Test: LSAT Reading

While hotels have traditionally held a firm grip on the market of vacation-goers, the emergence of companies fostering short-term rentals are dramatically changing the landscape of the travel industry. Before the advent of the modern online forum, short-term rentals were an arrangement limited by sheer logistics. Information about the availability of (and desire for) a short-term rental was difficult to transmit and share. However, with the current explosion of social media and cyber enterprise, the business model of short-term rentals has blossomed.

In 2011, 40% of travelers reported that they would be staying in a short-term rental during the year, as opposed to a traditional hotel. By 2013, this figure had jumped up to a staggering 49%. The short-term rental business is a $24 billion market, holding 8% of the total market of U.S. travel. Rapidly expanding and growing with the innovations of creative renters, the question that hangs in the air is what this means for communities. Short-term rentals have had a polarizing effect in many ways, becoming a source of joy for venturists and cause of dismay for many homeowners.

In recent news, there have been incredible scandals in which short-term renters have abused the property loaned to them, causing thousands of dollars' worth of property damage. Other accusations include disturbing the peace and the commission of criminal acts. Homeowners' Associations (HOAs) have been up in arms, and the legal backlash has been significant. New York enacted firm restrictions on short-term renters, and many HOAs now embed limits on the purposes that a space may be used for, barring short-term rentals.

However, this reaction is an over-reaction, and a detrimental one at that. Cities and towns that set hard limits against short-term rentals are halting the economic growth that would otherwise accompany them. Vacationers are likely to be deterred from venturing out to towns that have banned more affordable short-term rentals. While some vacationers might opt to stay at a hotel in desirable locations, as the short-term rental industry continues to grow, it will become more and more likely that vacation-goers will simply choose alternative destinations that actually allow for short-term rentals.

This is not to say, however, that short-term rentals should be completely unregulated. The key is imposing useful regulations that are mutually beneficial to both communities and to the proprietors of short-term rentals. One potential solution would be to impose reasonable taxes on visitors that use short-term rentals; having requirements for minimum stays could also ensure more consistency for the communities. This also has the added benefit of generating income for towns and cities. There is no reason why communities should see the short-term rental industry as an adversary, when it can just as easily be made into an ally.


Which of the following, if true, best supports the author's contention that bans against short-term rentals would inhibit economic development?

All vacationers enjoy short-term rentals, but would substitute hotels if they were not available.

Many vacationers enjoy short-term rentals and could visit a town or city without them.

The average vacationer is very flexible with respect to the types of housing that they will use when travling, which includes the use of short-term rentals.

Many vacationers exclusively use short-term rentals and would be unlikely to visit a town or city without them.

Vacationers who enjoy short-term rentals tend to spend more money in tourist destinations.

1/4 questions


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