

Short-term rentals disrupting SF housing market - silentscope
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/06/10/MNJ11OROGJ.DTL

======
tptacek
Much of the criticism of Airbnb in this article seems to stem from renters
"subletting" their apartments to vacationers. Why does Airbnb allow renters to
list their apartments on Airbnb at all? In virtually no case does a renter
have a lease that permits Airbnb-style listings; the boilerplate lease that
virtually everyone works from requires landlord approval for each subletter.

It seems unconscionable to rent an apartment from a landlord and then use the
space to run a hotel. Anybody who's ever rented more than one apartment knows
that landlords are picky about tenants, often requiring credit checks as well
as references from previous landlords. Renters sign a binding agreement with
their landlord stipulating that they're using the space as their private
residence. Breaking that agreement for profit is unethical.

~~~
vijayr
All of this is true, it _is_ unethical and illegal. But it is also true, that
in cities like San Francisco and NYC (especially SF-Co) rents are absurdly
high, and landlords care nothing other than making the most of it. My previous
two landlords forced me to pay _only_ cash for rent, and I know many other
landlords do the same, and cheat on taxes.

In one place I went, they wanted 450$ for "application fee and credit check",
and it was not even a luxury apartment, wasn't in Manhattan or any high rent
place.

I am not defending any party here - just pointing out, noone in this mess is
totally ethical.

~~~
moreorless
"All of this is true, it is unethical and illegal. But it is also true, that
in cities like San Francisco and NYC (especially SF-Co) rents are absurdly
high, and landlords care nothing other than making the most of it. My previous
two landlords forced me to pay only cash for rent, and I know many other
landlords do the same, and cheat on taxes."

Way to go on painting every single landlord as greedy bastards who care about
nothing other than squeezing every single penny out of the tenant based on
your own personal limited experience. Don't be so quick to generalize that all
landlords are slumlords. For every story of landlord abuse, there is one for
tenants who take advantage of the system as well.

~~~
dllthomas
> For every story of landlord abuse, there is one for tenants who take
> advantage of the system as well.

And there are occasional stories of landlords being awesome, too - ours let us
use her wifi while we waited for our net to be hooked up, for instance.

------
primigenus
Two of my coworkers are in SF right now for WWDC, having flown there from
Europe, and their AirBnB host was just handed an eviction notice for
subletting - they have to leave immediately. So this article feels extremely
... timely.

And I'll be in SF in 2 weeks for Google IO, also staying with an AirBnB host.
Not the kind of article I want to read before flying out there :-)

~~~
rexreed
Having had this happen once, my only advice is to find hosts on AirBnB that
own their properties. I know, not the majority for SF city, but there are
quite a few home owners who are in control of their property and thus not
under a tenant agreement. They might later have to pay the piper with regards
to the city, but that's a much harder bone to pick.

If you want references for property owners in San Fran or near by who have
their properties listed on AirBnB, drop me a line.

~~~
_delirium
I wonder if people who own their own properties could gain a modest advantage
by mentioning that in the AirBnB listing. Possibly not enough AirBnB users
know about or are worried about the distinction, but I'd personally be more
willing to rent from someone if the description assured me that it wasn't an
unauthorized-sublet type situation.

~~~
rexreed
That's a great idea. Perhaps in addition to specifying what type of space is
available for rent (right now the options are whole house / apartment / room,
etc.), hosts should also specify what the property type is:

* Rented apartment subject to tenant agreement * Owned condominium in multi-condo building * Shared townhome * Time-shared Vacation property * Rented detached home * Owned single family property

Something like that. Not sure what the categories would be, but it would be
similar to what you see when you are looking to rent or buy real estate.

Then people can decide whether or not it meets their risk profile.

------
josefresco
For an industry so focused on _disrupting_ ...everything. Things start to get
real hard, boring and _normal_ when met with success and exposure to the
_public_. I admire the optimism that youth brings, allowing someone to look at
a problem with a fresh perspective but all too often, the rules, laws and
regulations in place that make _the old way of doing_ business so boring and
hard are actually in place for a very good reason.

Support line dealing with complaints from neighbors? How messy and resource
intensive.

Meeting with local community leaders and the public to discuss the issues
surrounding their service? That doesn't scale very well and is again ...
messy, boring and hard.

~~~
kanamekun
"Meeting with local community leaders and the public to discuss the issues
surrounding their service? That doesn't scale very well and is again ...
messy, boring and hard."

In other words, a fantastic way to build barriers to entry and really lock up
a new industry.

~~~
vecinu
A lot of folks don't want to acknowledge this fact but many businesses operate
this way.

Most internet startups have low or no barriers to entry, so they can get an
idea off the ground really quickly.

------
mindcrime
_all too often, the rules, laws and regulations in place that make the old way
of doing business so boring and hard are actually in place for a very good
reason._

{{citation needed}}

I can just as easily say that _"the rules, laws and regulations in place that
make the old way of doing business so boring and hard are actually in place
because of corruption, greed, nepotism, and/or incompetence and are
universally immoral, unjust and should be ignored"_.

And on a semi-related note... did anybody else notice how the phrase _"scarce
rental housing"_ kept cropping up in that article? Hmmm... so if there is
actually demand for more long-term rental housing, and that demand is not
being met, I'd bet money that the primary reason is _drumroll please_
government interference. And I'd be strongly tempted to suspect that said
interference has it's root in more corrupted relationships involving the local
government and powerful special interests.

~~~
jseliger
The article has one other howler: "But others, encouraged by lax oversight and
lucrative payoffs, use the rental sites to run ad-hoc hotels, which besides
annoying neighbors, takes long-term rentals off a market that desperately
needs them. . ."

San Francisco has also made it virtually impossible to build new housing units
([http://www.slate.com/articles/business/moneybox/2012/05/face...](http://www.slate.com/articles/business/moneybox/2012/05/facebook_george_lucas_and_nimbyism_the_idiotic_rules_preventing_silicon_valley_from_building_the_houses_and_offices_we_need_to_power_american_innovation_.html)).
If the city needs more housing stock, there's an advanced, information-age
technology called the "elevator" that can allow it to build a very large
number of housing units on a very small amount of land.

~~~
tomkarlo
This... there was also a recent NYT article about how new workers moving to SF
are displacing existing residents by competing for apartment rentals. Having
thousands of new residents moving into a city should be viewed as an
opportunity, not a problem, especially considering the budget issues out here.
SF needs to stop obstructing new construction and allow for more vertical
residential housing like New York and other space-constrained cities. Even if
those apartments mostly go to yuppies, it will take pressure off the overall
housing market.

~~~
_delirium
There's been quite a bit of new housing added in the past decade or two,
hasn't there? A bunch of SoMa has undergone semi-recent conversions from
industrial to residential use, and there've been several large condo buildings
going up (Millennium Tower, Infinity, One Rincon Hill, Paramount), as well as
hotel/condo combinations (Four Seasons, St. Regis Museum Tower).

~~~
jseliger
See the article I linked to above: "Meanwhile, San Francisco—one of the most
expensive cities in the United States—added just 418 new housing units in
2011, the fewest since 1993. What’s more, 149 existing units were removed,
leading to a nearly nonexistent increase in housing supply."

So: No.

~~~
_delirium
That's a 1-year measure, which has a lot of fluctuations; something like a
10-year measure, showing a general trend, is more interesting to me.

Clicking through a few times to
[http://blog.sfgate.com/cityinsider/2012/05/17/after-a-
lull-s...](http://blog.sfgate.com/cityinsider/2012/05/17/after-a-lull-san-
franciscos-set-to-increase-housing-construction/), 2011 is apparently an
anomaly, and around 20-25k new units (net) were added over the past decade. In
addition, 2k new units were approved in 2011. Still not too high, admittedly
(a 7% increase in housing stock over a decade).

~~~
tomkarlo
During that same decade, the population of SF grew by about 60,000. 25K net
new units in a city with 60K net new residents (and one of the lowest
percentages of children in the country) is effectively no growth in housing
stock.

Additionally, a lot of those 25K units are not market-rate housing (they're
for low-income) which means that for market-rate housing, the numbers would
look even worse since most of the new residents are not eligible for low-
income housing.

------
peejaybee
_"We used Airbnb happily in Europe last summer," said Thieme. "I want to
extend them the benefit of the doubt that they are still evolving their
business model and have had explosive growth, but they need to evolve
appropriate mechanisms of monitoring and control. They should deal with zoning
laws and tax laws more aggressively and realistically, or they will antagonize
people."_

tl;dr: "We like Airbnb when others are potentially inconvenienced to our
benefit, but not the other way around."

~~~
tptacek
The overwhelming majority of those inconvenienced by abusive Airbnb listings
have never previously heard of the site. It's unhelpful to single out a single
person who had used Airbnb as a way of warding off criticisms of Airbnb abuse.

~~~
peejaybee
Well, I didn't exactly single the guy out -- he was presented to me by a major
news outlet as poster boy for the problem.

------
merc1985
I also just had an issue with AirBnb. I live in a NYC cooperative apartment.
We do NOT allow short-term rentals (It's actually a NYS law, minimum of 30
days). The person renting out their apartment owns it. I had spoken to AirBnb
about this issue, asking them to remove the listing. They feel that this is an
issue between our building and the owner of the individual apartment. However
I asked AirBnb why they allow apartment rentals in a state where the law does
not allow it. AirBnb stated that the lessor signs an agreement and therefore
the onus is on them. However, I feel the law is implicit and AirBnb is aware
of this law, then entering a contract with prior knowledge of the contract
already being invalid makes AirBnb culpable. You dont enter contracts knowing
the contract is already void. It's amazing that AirBnb's entire business model
pretty much hinges on this contract cop-out. It has yet to be seen if my
building decides to include AirBnb as a defendant in a lawsuit against this
owner as we work to evict them. The main reason why toursts need to stay in
hotels is also as follows: 1) no background check - allows opportunity of
crime. Example: pedophile renting a house or apartment near children. Or
someone wanting to rob a specific apartment or group of apartments. How do you
gain access to the building? $120 bucks, one night. 2) Fire Code: hotels have
sprinklers and proper signage for fire in places where people are not as
familiar with the surroundings. This puts the guests at risk. 3) Fire hazard:
Guests are unfamiliar with the stove, or jet lagged or smoke a cigarette etc.
Risk of fire is greater. 4) Noise: guests decide to have a party or blast
music. Or they are just up late b/c they are on vacation. 5) Vermin: guests
arent going to be as clean. B/c, hey that's what the cleaning deposit is for.
This can attract vermin. Then there's the chance the guests bring bed bugs
with them.

And yes, I agree it does take away units that would otherwise have been used
for long-term renting, robbing the rental market of stock. NYC has about a 1%
vacancy rate as it is.

AirBnb is going to see a huge litigation storm coming its way if it doesnt
take more of a proactive approach where local law does not allow such rentals.

------
nodata
_"The big surprise for us was when we tried to contact Airbnb" to complain,
said Thieme, a writer and editor..._

Not mentioned is if they tried to _talk to their neighbour_.

~~~
tokenadult
_Not mentioned is if they tried to talk to their neighbour._

Was the neighbor who had control of the unit as a tenant on the lease home
when the room was rented out? I don't think so. The article opens with these
paragraphs:

"First came the noisy upstairs neighbors who said they were just "renting the
place for a couple of nights" but refused to tone it down. Then came the
people who would try to open the front door of the Castro/Duboce Triangle
apartment where Barnaby Thieme and Rebecca Reagan live, saying they thought it
led to the lobby.

"The couple looked online and discovered what was behind the disruptions - a
unit in their building was being rented out through Airbnb, the marketplace
for short-term housing in private residences."

I read that as saying that the couple who were disturbed by Airbnb visitors
DID talk to those visitors, only to find out that they weren't actual tenants
of the building. The person putting the unit up for short-term stays on Airbnb
doesn't seem to have been available.

AFTER EDIT: A top-level comment that came in since I posted this makes an
interesting point:

 _I admire the optimism that youth brings, allowing someone to look at a
problem with a fresh perspective but all too often, the rules, laws and
regulations in place that make the old way of doing business so boring and
hard are actually in place for a very good reason._

This is usually how the law (and business custom) develops, by encountering
actual human behavior. As Oliver Wendell Holmes, Jr. wrote, "The life of the
law has not been logic; it has been experience." The Common Law (1881), p. 1.

~~~
nodata
_..DID talk to those visitors.._

They need to talk to the person the visitors are renting from. Is that doesn't
work, they can go one level higher up.

~~~
tptacek
If they're shared tenants in a building owned by a landlord, they need to
report the Airbnb to their landlord, followed by a notice-and-cure letter
demanding that the landlord end the use of the building for Airbnb rentals.
Conversion of an apartment in your building into an ad hoc hotel is a material
change for any number of obvious reasons.

------
redwood
Weird that AirBnB wasn't asked to comment on this piece; or if they were, that
they didn't provide anything significant.

------
ThomPete
I can say as someone who moved to New York two weeks ago and hoped that AirBnB
would allow me to find a good temp place that i feel pretty critical towards
the experience.

The prices are insane. I paid 3300USD for a shitty studio in China Town for a
month.

I am ok with paying a lot of money for a place and I know NY well enough to
know it's expensive.

But people who get only profit from subletting and pumping up the prices by a
factor 2x-3x should not be allowed onto the platform.

Of course Airbnb don't really care because they get a percentage of the
transaction.

So great idea but pretty shitty service at least in NY.

~~~
rexreed
Out of curiosity, would it not have been cheaper to stay in New Jersey and
take the NJ Transit or Path? If you could, then your options for low-cost
AirBnB or short-term sublet are much expanded.

I know, it's not the same as living in the city, and perhaps you wanted that
experience as well. But not sure if the Chinatown Studio gave you the
experience you were looking for.

~~~
ThomPete
I am here on an O Visa so I am here to work. I wanted to stay close to the
office in the beginning until I found a proper place.

Hopefully I found that yesterday :)

Will have to get approved (again an issue when you don't have credit history
as the US works opposite of Denmark in that regard)

------
Adirael
This kind of lettings are a PITA for the neighbours, with or without AirBnB. I
used to live in a city with high level of tourism and the apartment next door
was rented in a short term fashion. Sometimes the people was nice, others they
were noisy, there's nothing AirBnB or the owner can really do apart from
removing the people form the property if they are breaking the law or
community rules.

Taxes and laws are a totally different beast here.

~~~
tomjen3
My neighbors are pretty noise and the appartment is leased on a normal
contract.

------
jusben1369
Weird no one mentions insurance. That's the biggest issue of all I would
think. Landlords have insurance for legitimate tenants.

~~~
slug
They do? The last time I read a lease mentioning an insurance was only to pay
a hotel in case of fire/flooding, anything else you are on your own.

~~~
tomkarlo
It wouldn't be in the lease, it's not for the tenant. Landlords will carry
liability insurance for their units in case a tenant or their guest is
injured, etc and decides to sue the landlord. Those liability policies often
have limitations on who they'll cover, how the unit can be used, etc.

I'm guessing the insurance companies find a way to avoid covering you if you
let a tenant sublet their apartment hotel-style... if for no other reason than
I'd bet policies for hotels are more expensive than residences. (And hotels
have to have better fire protection, etc.)

~~~
jusben1369
Right. I should have been clearer. Airbnb person staying in building sets
building on fire. Insurance companies always look for anyway not to pay.
Search web, find evidence that apartment was active on AirBnB and deny claim
as it's a breach. Now everyone else in the building has to go after the
Landlord directly.

Bottom line would appear to be that leases will soon specifically speak to
this new business model and it probably won't be what most people would like
to see.

