Nebraska’s fame as a place for innovation and leadership is legendary. Even before Warren Buffet became the “Oracle of Omaha,” Nebraskans had invented CliffsNotes, the Reuben sandwich, Vise-Grip locking pliers, T.V. dinners, Kool-Aid and Arbor Day, just to name a few.

But that history makes it even more perplexing why this state, which so often has been on the entrepreneurial leading-edge, suddenly would turn against that heritage and ban useful modern innovations like Airbnb and other short-term-rental platforms that help travelers visit Nebraska’s great and historic cities. These services have helped fill the market gap for people coming to the College World Series and other exceptional crowd-drawing events, who sometimes have trouble finding a place to stay overnight within commuting distance.

The Unicameral, itself a unique feature of Nebraska innovation, has been considering legislation that would prevent local governments from outlawing short-term rentals by those who wish to make a little extra cash and perhaps meet some nice folks from out-of-state. Alas, it is having trouble finding a spot on the agenda.

Like similar bills around the country, the Nebraska bill would continue to allow local governments to prohibit sexually oriented businesses, unlicensed liquor sales, sales of street drugs and anything else in a short-term rental that would constitute a genuine public-safety hazard. Municipalities also could still regulate for noise, animal control, fire and building codes, nuisances and the like.

The crux of the resistance to statewide regulation seems to be that hotels, motels, resorts, inns, licensed bed and breakfasts and other clearly commercial operations are just flat-out opposed to what they view as additional competition unburdened by many of the fees and requirements of commercial hospitality. One of the compromises suggested is that the legislation be amended to require short-term-rental customers to pay the applicable hotel tax when they book, which companies like Airbnb already collect in many other communities.

Indeed, there are lessons for Nebraska in how these conflicts already have been resolved elsewhere around the country. New York City recently settled a lawsuit that challenged its statute setting fines of up to $7,500 for hosts who illegally list a property on one of a short-term-rental platforms, with the platforms concerned that the vague language could leave them on the hook.

A more recent settlement with the City of San Francisco could set a pattern for future legislation, in that two of the major short-term-rental platforms agreed to a registration process with the city, allowing hosts to know the requirements and giving them confidence that they are operating legally. Processes in Denver and New Orleans similarly work to pass host registrations through to the local governments.

There can be reasonable regulations to protect neighborhoods and public safety that stop well short of prohibition. Lawmakers and regulators should craft targeted rules that allow opportunities for people with a room to spare to match with tourists who can take advantage of an overnight stay. Nebraska—a reservoir of both good sense and an innovation ethic—has the chance to be a great model for other states with a well-crafted new law.

Image by paulrommer


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