Manage Asset & Risks

OBBB Success Guide for STR Owners and Hosts – Part 1

OBBB Success Guide – Part 1: Policy Shifts That Matter

Passed on July 4, 2025, the One Big Beautiful Bill Act is more than a federal zoning reform bill. Most media outlets are focused on the bill’s impact on housing affordability. But behind the headlines is an impact from zoning reform and local incentives that can shape your STR business.

What the OBBB Act Actually Does

1. Zoning and Housing Reform. The federal government is incentivizing cities and counties to:

Expand housing supply in underutilized urban and suburban zones
Build more mid-rise, mixed-use housing near jobs and transit
Remove exclusionary zoning restrictions
Approve infill development and adaptive reuse projects more quickly

2. Tax Reform and Investment Incentives. Alongside zoning reform, the bill locks in and expands key tax provisions for real estate investors, including:

Permanent bonus depreciation
Expanded Qualified Opportunity Zones (QOZs)
New above-the-line deductions (temporary through 2028 and income-limited)

What This Means for STR Owners

1. Zoning Pressure May Increase. Cities that want federal funds will need to update zoning. That may result in tighter STR regulations, but outcomes will vary by market.

2. Explore Opportunities in Secondary Markets. QOZ expansion and adaptive reuse incentives mean rural and transitional markets may offer new cash flow and tax benefits for STR operators.

3. Additional Competition. As new, professionally built mid-rise units hit the market, your STR may compete against new builds with better amenities, smarter layouts, and walkable access to retail, and transit.

Signature Partners Pro Tips

✔ Track Local Planning Activity. Get ahead of zoning changes by following planning commission meetings and city grant applications.

✔ Refresh Your Property and Listings. Benchmark your property against new construction in your area and proactively invest to keep up and increase the asset value. Small upgrades can go a long way in standing out.

✔ Map Out Market Diversification. Research which markets are gaining QOZ status and consider shifting future investments toward QOZs or STR-friendly municipalities. You may be able to reinvest capital gains with major upside.