The city has passed a 30 percent rule, which caps the number of homes that can be rented out to 30 percent on each block, according to HousingWire. In addition, there are no stipulations for which homeowners are allowed to rent out their homes. Rather, the new plan is a first-come, first-serve initiative, meaning that homeowners whose blocks receive a great deal of rental traffic will have to rent properties quickly before the 30 percent mark is reached.

HousingWire columnist Jessica Huseman explains the potential problems the new policy will cause - primarily, a heavier financial burden for homeowners who rely on rent payments to meet their mortgage obligations. In addition, a low supply of rental homes and a high supply of students may prompt landlords to increase rental rates for young adults, Huseman adds.

Currently, the Institute of Justice has filed a lawsuit against the town, as it opposes the new law.

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