I tend to disagree. Boston is one of the most expensive cities in the US to live in right now — we have a low housing inventory at the moment, and it's incredibly frustrating to see someone buy a property with cash, develop it, and then essentially use it as an unsanctioned hotel. There are AirBNB slumlords out there.
AirBNB seems intended to give homeowners flexibility to rent out some space, but when that model starts shifting to developers creating what are essentially unregulated and unzoned hotels it creates a situation that sucks for potential homeowners and neighborhoods alike. You can suddenly have a neighbor or a apartment in the same building become a revolving door for strangers who don't care about the community, who are giving money to landlords who simply aren't present.
I think in this case some light regulation can make a big difference and give more power back to smaller home/property owners.
The impact on housing prices is trivial compared to the ridiculous under-supply of hotels in most major cities.
To the point where it has priced-out the ability of anyone under the upper-middle class from visiting most major cities as tourists. How is a middle class family supposed to pay $400/night to rent a room in NY?
Being able to travel shouldn't be artificially priced at a point where hotels are a crushing expense; visiting NYC isn't just for the 1%. You're just playing along with the hotel cartel here.
I really don't think hotels are the ones truly at fault here. The way Airbnb competes on price is mostly due to not having to pay for things that hotels have to. The cities & states themselves are the ones who decide what sort of insurance hotels have to have, what sort of zoning rules apply, taxes to levy, rules that they have to follow.
Taxes are very high on hotel stays, generally. And this is usually because it's easier for someone to raise "other people's" taxes rather than their own (e.g. tax the out-of-towners).
People seem to claim things like how "hotels legislate a moat" all the time, but ultimately I really don't think it's the hotels, it's the town/city/state and the citizens thereof that have decided what they want to legislate. And that's inconvenient for a startup looking to "disrupt" things, but I find it quite scummy.
Maybe at some % of occupancy an AirBnB stops being spare space and becomes more hotel-like and needs to start collecting the same types of taxes, providing insurance, etc.
I'd be curious to see what % of Airbnb rentals are 100% occupied by the guests. I suspect that it's a majority of them, but I don't have any data to back that up with.
There are lots of $400/night hotel rooms in NYC, but there are a fair number of $150/night rooms as well. Maybe that's not their published rate, but you can find them on Kayak or similar. Admittedly, $150/night isn't cheap, but it is NYC and you're going to have a better time than you will in certain remote locales where the only hotel suitable for occupancy is $100/night. (In such locations, find a campground, especially for a family trip.)
I visited Boston in April for a conference in Copley Square. I looked into AirBnB and was surprised to see that the prices were virtually the same as the hotel. I decided to stay in the hotel since it would be more convenient for the conference, plus it had a gym and a beautiful view.
AirBnB is great when you can co-locate a household and a rental room. A permanent resident that rents their spare spacetime is an increase in efficiency.
The problem is when landlords terminate leases to convert to full-time AirBnB properties. That isn't efficient, it's adding another hotel to the 'cartel'.
> How is a middle class family supposed to pay $400/night to rent a room in NY?
If you can afford to take your family to any of the major attractions people want to go to NY for, the additional cost of a NY hotel may be noticeable, but its not going to radically change the affordability of the trip.
That is the underlying problem though--you can't even build old school (but up to date code- and safety-wise) triple deckers anymore in large sections of the city and the surrounding towns, even though they are often the best compromise between retaining town character and providing a good supply of housing.
If zoning repeal is impossible due to entrenched landowner interests, why would cracking down on AirBnB succeed in the face of entrenched landowner interests?
Most landowners don't rent their apartments out on AirBnB. In fact, most of them probably don't want their neighbors to be making money running an AirBnB.
In the long term, if you want lower prices, you must increase supply. To increase supply, allow profits to increase. Increased profits provides increased motivation to increase supply.
Cities where people line up to make offers on houses sounds a lot like Venezuela where people are lining up for the grocery stores. The lines in Venezuela are due to price controls which reduce profits thus reducing supply.
It's not the same thing: people line up at grocery stores because they _need_ food to survive.
If you restricted Airbnb, you'd be dampening the supply of hotels and the demand for real estate. When the demand for real estate goes down, its price will go down.
The price of hotels would be expected to go up, but I think we can live with that, as its a far more elastic good than housing.
It is hard for me to imagine any notable impact on property prices even by eliminating every AirBnB rental tonight.
I'd love to see people making this claim cite some numbers. Just how many residences are being "diverted" from your preferred use, and where did you get that number? Citing handwavey econ 101 principles is no more convincing when done here than it is, say, in the minimum wage debate.
"You can suddenly have a neighbor or a apartment in the same building become a revolving door for strangers who don't care about the community, who are giving money to landlords who simply aren't present."
i currently live in an apartment with two full time airbnb units (out of 6); the two units are over-occupied (each advertising 16 guests in what should be a 2 or 3 person apartment). the airbnb host has an agreement with the landlord, where they pay the landlord an extra 30%/40% a month per unit and get to run their airbnb. none of the neighbors particularly like the airbnb units or the guests and our building is now known as the "airbnb building" on our block.
i've talked to the landlord (who is mostly absentee), the host (who runs 5 airbnbs) and to airbnb (through their official channels) and no one will budge (on lowering the number of guests) or concede that living next to a full time airbnb with 16 guests is terrible.
in the future, i will not live / rent a property that is being managed solely as an investment / way to earn money for the landlord and will pay special attention to any airbnbs nearby before moving in. aside from the noise and usual complaints you'd expect from having an airbnb as a neighbor, one particular side effect is that it reduces the neighborhood social-ness (compared to the previous places i've lived). our living space is actually more closed off because there is a steady stream of large groups of strangers in our building.
You may have other recourse. Many local governments restrict the number of unrelated occupants in a housing unit based on size, number of bedrooms, etc. to prevent exactly this. It's a big fire safety concern in addition to being a burden on neighbors. In any case, review your local regs.
If there's a demand for housing with a specific use in mind, the solution is to add to the total supply of housing, rather than try and regulate everything.
Regulate for safety, and genuine nuisance (rather than OMG I saw a person I don't know!), by all means. Add taxes if needs be, but add more housing if there's a market for it!
Boston is building like crazy. So the inventory problem is getting solved, to some extent. Part of the challenge is that almost all of the new inventory is at the upper end of the market: studio apartments at $3000, and going up from there.
I think we agree. I said I was in favor of light regulation, I just don't want to step on an individual wanting to rent out their home. It's hard to draw bright lines from a legal perspective on what's OK and what isn't, and we need to think about that for sure. For instance, let's say I get an out of town job offer. I think it'd be fine for me to rent my place out on AirBNB by the week, especially since I live close to the beach. I'd have management headaches from weekly turnover versus just getting a long term tenant, but that's on me. But where's the line? If I bought the houses next door and did the same, that's probably less OK. But the key is light regulation, not protection of the lodging industry for its own sake.
If your goal is to keep housing affordable, you need more housing. Going after AirBNB (barring those running large hotel-like operations) isn't addressing the supply issue.
> Going after AirBNB (barring those running large hotel-like operations) isn't addressing the supply issue.
What is the definition of a large hotel-like operation exactly? I have a friend who lives at his parents house, rents 2 apartments and then re-rents them out exclusively on Airbnb. He lives off the difference between the rent he pays and what he earns from re-renting on Airbnb, basically arbitraging the difference between the long-term rental and short-term rental markets in his city. His small hustle is no Hilton, but it affects the property market in a small way by taking two properties off the market.
Airbnb takes a lot of the pain out of running things like this, and enables a lot more people to do it on a small-time scale. Taken together, it will affect the market as much, or more than a few large operations.
Left unchecked, I think such practices will, in the long term, push housing (both rental and purchase) prices up while pushing traditional hotel rental prices down, so I think the interests of home renters/buyers are actually aligned with those of the lodging industry.
Increasing housing supply is one tool we can use to control housing prices. Zoning laws, when enforced properly, are another tool. This investigation seeks to address that second tool.
> What is the definition of a large hotel-like operation exactly?
No idea, but I'm thinking more of an absentee operator model with lots of rooms and properties. What your friend is doing is probably too small to impact the rental market, but in aggregate could be an issue if many were doing it. It's easy for me to say that I don't mind that sort of thing since I own a home and people like your friend would give me additional choices when I go on vacation, but the immediate community may think differently and I think that's where it needs to be decided. It's why I'm really questioning Federal regulation and involvement of a local issue.
Taking it to an extreme, look at a place like San Francisco. Someone there doing what your friend does would be impactful, yet the city itself won't permit enough new construction to solve the supply issue. Regulating AirBNB doesn't solve much there, and the city itself won't allow a solution to the supply issue. By regulating AirBNB, the city itself is actually taking additional adverse action on the supply issue rather than doing anything to mitigate - but that's their choice, their voters, their city. It's not my place to sit here in Maine and tell you that's wrong, but that is essentially what a Federal regulator does by proxy.
> If a community wants to ban Airbnb rentals and rewrites their zoning laws as such, the resulting line is clear.
Somewhere there's a line regarding property rights and externalities, but I think we've gone way too far away from laissez faire in the US. Our towns are brittle and inflexible and the poorer because of it.
Is it, though? Do you just blanket ban AirBNB rentals in the area? Define that. Do you really mean short term rentals? Web-listed short term rentals? What's short term?
Then, consider who you're impacting - this is local so they're your constituents, after all.
Enforcement is a whole other matter.
Try this: Define your objective, then draft the statute.
EDIT: I'll add, I own exactly one home and have never rented it out by any means. I don't have a stake in this fight, but I am interested in the legal aspects.
The goal would be to catch people who buy a house, don't live in it, and continuously rent it on Airbnb. i.e., they are operating an unlicensed rental property, which is already often illegal.
Is it hard to stop people from occasionally renting their house on Airbnb? Sure, and you'd have a hard time writing that into law because it would be difficult to differentiate between someone who Airbnb's their house one week a year and someone who lets a friend stay at their place.
But it would be pretty easy to prove in court that the guy who owns the house next door doesn't actually live in it (this is probably key to enforcement), and has listed it on Airbnb a hundred times this year.
Maybe a lawyer or judge can chime in, but it seems like this would be provable in court.
I'm a lawyer. This isn't what I do (I work in tech), but it's very interesting to me from a regulatory perspective.
Renting a house that you don't and never live in isn't illegal, and I think it would be very hard/impossible to do that. You'd be butting up against some very fundamental property rights. If a jurisdiction requires a license, that's fine to require, but you probably couldn't deny one on the basis of AirBNB.
Listing it on AirBNB in and of itself really can't be prohibited. I think you'd have a First Amendment issue. It'd be commercial speech, which has a little less protection, but I can't imagine that going smoothly if you tried to clamp down on how a homeowner (or landlord) advertises his or her property.
This is the reason that the attempts you see now to regulate are based on short term duration. So far, regulating the duration of a stay and saying less than that is a hotel seems to be okay.
Enforcing it would be brutal. To start, who enforces it? And since it's local, what amount of your limited resources should you devote?
My parents built a shed in their backyard, and a zoning law required that it "look like" their house.
If that's enforceable, how could a prohibition on short-term rentals not be? What am I missing here?
I think residential zoning regulations violate liberty more often than not - but it's obvious that there's precedent for all manner of loosely defined and overreaching - yet, enforceable - laws in this arena.
A prohibition on short term rentals is permissible. I even said that specifically. It's the other restrictions, like listing on AirBNB, that I said you probably could not do.
Short answer - probably. Slightly longer answer - I'm actually not sure. It'd have to be set really high, and even then, collection might be an issue.
Let's deal with the amount of the fine first. It'd need to be huge, enough to erase the economic benefit of the rental activity, and then some to deter the attempt because the odds are you still won't get caught. Let's say you do something ridiculous like $50k per occurrence, just to keep this moving.
Anyone serious about doing this is going to restructure such that the fine becomes difficult to collect. Make the city spend $100k to get $50k from you. Individual property owner X creates Property Management Company Y. X leases property to Y. Y does all of the business on AirBNB. Y gets fined, goes to court, judgment sticks, so Y declares BK and dissolves. X leases to company Z, rinse and repeat. Literally a shell game until the city gives up or something bigger comes down, who knows, but point is you can frustrate enforcement efforts in protest if you're so motivated.
Then there's the question of the fine. I really don't know if there's a constitutional argument on an excessive fine or not in this case, but I think the Supreme Court left the door open on that. Kelco might be the case.
Please keep in mind, I'm just being an armchair analyst here. I'd be pissed off if my neighbor's house suddenly became a revolving door of loud campers. I'm just not realistically sure what could legally be done about it beyond restricting short term rentals. But then I'd just have weekly campers instead of daily.
I tend to agree. We stayed at an Airbnb only to have PSGE show up the second day to turn off the power since the owner hadn't paid the power bill in 3 months.
It took 4 different calls/people to find out who the actual owner of the property was. I'm all for someone letting out their room/house but this put us in quite a scramble.
AirBNB seems intended to give homeowners flexibility to rent out some space, but when that model starts shifting to developers creating what are essentially unregulated and unzoned hotels it creates a situation that sucks for potential homeowners and neighborhoods alike. You can suddenly have a neighbor or a apartment in the same building become a revolving door for strangers who don't care about the community, who are giving money to landlords who simply aren't present.
I think in this case some light regulation can make a big difference and give more power back to smaller home/property owners.