Yes, absolutely, and it happens regularly. Cities and towns have broad authority to regulate how owners rent out property, and plenty have used it to curb or effectively end short-term rentals. We've lived this directly. One of our investment properties in Rancho Mirage, near Palm Springs, was hit when the area passed an ordinance requiring rentals of 28 days or longer, which effectively ended nightly and weekly short-term renting there. The effect was visible: fewer people moving through that development and the neighboring ones, and a real hit to the economics, because the weekly and nightly rates had run well above what the same unit fetches as a standard monthly rental. Longer-stay demand from 30-plus-day snowbird traffic still exists, but the high-margin short-term income was gone. So if short-term rental income is part of your underwriting, treat local regulation as a first-order risk. Rules vary widely from one jurisdiction to the next and can change after you buy, and some cities grandfather existing permits while phasing them out over time. Before you close, confirm the specific city's current short-term-rental ordinance and any pending changes, and make sure the property still works for you as a long-term rental in case the short-term option goes away.