Airbnb’s meteoric growth has shaken the hospitality industry, and is making homeowners mighty nervous about who their next-door neighbors might suddenly be. There have been regulatory fights to leash the short term rental site from New York to Barcelona.But the insane growth just keeps on.
In the summer of 2010, three years after the company started in San Francisco, about 47,000 people stayed with an Airbnb host. Last summer, almost 17 million people stayed at an Airbnb. It’s the biggest competitor to Austin-based VRBO HomeAway, though the HomeAway folks look down their noses at Airbnb somewhat.
The mainstream tourist industry reminds me of the established taxi companies who fought Uber and Lyft: they are stuck with an uneven playing field having to charge hotel taxes and buckle under regulation, unlike their Airbnb buds. This often makes Airbnb a more economical option for travelers.
But what if your temporary landlord ends up being Norman Bates?
Well, that playing field is leveling somewhat: in February of 2016, Chicago adopted a 4.5 percent hotel tax , now included in the price of a Chicago Airbnb listing.
The tax changed the rentals not one iota: Chicago continues to have a high Airbnb occupancy rate compared to other cities. And Chicago has great hotels.
Even Airbnb’s hometown San Francisco, in 2014, made short-term rentals legal, but slapped on restrictions such as limiting spaces to be rented up to 90 days per year, if the owner is not present.
In 2015, another amendment was proposed to further reduce the 90 days to 75 days, but the amendment was not passed. But in June of this year, a new law was endorsed that put the burden on Airbnb to verify if hosts are registered with the city, which is a requirement for short-term rentals.
And now comes Arizona …
Arizona just passed a bill that outlaws cities and municipalities from prohibiting short-term rentals. It is an effort to relieve people’s fears that they won’t be penalized if they turn their home into a piggy bank for a few nights, while encouraging them to follow local regulation and yes, cough up some tax the municipalities might otherwise lose.
Have no doubt the hotel industry is not happy.
I had an interesting conversation with the folks on Swiss Avenue a few months ago. These are the folks who are angry over the weddings taking place at our Aldredge House (full disclosure: I am a member of the Dallas County Medical Alliance which owns Aldredge House and is fighting to keep it. So yeah, maybe a little bias). They were telling me that Airbnb “would never be permitted on Swiss Avenue.” In fact, the neighbors there have shut down many a home-run business in the interest of preserving tranquility.
But then other sources have told me that City Councilman Philip Kingston is bullish on Airbnb. The Kingstons (both Phillip and Melissa) are big advocates for using back houses as rentals to create more affordable housing options in high-rent areas. They both are focusing on revising City code to allow for full-size kitchens in accessory dwelling units, which would then be eligible for short term rental.
Perhaps the Kingstons see the potential for the tourism industry and the City to profit off it. Cities generally have regulations about licensing and paying taxes, but of course, those rules are often not enforced, unless by neighbors who snitch.
If short-term rentals were to become illegal in the U.S., the effect would go beyond inhibiting travelers and hosts — it would also affect many businesses. Pricing companies and consulting websites are based on the existence of short-term rentals. Airbnb is an excellent way to help pay for a vacation home or pied-a-terre. Even the European Union (EU) has expressed its support for technology services such as Airbnb and Uber, offering non-legally binding guidelines and restrictions commensurate with public interest such as safety or social policy.
As long as they get their piece of the pie… what do you think of Airbnb and efforts to curb its growth? Should texas follow in Arizona’s footsteps and should Realtors lead the way?
