Federal Lawsuit Alleges Biloxi Conspired with Hotel Association to Restrict Short-Term Rentals

Lawsuit Filed Against City of Biloxi

A federal lawsuit has been filed against the City of Biloxi, Mississippi, by home-sharing platform Airbnb Inc. and local homeowner Patrice Perillo. The complaint, lodged on Tuesday, November 12, 2025, in the U.S. District Court for the Southern District of Mississippi, accuses the city of engaging in an illegal conspiracy with the Mississippi Hotel & Lodging Association (HLA) to restrict short-term rentals (STRs) and artificially boost hotel profits.

The lawsuit claims that Biloxi's ordinances severely limit the operation of STRs, effectively excluding them from significant portions of the city and constraining them in others. This action, according to the plaintiffs, is designed to benefit incumbent hotels by stifling competition from short-term rental properties.

Allegations of Anti-Competitive Practices

Central to the lawsuit are allegations that the City of Biloxi and the HLA colluded to create an anti-competitive environment. The complaint highlights a 'highly unusual' requirement in Biloxi's regulations that mandates the city notify the Hotel & Lodging Association about every short-term rental application approval. This provision, the plaintiffs argue, grants the HLA 'unprecedented visibility' into potential competition faced by its members, a right reportedly not afforded to hotel industry trade associations in other U.S. municipalities.

The lawsuit also points to Ward Six Councilman Kenny Glavan, who serves as the current president of the Mississippi Hotel & Lodging Association. The plaintiffs accuse Glavan of having a conflict of interest due to his dual roles, an accusation Glavan has reportedly denied, calling it 'troubling' and 'flat-out' false.

Biloxi's Short-Term Rental Regulations and Defense

Biloxi's ordinances impose various restrictions on short-term rentals. STRs are not permitted in single-family zones, including RS-5, RS-7.5, RS-10, RE, RER, A, and AR districts. They are authorized as conditional uses in specific zoning districts such as A-Agricultural, LB-Limited Business, NB-Neighborhood Business, RM-20 medium-density multi-family residential, and RM-30 high-density multi-family residential zones, subject to review and approval. The cumulative total of conditional-use STR permits in these zones is capped, with some ordinances citing a limit of 75 and others 125.

In response to the lawsuit, the City of Biloxi has defended its short-term rental ordinance. The city stated that the plaintiff in the case is seeking to establish a short-term rental in a residential neighborhood, and suggested that Airbnb is attempting to operate with 'no rules' for such areas.

Broader Implications for Property Rights

Airbnb has issued a statement asserting that Biloxi's regulations are 'setting a dangerous precedent for property rights across the country while protecting incumbents from competition.' The company's legal action could serve as a test case as it seeks to challenge government restrictions on home-sharing more broadly.