose what cabin you should choose.

[00:01:34] So I just really love this grid. I haven’t seen this done before. So check that out. And then the other thing too is Angela is just so passionate about her dogs, and other people’s dogs. She’s very clear throughout all of her advertising that there are no pet fees. And so we salute her for leaning in on how she would like her dogs to be welcomed into the home. She is doing the same.

[00:01:58] And one last thing I want to note, she has an experience for her pet owners that have to do with them being able to engrave their pet’s name on dog tag. She has a rainbow bridge for some of her dogs that have passed away that they can participate in. So it is just really dog-friendly.

[00:02:15] If you go to her page, which I encourage you to do, please go, follow, and check out that grid, and then check out all of her pet posts. Well done, Angela. Thanks for using the hashtag. Sarah.

[00:02:25] Sarah: Let’s go to school.

[00:02:26] Annette: I know.

[00:02:27] Sarah: Let’s go to college. You know I’d go back.

[00:02:30] Annette: You would go back. If I could hang out with this guest, I would go back. Well, I think one of my favorite quotes from today’s episode is when our guest says the right to bear guests. Yeah, exactly what Sarah just did. It didn’t make me chuckle, but I just really loved the reference there of the right to bear guests because it really does– you have a mindset shift when you hear that in parallel to the right to bear arms. So just shows what that debate could be in cities and towns.

[00:03:00] Sarah: Today’s guest is Brumby McLeod. He’s an associate professor at the College of Charleston School of Business in the Department of Hospitality and Tourism Management.

[00:03:11] Annette: Our first, I think, true academic.

[00:03:13] Sarah: Yeah. Love it.

[00:03:14] Annette: I know. Well, if there’s been other academics on I’m sure you’re smart, but not in this– I don’t think you did a dissertation on it.

[00:03:21] Sarah: I’m sure you’re smart.

[00:03:24] Annette: But you didn’t tell us you did a dissertation on short-term rentals.

[00:03:28] Sarah: He’s a research fellow with the Office of Tourism Analysis and the Riley Center for Livable Communities. The focus of his research is an overnight accommodation with a primary focus on housing, short-term rentals, and tourism. In 2018, Brumby received a US Fulbright Scholarship to explore the nightly rental phenomena in Iceland.

[00:03:48] We met Brumby by way of connection with our good friends over at Rent Responsibly. They are working with Brumby on their State of the Union Survey. Thousands of hosts took this survey, and right now, actually, Brumby is going through all the results. Don’t fret. We will have Responsibly on and share the results with all of you.

[00:04:08] But in today’s episode with Brumby, he really takes us through the vacation short-term rental experience from 2003 all the way up until now. And we ask him the question, of course, where does he see our industry going?

[00:04:22] He’s so good at remaining neutral. He gets excited seeing everyone’s point of views and then putting them together so he can create research and solutions for various aspects of the industry, whether it’s small government, whether it’s investors themselves. So Brumby is a really cool guy, and we can’t wait to dig in with him with you today.

[00:04:44] Brumby, welcome to the show. We are so excited to have you here today.

[00:04:48] Brumby: Thank you. Glad to be here.

[00:04:50] Sarah: We want to jump right in and give us a scoop prior to academia. What were you doing, and what led you to studying essentially travel, short-term rentals, overnight accommodations, that whole industry?

[00:05:07] Brumby: I think the main influence was my childhood, going to stay at second homes. So I grew up in Roswell, Georgia, north of Atlanta, and someone in the family had a home down in Ponavidra in Sea Island, maybe an aunt or uncle, or a great aunt, great uncle. And then my grandmother built a home in a mountain community called Big Canoe.

[00:05:28] And so as a child, I was exposed to second homes. And so when I was in school out west at University of Montana, I decided I really liked college and wanted to think about being a college professor, saw that there was an opportunity to study tourism, and you ultimately have to come up with a topic.

[00:05:48] And I kept reflecting back to these second homes I kept visiting, and there was a body of research on second home tourism that I came across while in Montana. And so when I went to study my PhD, I started reading that literature.

[00:06:05] Annette: Can you give us a timeframe just to root us in– because so many of “our listeners,” are accidental hosts, and they just happened upon it, but you were so intentional about this. What year did you start studying the second home phenomena?

[00:06:24] Brumby: So I went to start my PhD program at University of Nevada Las Vegas in 2003.

[00:06:31] Annette: So no Airbnb.

[00:06:32] Brumby: No Airbnb. And I started seeing research on it when I was at University of Montana in 2002.

[00:06:41] Sarah: What was the discussion then?

[00:06:43] Annette: Yeah, what was the research? What were people talking about?

[00:06:47] Brumby: Well, I remember when I got started the program at UNLV, you are taking mainly research, and methodology classes. So it’s not like I’m in classes on tourism. I’m in classes on structural equation modeling and qualitative research methods. And so you’re in class with economics, and business, and engineering students, and maybe some education students that are all working to become researchers, or at least that’s what they’re learning about.

[00:07:15] And so you start thinking about what’s your dissertation going to be on, or who’s your committee going to be? And I remember approaching a gentleman and asked him if he’d be interested in being on my committee. He said, well, what are you thinking about studying? And I said, second homes.

[00:07:32] And he looks at me and goes, what the hell does that have to do with tourism? And that was around 2004. And so this idea that it was driving travel. I knew it was, but it wasn’t mainstream. And certainly, it wasn’t an investment class. People had a second home because it was all related to their vacations primarily.

[00:07:54] Sarah: So I know that Airbnb came to the scene in 2008. When did Vrbo come on, Brumby? Do you know?

[00:08:00] Brumby: Yeah, so when I was actively writing, preparing my dissertation, there was a group raising money to buy a number of websites that were like A1 Vacations, Vrbo, VacationRentals.com, and that group was HomeAway. So they had raised the capital to then go buy websites. Most of the communities that had a large proliferation of vacation rentals, though, that was being managed by the property management companies and the local realtor site. So they would often have their own website or put together an annual catalog that advertise their vacation rentals.

[00:08:43] Annette: Wait, this is brilliant. I wonder, do you have any these? So there would be a physical catalog from, let’s say it is Sea Island, and it would have all of the homes with all of their breakdown. I guess they’d still do that in real estate magazines, but they would publish these and send these out to potential guests.

[00:09:00] Brumby: Yeah. When I was on my Fulbright in Iceland, the unions did that. So often there would be small, rural cottage neighborhoods that were built out as cottages, and the unions would profile each of those homes, and they would be for rent. And they still produce some of those catalogs.

[00:09:21] Annette: So what was your actual dissertation topic then?

[00:09:25] Brumby: So I was interested in why someone would make their home available to others to reap. So I called it the willingness to host, was the concept I was– we call it a construct that I was coming up with. And you don’t have a lot of resources, so I was piggybacking on a study that my colleagues, my teachers were doing in Costa Rica.

[00:09:50] They were doing a intercept of over 20,000 people at the airport in Costa Rica. And there are two airports. And if someone said they owned a home there, they threw them out of the study. So the people that got thrown out of the study then went to my study, because they were living abroad, but owned a home. And so I was trying to get at how the home was being utilized and how often it was rented or if it was rented at all.

[00:10:17] Annette: This is fascinating. What were you trying trove though? Was it they have an affinity for hosting folks, or maybe they couldn’t quite afford the second home, and they wanted to offset that? Did you have a thesis that you were trying to prove, or were you just trying to collect data?

[00:10:34] Brumby: Yeah, we were looking at the relationship of personal attachment, place attachment. So how they identified to the place and why they were dependent on that place. So a two-dimension structure, a place attachment, and then how that led to the willingness to host.

[00:10:52] So if the attachment was stronger, the willingness to host would be stronger. And ultimately, you’re trying to conduct your first significant research project and get approved by your researchers, and we later on published a paper on the concept of willingness to host.

[00:11:11] But as you know, 2008 and beyond, the word hosting became something that was a pretty normal topic. But this idea of second home tourism is far outweighed now by people purposely investing in– it’s an investment class, the short-term rental. But short-term rental wasn’t really used.

[00:11:36] Annette: During the initial dissertation and research, what was the through line that you saw through the willingness to host? What is something that was shocking to you or interesting or something that– you were probably one of the first ones to study it, so what was something that you were seeing again and again with the willingness to host?

[00:11:53] Brumby: That they weren’t being rented.

[00:11:55] Sarah: Oh.

[00:11:56] Annette: What do you mean?

[00:11:56] Sarah: There’s willingness to host, but there wasn’t a willingness to rent?

[00:11:59] Brumby: Yeah, to share, which we still see today. So imagine visiting friends and relatives. So your friends are coming, or you have the beach house and say, yeah, you can use it in the next two weeks. It wasn’t actively in a rental pool.

[00:12:13] Annette: Okay, so they were willing to host, but not accept money for the exchange there.

[00:12:19] Brumby: Yeah. And I had not really thought through at that time in the research process and where things were. I was just trying to get about were they willing to share the home. And so hosting didn’t really mean rent to me. I didn’t ask it really that way.

[00:12:38] Annette: Oh, see, that’s how ingrained it is in our head, hosting. We’re hosting for money. You were just trying to say willingness to host anyone that was not their core family.

[00:12:50] Brumby: Yeah. Would you let others use it?

[00:12:53] Annette: Okay.

[00:12:54] Brumby: And we still see that today heavily particularly if it’s someone’s second home that they use. So if we see that they use it, there’s often a time that they share it without a charge. And a lot of our companies like Key Data that collect statistics, a lot of times you’ll see a back out of friends of the owner. There’s a level of occupancy that’s not part of the paid occupancy.

[00:13:21] Sarah: So then your journey then takes you into what, Brumby? What was your next step after a dissertation? What was the next move for you?

[00:13:29] Brumby: Yeah, so that was in grandiose. Looking at a country, that was my sample. And then where the sample was coming from, where these ho homes were, they were centered around little tourist regions, or second home communities of expats, or Tecos that came back. Tecos are Costa Ricans that came back to their favorite spot in their country, but they were living abroad.

[00:13:54] But it started to become rather clear to me when I moved. I took a job at University of South Carolina. I was still studying it, but I wasn’t in a community that had a lot of second homes. But when I moved to Charleston and took the job at College of Charleston, that’s when I started to study it full-time and regularly, and it made sense because I was in a community that had a number of different towns, cities, that were taking different approaches.

[00:14:23] And I think what I did get out of Costa Rica, though, is that it really has to be looked at at a local level, a neighborhood level, a community level, even maybe one side of the community versus other. So if it’s an island, it might be the side that’s on the water, not necessarily the homes in the middle. And started looking at this as a local tourism issue, or a local jurisdiction challenge.

[00:14:52] Sarah: Okay. And then you’re in Charleston. What year is this, and what’s happening in the second home industry? Has Airbnb been introduced, and what does that do to your research and to your day to day?

[00:15:08] Brumby: So for me, when I arrived, the first thing I looked at is how are they describing the market? And it was being described by hotel performance. And so I was trying to get the attention of the the DMO, which is Explore Charleston, and the county and city governments say, is this accurate? Are we really telling the full story?

[00:15:30] And so I I worked to quantify what was going on. And reached out to companies like ADESta Metrics who had been measuring vacation rental performance in the mountains for a number of years. So this was August, 2010, and I’m saying, listen, if we looked at what’s paid in on tax revenue from lodging taxes, the hotels explain less than half of it.

[00:15:58] And so we’re not telling the full story. And so then I started working to create measures so these beach communities, and those doing vacation rentals could share the story. And so if you looked at something like Kiawah Island, they’ve consistently had over 1,300 vacation rentals for over a decade.

[00:16:20] And they only had one hotel at the time, 255 rooms. So they wanted to tell that story and needed to tell that story. And then if they looked at things like their business licensing, vacation rental was almost all their licensing. It wasn’t they were operating vacation rentals because someone was coming to maintain the vacation rental.

[00:16:41] So all their business licensing, probably 90-plus percent was related to the vacation rental business and whether that was painting the homes, or repairing the homes, or managing the homes, or the real estate involved.

[00:16:56] Annette: What were your thoughts when Airbnb came on the scene and started to be more mainstream, and not just second homes, but renting your primary home or a portion of your home? Did that completely disrupt what you’ve been studying? When it’s no longer second homes, it’s primary homes and that investment community?

[00:17:14] Brumby: Well, because I was focused on communities, it showed up pretty early, particularly in the urban environment and the residential neighborhoods that weren’t beach communities. We were dealing with decades of vacation rentals in these islands, like Island Palm, Sullivan’s Island, kiawah Island, Folly beach. And the ski communities were the same.

[00:17:40] This isn’t new. What was new was the urban environment and its proliferation into what we would not consider a vacation rental home. And I watched that happen in Charleston. And the regulations, even though we’re in the same county, each one of these towns has a different approach to how they want to engage in the short-rental business or if they want to at all.

[00:18:05] Annette: Does every school have this hospitality, tourism, specialty like you in short-term rentals, or are you far and few between? Sarah and I, and we’ll let the listeners know, we did have a conversation with Brumby before this, but we’re like, oh my gosh, he’s truly the first academic that we’ve had on the show.

[00:18:26] We’ve had people that have studied it because they want to fight for their right to short-term rental in their area, but not as their profession. So how many other Brumbys are there out there in the US?

[00:18:34] Sarah: There’s only one Brumby.

[00:18:35] Annette: Right

[00:18:36] Brumby: Yeah, there’s one Brumby, but there’s a lot of ways to study this. I call it a lens. How are you looking at this? And so anyone in housing– there’s not one at every university by any means, but if someone chose to study housing, you have to look at non-primary residents as a class, because probably the majority of homes are not primary residents now, especially if you look at multifamily.

[00:19:04] And then if it’s not primary residence, then what is that asset doing? What’s the inventory doing? And so there’s people in economics and housing, political science, housing policy. In the tourism space, it’s not uncommon. Now, matter of fact, I’m getting ready to go to a conference, Travel and Tourism Research Association, and there’ll be people presenting research on vacation rentals.

[00:19:34] And then you can always look at, if you’re into tourism spending and economics, it’s like, well, does someone in a vacation rental spend differently than someone in a hotel? And so anyway, I’m not alone, but in the beginning, I think it was unusual. But now, I have a colleague who is a prolific researcher, and a lot of his studies are specifically about Airbnb.

[00:20:02] I don’t tend to use the words like Airbnb and Vrbo. I think of those as brands of distribution channels. It’s like saying Kleenex instead of facial tissue. So I tend to talk about the unit and how’s the unit being used, which is stale, but Airbnb is definitely the Kleenex, the facial tissue.

[00:20:22] Annette: Do you say short-term rental or vacation rental, or do you just use overnight stay?

[00:20:27] Brumby: I’ll say both.

[00:20:29] Annette: Okay.

[00:20:29] Brumby: And often that’s defined by a number. And sometimes those numbers conflict. There might be a state statute, that’s different than the city ordinance. So sometimes we see differences at levels of government. And then you might have a neighborhood association or property owner that doesn’t allow it at all.

[00:20:51] And so I’m fascinated by the conflicts and the layers of government and quasi government. I think that’s probably one of my favorite places to study right now because it’s just within one region. I see these differences. We have an island here called Sullivan’s Island that almost two and a half decades ago banned short-term rentals. And it’s an island.

[00:21:16] And it’s probably one of the most pricey zip codes, but they still have just under 40 vacation rentals left from the grandfathered in. But the island right next to them, which is just across a bridge of about a hundred yards, they have over, 1,200 vacation rentals. And so I think it’s neat how these communities decide what they want to be.

[00:21:39] Annette: You mentioned on our first call with you, and I think our listeners would be interested in this, there were two topics I want to go over. One is you were sharing with us in some of your research where vacation rentals are absolutely vital to the community, and then there was another one though, that you had mentioned where it’s decimating the community.

[00:21:57] What are you seeing when there becomes too many vacation rentals in a smaller area? And I can’t remember the exact city that you were chatting about.

[00:22:08] Brumby: Yeah, I might mention one when we’re talking, but I think those are the two extreme positions. I think of housing of as food. We actually have plenty of places to sleep, but our distribution of it is the problem. And so you have a number of communities where there are primary residence maybe for a small number, and then the rest are second homes. And then it’s, what are those second homes doing?

[00:22:34] Are they sitting empty, or are they part of the rental process? And so when a group of us did a study on mountain ski towns, we looked at something like Park City that had about 10,000 units in it. And under 2,000 of those were primary residences. And that meant the other 8,000 were in the second homes.

[00:23:00] But of those second homes, maybe 1,800 to 2,000 of those were long-term rentals. So that leaves us with about 6,000. There were only 2,000 vacation rental licenses. So that suggests that 4,000 units are staying open and sitting there just for the homeowner use or the friends of the homeowners.

[00:23:23] And so that’s one example, but when we look at our housing and we quantify it, I like to ask the question, what is our housing doing? Where do your residents sleep? Where do your guests sleep? Where does your workforce sleep? And I think where your workforce sleep right now is probably one of the hottest question. There’s competition for that housing. And often we’re providing that housing to the highest payer, and the highest payer is going to be the short-term stay.

[00:23:56] Annette: How do we combat that though? Because I know in ski towns, that’s a huge hot topic. And even in the beach towns, people are driving an hour, hour and a half, to get to the property. What is the solution for that? Because I don’t think the workforce is also staying on a ski in, ski out property like that. That’s where I can voice my opinion, is freeing up those homes isn’t going to help the workforce housing issues. What are you offering to those complaints or to that issue that is housing?

[00:24:26] Brumby: Yeah. Zoning and investment in housing. Zoning, you see that, de restricted housing. Problem is we’re late to the game in many of these scenarios. And so the cost of land and development. But I also think there’s a natural solution to the market. So if you look at something like Park City, you see a lot of development outside of the city, just outside the city limits.

[00:24:51] You see other towns appearing that are bedroom communities. And that’s the natural cycle of cities. That’s what happens. The cost goes up, and then new cities develop. And so some of this, I think, is a natural economic cycle or natural development cycle of cities.

[00:25:08] But I think for the local government, it’s zoning. What’s interesting about local government is often the second homeowner can’t vote. Because they can only vote in their primary residence. So I think planned unit developments where there’s homeowners association and property owners associations, those protect the property rights of owners that might get voted out.

[00:25:37] So at least they get to vote. But if you’re in a community where you’re a second homeowner and it’s not in a HOA, you don’t have a vote. And so we’re seeing community swing. We just saw last year, Folly Beach. When I first started doing work for Folly Beach, they had about 450 vacation rentals out of 2,200 homes.

[00:25:58] And last summer it was over 1,300 vacation rentals for 2,200 homes. And that’s enough. And so they put in a cap, and they’ll work through that. But a lot of those homeowners, if their second homeowners didn’t get a vote on that.

[00:26:15] Annette: I’m pretty sure that was the beach that you were telling on our first conversation because those numbers were incredible, the growth there. So the actual primary residents are very few and far between there now.

[00:26:26] Brumby: Yeah.

[00:26:26] Annette: Also, in our first conversation, you’re going to have to re-explain this too. It was interesting. You were sharing with us this thought process on if you have a friend or a family member stay in your home, the usage of your home, and who gets to dictate that. So if I have my sister or brother come stay with me, why aren’t they paying me, or why aren’t paying taxes on that? Do you remember that scenario that you said of like, when does it stop crossing the line of being able to have overnight guests?

[00:26:54] Brumby: I have these two extremes because I try to listen to the viewpoints and try to understand it, and I think one is this property rights. Do I have the right to bear guests?

[00:27:06] Annette: That’s what it is– right to bear guests.

[00:27:08] Brumby: Yeah, right to bear guests, and is that a fundamental right? In some states it is, particularly if you’re at home, so if you’re boarding or allowing someone. And then I also think about the other extreme. Just because I have beer and liquor in my house, doesn’t mean I can open a bar. There’s license and things like that.

[00:27:28] So there’s these two extremes, constitutional extremes, of how you might look at this. But I think what you’re referring to is the idea of the sharing. And so let’s say my friend said, probably you can go down to Folly Beach and enjoy the week. It’s on us. If that house is renting for 5,000, 6,000 a week, shouldn’t I get a 1099 that says I just received a 6,000-dollar gift? Anyway, those are just some of the scenarios I play with in this debate.

[00:28:05] Annette: People, you probably get in some heated debates. Who are the people that you see are so passionate against the right to bear guests? What’s their beef?

[00:28:16] Brumby: I think it’s communities that are dealing with affordability. Although short-term rental isn’t the cause it’s related. And so if short-term rental is penetrating your multifamily housing, so it’s appearing in apartments and things like that, and your workforce is having to commute in far, the people tend to get emotional.

[00:28:43] And then the other is the person that’s next to an Airbnb. You got me to say Airbnb, but next to a vacation rental. That drives them nuts. But I always jive a neighbor who always has stuff in his garage and friends over, and I was like, you can get a long-term resident that brings those same pieces.

[00:29:01] But someone who’s affected by it consistently and annoyed, they can get real passionate. I do not get heated debates, though. I just nod my head and agree because I’ve heard so many viewpoints now.

[00:29:14] Sarah: Well, for you it’s probably like gold to hear all sides and all thoughts. Brumby, my question to you is there seems to also be a change in the way people are living in general– digital nomads, people who don’t want a primary home, and they do want the flexibility of living in any town, and we’re seeing it as “housing providers.”

[00:29:38] It’s really big in the midterm rental space. You can say that you host nurses, but in my experience it’s been a lot of people just, I want to hang out in Columbus for six weeks. And then I’m going to go off and hang out in other city. How has that infiltrated your studies at all or impacting housing in general?

[00:29:58] Brumby: Yeah, we’re seeing responses on some of our survey studies about the midterm stay and how long that is. There’s companies starting that are trying to get better utilization of inventory. Right now, one that comes to mind on the affordable housing side is CoLife, and they’re basically taking empty bedrooms. It’s the food and hunger scenario.

[00:30:23] Everyone who’s had a college kid move out, their kids have gone off to college, has an empty bedroom, and those empty bedrooms add up quickly, particularly in suburban neighborhoods. How do you get those utilized?

[00:30:36] I think that housing is just flexible, and I think with our workforce and moving and transitioning, it made me think of something. I remember one of my jobs coming out of school, I worked for a company called Waste Management, which was a massive, company, but I worked for their environmental remediation division.

[00:30:53] And so I would be on projects, and I stayed in those extended stay hotels for weeks at a time. And so there’s a lot of people in that scenario that are temporarily assigned, or transitioning, or doing contract work. And the home ownership’s, expensive, and it can be boring being stuck in one place.

[00:31:13] So I think we’re seeing products though, or at least I’m seeing products in community though that look a lot more like purpose-built vacation rentals, and they’re being built with pre-approval to be– yeah. Okay. Then they’re a hotel. But they’re offering the residential product.

[00:31:33] And so you asked me what I had called this. I actually called it residential short-term rental for a long time because that’s really what the difference is between the other transient accommodations, a bed in a box at the hotel with the bathroom, bed and a bath. Now it’s, I think, the residential product.

[00:31:53] Annette: Do you encounter the hotel industry? We tell the story often that Sarah and I met at a city council meeting here in Columbus because they were wanting to put some really strict restrictions on the amount of nights that we could have at a residential short-term rental.

[00:32:07] And I feel like that was just the hotels had infused a lot of dollars to make that happen. What do you see with hotels and short-term rentals? I know they’re moving into the space, but do you work with hotels a lot? Do you hear a lot of noise from hotels wanting to clamp down the amount of short-term rentals?

[00:32:24] Brumby: Well, we see that in cities. Vegas is one that’s been very anti short-term rental, but our largest operators of vacation rentals are hotels. So if you’re a Q island and you have the sanctuary, you also have 600-plus vacation rentals in your portfolio. And your portfolio has an advantage over the other vacation rental companies because you provide them access to the resort amenities. Wild Dunes is that way.

[00:32:53] And so I think in this market, I didn’t see that because they’re all members of the Convention Visitors Bureau, and they’re big operators of vacation rentals. But I have seen that and read about it and talked to people in New York. I’ve had groups that want me to do a study for them, but it’s very clearly to support a position they hold. And I don’t do that type of research.

[00:33:18] Annette: That’s fair enough. And talking about research, I do want to just mention that we had the pleasure of meeting Brumby through our partners, Rent Responsibly. And can you share how you met Rent Responsibly and how that relationship has grown over time?

[00:33:31] Brumby: Yeah. I met Dave Krauss through– there was a lot of advocacy going on in Charleston when the short-term rental had become really a battle around HomeAway and Airbnb being in the urban districts of Charleston. I had designed a forum with some folks, Dave Krauss being one of them, and we did a public listening session in our public library in downtown Charleston. And that’s how we met. And then I ended up doing some work with him when he was running NoiseAware.

[00:34:08] Sarah: Yeah.

[00:34:10] Brumby: Did a neat study with them on noise across all sorts of different housing units that did not show short-term rentals being louder. Then we found that the long-term rental in general, just because of the number of people consistently coming in and out were– but that was our sample, and we put the devices in a number of units. And I think the loudest one we had was someone that had gotten in a political debate around the election in 2016.

[00:34:39] Annette: Makes sense. Yeah, that tracks, for sure.

[00:34:43] Brumby: Someone had put equipment in to dry out a unit that had gotten super wet from a hurricane. And so noise comes from all sorts of places. But that’s how I met Dave. And we did the 2021 State of the Industry study with him. And we’re just now finished this year’s study, State of the Industry. And we also did a local government component nationwide.

[00:35:08] Sarah: Ooh.

[00:35:09] Brumby: So we’re looking at that. Several thousand participated in that one.

[00:35:14] Sarah: We’re hoping to have Dave on the podcast to share with us and our listeners the results of that.

[00:35:19] Annette: Yeah. And listeners, if you didn’t get to participate this year, these are things to be on the lookout for. Brumby, that’s what I want to ask, if you could offer– what do you see the best use of hosts’ time to be their own advocates? You’re in these cities. You see what’s happening.

[00:35:35] What’s best that we can do to take care of our second homes, to take care of our investment portfolio, so that we can still have the right to bear guests? Do you have any advice for us? What would you offer to our listeners?

[00:35:47] Brumby: It’s engagement in the local community. And then I think what I’ve seen Rent Responsibly do in that industry is it’s a legitimate industry. There’s a legitimate use of an investment asset. Be a good owner and good neighbor. Stay involved in your local community.

[00:36:08] And there’s certainly an economic benefit to the community from it. Almost all of these homes are paying a higher property tax rate, but they’re not sending children to the school and things like that. So that’s a plus. They’re all collecting the lodging, accommodation taxes, and often they have additional taxes that they’re allowed to add in, such as extra hospitality or beach renourishment, things like that.

[00:36:33] And so being a legitimate operator, I think you’re going to have to be involved, or communities are going to be talking about caps, for a lot of them. And I don’t think that’s a bad thing, but how are they coming to that number aware, and getting operators that aren’t following the rules. Many communities have had rules for years. They just weren’t aware that they needed to be applied or followed.

[00:36:58] Annette: I know, let’s say our area, for example, liquor license, really hard to come by. There’s only X amount per zip codes, and it’s just for sale to the highest bidder. Have you seen the short-term rental licenses have an underground selling at all? Have you encountered that?

[00:37:17] Brumby: Well, I knew that was a problem in some research in 2017 , ’18, when we were seeing caps and swings in communities. But I’ve seen some really good local government policy. So for instance, a community called Mount Pleasant, they had a cap, and of course, the first year, everyone rushed, and the cap was filled.

[00:37:39] But then they realized, we need to only allow these licenses, the people that prove they’re renting. And so they put in a requirement of at least, I think, it was either 24 to 30 days that you had to show evidence, at least four different tenants, four different guests across four different stays.

[00:37:57] And that kept it really balanced. I think those are good practices, how you administer the licenses. But I spend a lot of my time with local governments because that’s where I’ve enjoyed the space. And so they’re sharing best practices, and they want to know what’s working.

[00:38:16] Different types of towns from beach communities, river communities, downtown communities, neighborhoods– I love some of the zoning where a neighborhood chooses to allow it. We have a really unique setup in Charleston. There’s about 62 neighborhoods, what we would call the old neighborhoods, and one of them is called Cannonborough, and that’s the only neighborhood in around 2012 that said, we want vacation rentals.

[00:38:40] And they’ve seen this phenomenal economic boost in their community with the best restaurants, the most foot traffic. And their rule was pretty simple. It had to be zoned commercial already, and then that unit could be converted. So it attracted a lot of investment that was long-term college rentals– four roommates, six roommates, six cars, and that’s gone away. And it’s created a really neat, revitalized community.

[00:39:09] Sarah: Interesting. Brumby, to say your favorite word, Airbnb, we’ve tried to use short-term rental or furnished rental, but in our marketing efforts, trying to find more listeners and more people to engage with us, you have to say Airbnb. It’s what it is. But anyway, there’s a hashtag that I’m sure you’ve heard of Airbnbust post-COVID, where people could only drive to “getaway destinations.”

[00:39:36] And the hotels were also an area of uncertainty in terms of health issues. But now things seem to be “normalizing.” What do you think the future is of short-term rentals? And if you don’t want to state maybe what your personal opinion is, what do you think the masses are talking about?

[00:39:55] Where do you think this industry will be in the next few years? Do you think it’ll continue to be an option that travelers want and need? Do you think it’s going to regress at all? Any thoughts in that area?

[00:40:07] Brumby: I see the options of transient rentals being there for a long time. I think the product types will catch up, purpose built. I see it being issues in communities for a while, but I think there’s a saturation that’s occurred. You look at something like in Asheville and there’s just so many.

[00:40:29] There’s got to be a point that people are like, yeah, it’s not worth it, or they realize there’s a lot more skill involved in managing it and marketing it to make it make sense. And I think we’ll see that occur when the housing market adjusts right now. But we’ll see. It’ll still be there.

[00:40:49] Sarah: Yeah. Well, that’s great.

[00:40:51] Annette: Interesting. And then my last question is, Brumby, since we do have an academic on the show, is there a book, an article, anything that you would guide our readers or ourselves to that you just think is of interest or something that you encourage all willingness hosts to read, to consume?

[00:41:11] Brumby: Well, the academic stuff sits behind subscriptions to journals, Annals of Tourism Research, Journal of Travel Research.

[00:41:20] Annette: Those don’t show up on my credit card statements.

[00:41:22] Sarah: That’s on Amazon’s bestsellers.

[00:41:26] Brumby: Yeah, they’re not. And just access to one article if you don’t have it through your library. It’s not a popular read, any of them.

[00:41:37] Sarah: Fair enough.

[00:41:38] Brumby: But I think many of the classics around real estate investment are worthy reads because it is, at the end of the day. It’s a real estate asset with an intended use. It’s a shorter stay. But it’s hospitality, and it’s real estate coming together, and I think that entrepreneurial side, which is what made this so attractive.

[00:42:03] My biggest worry in this space has been the institutional investor. They are heavily invested in the real estate investment trust in the long term. And if they choose to do some short term, or when they decide to start selling, what’s that going to look like? But I think any of the real estate investment books, I’m trying to think of the Millionaire Investor.

[00:42:26] Sarah: Mm-hmm.

[00:42:27] Brumby: I think that those are some of my favorite. And all you’re changing is what’s the term of that rent, and how short and how much, and the seasonality. But I think those are all classics.

[00:42:38] Sarah: You brought up an interesting point, the institutional buyers. We’ve seen a couple of them come to our market into Columbus, Brumby, and around 2021, ’22, they wanted to come on the podcast and share about their efforts, but Annette and I were not fans because our listeners are independent hosts. Usually, they own and operate their own rentals, and they’re like, this is not going to resonate. And then in 2023, they fall apart.

[00:43:04] Annette: They’re gone.

[00:43:04] Sarah: They’re gone.

[00:43:05] Annette: Or they’ve pivoted their entire business. And it’s fascinating to us because they’re just about the numbers.

[00:43:11] Sarah: I have to think, especially with an institutionalized buyer, the operations alone, it’s not as easy as just hiring a cleaner, because that’s how they would pitch it to us on our quick calls, our quick Zoom calls, or just getting to know each other. Oh, we’ll just hire some cleaners and some maintenance guys and buy all these single family homes, and boom, we’re going to nail this. We’re going to buy all of Columbus. And then they fall apart a couple years later. But what are your thoughts on the institutional buyers?

[00:43:34] Brumby: Well, I was referring to the real estate investment trust that specialize in owning homes and not that they’re in the short-term rental.

[00:43:44] Sarah: Oh, okay.

[00:43:45] Brumby: Per se. So little bit different reference. But there’s a lot of people out there competing. The challenge or the problem, I think, that attracted all this in the first place is that real estate is our most lucrative engagement. You and I go to work, and we get a W2, and it’s like, before we see the income, we’ve paid 200 out of our 1,000 into the system.

[00:44:13] Real estate doesn’t require that. We get to bring the revenue, spend it, and then tell them what’s left. If you notice, most of your local business licenses, they tax you on the revenue, not after expenses. And so I think we’re going to see more of that pressure. But as long as the real estate is lucrative and we get to treat income differently than we do from wage income, I think it’ll always be an attractive place to spend our time.

[00:44:39] And I don’t see that changing because so much of the local engagement in these communities. How many times a city council member is a realtor, or a mayor? I see it all the time.

[00:44:51] Sarah: Yeah.

[00:44:51] Annette: Right.

[00:44:52] Brumby: And they’re not going to change it.

[00:44:54] Annette: And maybe this should have been our first question, but we’ll make it our last. Do you yourself have a second home? Are you a willing host, or have you decided that–

[00:45:02] Brumby: Today, I don’t.

[00:45:03] Annette: Okay.

[00:45:04] Brumby: Not today.

[00:45:04] Sarah: But you used to.

[00:45:05] Annette: You have. Okay. I know at the very beginning, you mentioned potentially an aunt or great aunt Sea Island. The willingness to host there, was that them hosting family at that time? When you were doing your dissertation, those family trips, do you ever remember your parents exchanging money for any of these trips?

[00:45:25] Brumby: No, I don’t ever recall them paying them. Big canoe was my grandmother’s and Ponavidra was my grandmother’s cousin or uncle. And Sea Island was a uncle that, that, no way, there was no money. And even in Montana, going to Big Sky or Big Mountain it was girlfriend or a friend.

[00:45:44] And we’d stay and play and go up to the lake. It was all visiting friends and relatives. And that’s what second home tourism really was about initially.

[00:45:57] Annette: That was my question there. You frontloaded that one, but that was my wondering.

[00:46:03] Sarah: Are you open, Brumby, if our listeners wanted to reach out or learn more about your research? How could they do that?

[00:46:10] Brumby: Oh yeah. I think email’s probably best that they could reach out to me at the College of Charleston where I am.

[00:46:19] Annette: We’ll make sure to put that, Annette, in the show notes. We’re thankful for your time. We feel like– after our last conversation with you, we were like, we just felt smarter.

[00:46:25] Sarah: Yeah. Instantly smarter. We’re now–

[00:46:28] Annette: We have the academic on our side, but we’re really excited. Listeners, we are going to share in the future the amazing study that Brumby alongside Rent Responsibly. So stay tuned for that. And if you participated in it, thank you very much. But Brumby, thanks for your time today. This was awesome.

[00:46:45] Sarah: Yes. Thank you.

[00:46:47] Brumby: Thanks Sarah and Annette. I appreciate it.

[00:46:47] Sarah: With that, I am Sarah Karakaian.

[00:46:49] Annette: I’m Annette Grant, and together we are–

[00:46:51] Sarah: Thanks for Visiting. Talk to you next time.