Critical Topics on Vacation Rentals
The Vacation Rentals Professionals Aruba (VRPA) is addressing critical topics around vacation rentals and affordable housing in Aruba. The organization underscores the importance of differentiating between these markets and emphasizes responsible regulation to maintain a balance that supports both the local economy and social needs.
Differentiating Vacation Rentals from Affordable Housing
VRPA clarifies that vacation rentals and affordable housing represent two separate markets with distinct characteristics. A considerable number of vacation rentals in Aruba are high-end properties, while affordable housing serves a different demographic. These differences need to be acknowledged to ensure effective regulation.
Global Issue of Regulation
The conversation around regulating vacation rentals is not unique to Aruba. VRPA points out that in other countries and cities overregulation has had negative consequences and case studies show that banning short term rental or Airbnb did NOT lead to lower house prices, prices kept rising like before due to construction prices and other factors. Scapegoating vacation rental seemed not the answer and damage was done to the respective economies. These lessons have to be evaluated. The association encourages a balanced approach to avoid similar outcomes in Aruba.
Economic Contribution
Vacation rentals play a significant role in Aruba’s economy. According to a comprehensive case study conducted on the island, vacation rentals account for approximately 20% of Aruba’s overall GDP. This contribution highlights the need to support the industry while managing its growth responsibly. Stated in the study of the University of Amsterdam commissioned by the department of economic affairs in Aruba, 70% of vacation rentals are owned by local residence so it is that important opportunity for locals to benefit directly from tourism and money flowing directly into our economy what makes this industry crucial.
When everyone starts paying their fair share the surplus can be used directly to finance affordable housing projects and we are working towards real solutions.
VRPA’s Recommendations for Regulation
VRPA advocates for responsible regulation, recognizing that a balance must be struck to avoid overregulation’s potential harm to the economy. The association believes that effective regulation should focus on proper tax collection, contributing to the local economy and addressing issues like the affordable housing crisis. Bad regulations will drive the business underground and every one will lose. With good regulations everyone will thrive.
Tax Regulation Priority
One of VRPA’s key focus areas is tax regulation. The association believes that by ensuring appropriate tax collection from vacation rentals, sufficient revenue can be generated to address various social issues, including the affordable housing crisis. A portion of these taxes could be directed toward solving this pressing issue.
Collaboration with Stakeholders
VRPA is committed to collaborating with policymakers and stakeholders to develop effective regulations. Since 2015, the association has been actively engaging with the tax office in Aruba to create a fair and sustainable tax system for vacation rentals. The fact that not all laws are enforced and verified is not the fault of the industry. As long as there are no consequences set in place, unfortunately, there will always be individuals who will not do the right thing and have a “wait and see” approach. This costs Aruba millions of dollars every year and it is not fair to the people who are complying.
VRPA aims to work closely with all parties involved to ensure that regulations support both the vacation rental industry and the needs of Aruba’s community.
