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Policy Research & Legal Resources
Tourism's coastal crunch: Vacation rentals and crowds create livability issues
Residents torn between the dollars short-term rentals bring in and the quality of life and housing stock they take with them
by Emily Green | 15 Jun 2018
Residents torn between the dollars short-term rentals bring in and the quality of life and housing stock they take with them
by Emily Green | 15 Jun 2018
The Deep End Café in Newport was packed full of customers two summers ago when its owner, Charlotte Boxer, got a call from her neighbor. The neighbor wanted to let Boxer know that a stranger had climbed onto the roof of her house.
She left the busy restaurant to make the short drive to her home, near the entrance to Yaquina Bay State Park. She soon discovered a man was still high up on her roof, while a woman in a long skirt was attempting to scale her stone chimney.
As it turns out, the man and woman were the temporary occupants of two different vacation rentals near her house. They had ignored her “no trespassing” signs in order to retrieve a kite.
This is just one of many incidents, Boxer said, that has eroded the quality of her home life since her coastal neighborhood – and her property – have become overrun with vacation-rental inhabitants.
But vacation rentals, she said, are causing more harm than good due to their increasing numbers. She is constantly losing employees because they cannot find anywhere to live. One of her cooks is living in a small pull-trailer in an RV park because she cannot find housing.
“They block the driveway, they block the street, they have parties until late in the night,” she said. “It is hell living next to them.”
She has since installed a “Fort Knox”-style fence around her property, she said.
It wasn’t always like this. Boxer, who splits her time between Newport and Portland, said that when she purchased her oceanfront second home 13 years ago, there were no short-term rentals in its immediate vicinity. Today, three of the four houses adjacent to her property serve as revolving doors for tourists.
And it’s not as if Boxer is adverse to tourism – her livelihood depends on it. At 67, she has much of her life savings invested in her seafood restaurant that relies, in part, on traveling diners.
Many coastal residents live in old RVs, but most RV parks only allow new trailers. Idaho Point in Newport is known as an affordable place to park older RVs. It's currently home to several run-down campers sitting adjacent to a picturesque bay. The park was recently acquired by a new owner.
Photo by Emily Green
The continuous employee turnover and stress of running a restaurant that’s always short-staffed have Boxer wondering whether she wants to continue doing business at the beach.
She is not alone in her frustrations. Communities up and down the coast have been grappling with how to regulate vacation rentals and mitigate the effects of ever-increasing number of visitors. It’s a double-edged sword: While Oregon’s coastal economy relies largely on tourism dollars, the spread of short-term rentals has created livability issues for many residents and made it nearly impossible for locals – many of whom work in the establishments tourists patronize – to find housing.
The Surge
Oregon’s coastal towns have long played host to swaths of vacation rentals and second homes, but over the past decade, short-term rentals have begun overtaking most new construction and affordable homes that year-round residents once occupied.
This trend is particularly problematic in Lincoln and Tillamook counties, where even though an above average amount of housing has been built in recent decades, after factoring in new developments targeted specifically as vacation homes and an overall increase in vacation homes in general, the stock of housing for local residents has not kept pace with demand, according to a March 2018 report from the Oregon Office of Economic Analysis.
Newport City Planner Derrick Tokos said the rise in short-term rental numbers has correlated with the advent of Airbnb. More people are considering vacation rentals as an income opportunity because with companies like Vacasa taking care of management and Airbnb taking care of advertising, it’s easy to turn a profit on your second home when no one is there.
An independent analysis Tillamook County commissioned painted a bleak picture. It found seasonal units jumped from 4,600 to 7,223 between 2000 and 2014, while the number of non-seasonal homes decreased by 110.
“The number of houses that are selling for cash in this county is just insane,” said Erin Skaar, the director of Tillmook’s primary social service provider, Community Action Resource Enterprises, Inc. She said according to the consultants who conducted the analysis, cash sales are taking place at “a far higher rate than you see across the nation, and it’s because its investors that are coming in and buying houses.”
The housing report showed homes priced at $200,000 or more along Tillamook County’s coastline were making up the bulk of those cash sales. Up and down the coast showed consensus among residents that following the recession, vacation rentals seemed to start taking over.
“Something that happened when that bubble popped,” said Elizabeth Reyes, executive director at Family Promise of Lincoln County, “is now there are foreclosures everywhere.
“I can’t tell you how many working class people lost their homes. And because of that, people who are already in a position of having collateral or wealth, can snap ’em all up, so you went from people having one or two, to three, four or five.”
Some coastal residents aired suspicions that it’s Californians and New Yorkers with deep pockets buying much of the land, but the truth lies closer to home.
Street Roots obtained the permanent addresses of those who’ve bought property in Lincoln and Tillamook counties since the recession.
Of the 3,677 single-family residences purchased in Tillamook County since 2008, just 13 percent have owners confirmed to live out-of-state, and more of those live in Washington than in New York or California. Portlanders own about 600 of the properties. About 27 percent of homes purchased were listed as the owner’s permanent address.
In both counties, close to half the purchasers were listed as county residents, which means locals are cashing in on vacation rentals, too.*
A similar look at the 1,000 properties purchased in Lincoln City and Newport since the recession revealed that 25 percent of properties purchased were listed as the owner’s permanent address. Tillamook County Commissioner Bill Baertlein said 100 new short-term rental permits were issued for the unincorporated areas of his county last year alone. “So we are up close to 900,” he said, “and that’s just in the rural county, and it’s growing.”
The data also revealed very few people had purchased more than one property in either county over the past 10 years, and those who had, only purchased two or three.
“We have very few situations where there is a single entity owning multiple properties,” said Tokos in reference to Newport’s housing market. He said out-of-town purchases are typically people who want a second home on the beach or who bought a second home for use later in anticipation of retirement. The difference is that now, they can easily turn that home into a profit generator.
Reyes, 37, remembers Lincoln City as a quieter place growing up. “During the winter, it was like ‘our town,’” she said. “There was very little tourism, it was just like a sleepy little coastal town.”
Now that tourism has increased, it can help businesses survive the winter months, she said, but summertime has become chaotic, with heavy traffic and swarms of beach-goers.
“At the beach, you can literally see piles of garbage,” she said. “There is a push to make sure we get the right type of tourism. We don’t want to be a Jersey Shore where people come, party hard, and leave everything behind.”
Reyes is working with the local government and other area residents on a project called “Imagine Lincoln City.” She said one objective it has honed-in on is to attract more eco-based tourism by promoting activities such as kayaking, bird-watching photography tours and paddle-boarding.
“When you have that mindset, you are less likely to leave your bag of McDonalds behind on the beach,” she said. “We don’t want people coming with 20 cars and partying all night long with garbage all over the place and no accountability.”
Lincoln City recently joined other coastal cities, such as Manzanita, Seaside and Gearhart
in limiting the number of vacation rentals allowed in residential neighborhoods.
Astoria only allows vacation rentals in commercial zones.
“Until three years ago, there were more cows than people in Tillamook County,” said Gary Albright, director of the Tillamook Pioneer Museum. But all that’s changed, he said, now that Tillamook has been discovered.
“Everybody owns the beach. It’s not just the locals,” said Commissioner Baertlein. “It’s nice to have them here.” But, he said, visitors need to “have a little patience with us and understand that when you have a police department that’s set up for 25,000-person county and you have 75,000 people here on a weekend visiting, they can get overwhelmed.”
Baertlein said police get bogged down with calls for both emergencies and petty annoyances, such as tourists parking in people’s driveways, blocking them in or out. “If they could just pretend like they are at home,” he said, “if they wouldn’t do it at home, then don’t do it here.”
Serving tourists while living homeless
While checking out of the Wacoma Inn in Lincoln City, Street Roots asked the woman at the front desk, Nemoria Viallagomez, what she thought about the coast’s housing situation. “I had to live in a tent,” she responded.
She said she moved to the area from Salt Lake City about four years ago to live with an aunt who had a job lined up. But the job fell through, and her aunt never arrived. Viallagomez quickly found consistent work at area hotels, but couldn’t find anywhere to live.
She and her 3-year-old son survived in a tent for months, escaping the elements at an area warming shelter that temporarily opened during extreme temperatures. She saved up and bought an RV for $1,000, but soon discovered that most RV parks will only allow newer vehicles. She eventually found a parking spot at Agate Beach RV Park, where she stayed for a couple of years. After a three-year wait on a Section 8 list, she’s finally in an apartment with her son, who is now 6.
“If I won the lottery, I would build a shelter here because that’s what the county needs – a decent shelter,” Viallagomez said.
Stories such as hers are common along the coast – just ask your server, bartender or hotel housekeeper about housing next time you visit.
Behind Newport's Aquarium Village
Newport's Aquarium Village, a destination for tourists, are rows of storage units that have become living quarters for residents with nowhere else to rent.
Thee are squatters inhabiting falling-down and mold-ridden dilapidated buildings along Highway 101 or of families making campgrounds in the dunes their full-time home, even with two working parents.
It’s not just service-industry and other low-wage workers affected by the housing shortage.
Many white-collar professionals are jumping ship because they don’t want to be a doctor or teacher by day and a trailer park or campsite dweller by night.
Lincoln County lost two mental health supervisors in a row – who were hired at about $80,000 a year plus benefits because the new recruits could not find housing in Newport.
Lincoln County Commissioner Claire Hall
Jennifer Thiele at the Tillamook Pioneer Museum where she works. Thiele was unable to find housing in Tillamook until she got on a waitlist for an apartment that had not yet been built. Now she spends 80 percent of her income on rent.
“One gentleman had that position for nine months and resigned,” said Lincoln County Commissioner Claire Hall. “Loved the community, loved his colleagues, loved the work, but after months of living in campgrounds, because he couldn’t find a place that he considered decent on his income, he left. … I hear that from so many business owners, managers, public sector, private sector. I was hearing it when I first ran for office in 2004, and it’s only intensified. It is probably the No. 1 barrier to workforce recruitment and retention,” she said.
Jennifer Thiele, 26, was living in Minnesota with her parents when the Tillamook Pioneer Museum in Garibaldi offered her a job as its new cultural acquisitions educator. She had recently graduated from the University of Oregon with a degree in American history, and it was just the sort of job she was hoping to get.
For months, she called apartment complexes and scoured online ads, looking for somewhere to live. Homes for sale were too expensive and apartment complexes all had wait lists of 30 people or more, she said.
When she suggested buying an RV, her parents were hesitant and thought perhaps a motel would work.
In disbelief it could be that hard to find housing, Thiele's father traveled from Minnesota to Tillamook County to help his daughter look. As he was driving along Highway 101 in the midst of his search, he saw an active construction site on the side of the road in Garibaldi. He pulled over and asked to talk to the foreman. He got his daughter on a nearly-full list for the apartments that hadn’t been built yet.
Today Thiele has an apartment in that building, but it’s costing her 80 percent of her income to rent. “I budget meticulously,” she said. “Everything is down to the pennies.”
Other community members said she’s known to wrap up food that’s leftover at museum events and take it home. Albright, Theile’s employer, said Tillamook seems to be headed in the direction of more touristy coastal cities, such as Seaside, where vacation rentals have long been an issue.
“A lot of people don’t like that,” he said, “there is a great resentment of that. But the bottom line is that people coming for short term stays now are taking housing that Jennifer could have had five years ago.”
Enough is enough
With increased tourism driving Tillamook County’s housing shortage, Commissioner Baertlein thinks using money collected from transient lodging taxes for affordable housing might make sense. After all, tourists like to eat at the restaurants and shop in the stores where locals work, but those locals need a place to live in order to serve tourists.
He’s working on a bill for the 2019 session that he said would more “equitably split up the monies” from the tax. If passed, it could potentially serve as a funding stream to build affordable housing in cities struggling with the effects of vacation rentals across the state. The bill’s details are still being worked out.
But for the full potential of the lodging tax to be realized, governments need to ensure short-term rental owners are paying the tax to begin with. That’s why Tillamook County is buying a software program and service that will pinpoint unlicensed Airbnbs that aren’t paying it.
“They did a preliminary search in Tillamook, and there were over 200,” said Baertlein. He estimates that in the unincorporated areas of the county alone, $600,000 to $700,000 in taxes and permit fees is going uncollected. Plus, unlicensed rentals aren’t getting inspected for safety.
“We’re going to be the guinea pig,” he said, adding that if the software works, cities in Tillamook County will likely follow suit and do their own audits.
In January 2018, the city of Newport formed an ad-hoc committee to figure out what regulations on vacation rentals should look like – a move that many residents see as long overdue. According to Newport’s city planner, Tokos, there are 195 licensed vacation rentals in Newport. Like Tillamook, Newport also had an independent company search for unlicensed short-term rentals. It showed about 80 to 85 percent were compliant, he said.
Newport’s vacation rental committee is considering placing a cap on the total number of vacation rentals, limiting where they can be located and their density.
The next step is public input, and then city council and planners will vote on the final recommendations in the fall.
Some coastal communities with regulations in place, such as Gearhart and Lincoln City, initially battled legal challenges to limits and rules they applied to short-term rentals, and ultimately prevailed. But the effectiveness of these regulations relies heavily on compliance.
In Astoria, short-term rentals are only allowed in residential areas if the owner occupies the unit while guests are there.
But illegal rentals persist on sites such as Airbnb. As recently as December, Astoria City Council considered adding a permit requirement to all Airbnb’s in an attempt to figure out where they are for better tracking and enforcement.
While it hashes out its own vacation rental regulations, Newport may build its way into a slightly better housing situation over the next two years with the multiple apartment complex projects it has in the pipeline. Three projects will add about 200 new apartments, with the majority available to people making 60 to 80 percent of the median area income, according to local government officials.
And the developments couldn’t come at a better time. With a new Samaritan hospital and a $58 million expansion of Oregon State University’s Hatfield Marine Science Center under construction, locals have wondered where workers filling all the new jobs at these facilities will live.
But for Boxer, those units may not come soon enough. After a long career working as an affordable housing financier for U.S. Bank and other financial institutions, she said she doesn’t have the energy at her age to keep vetting, hiring and retraining employees at her café. In the meantime, she sits on the city’s ad-hoc vacation rental committee, and has been a vocal participant at its meetings.
“I want to give the people who live and work here, the opportunity to live and work here,” she said. “I have just hired my 93rd employee in 4 years and 3 months, and I am absolutely sick to death of the turnover. I just don’t want to do it anymore.”
*When Street Roots analyzed homes purchased in Tillamook County, Lincoln City and Newport between 2008 and 2018, we found that 8 percent of the purchasers’ permanent addresses in Lincoln City and Newport, and 15 percent in Tillamook County, were listed as a local P.O. box. We did not count these purchasers as living at the property they purchased, but we did count them as local purchasers. It’s possible some buyers with a local P.O. box may not actually be local. It’s also possible that they are residing in the home they purchased, but do not take their mail there. In Newport and Lincoln City, 142 of the properties purchased were vacant lots. https://www.streetroots.org/news/2018/06/15/tourisms-coastal-crunch-vacation-rentals-and-crowds-create-livability-issues
Email Senior Staff Reporter Emily Green at emily@streetroots.org.
Street Roots is an award-winning, nonprofit, weekly newspaper focusing on economic, environmental and social justice issues. Our newspaper is sold in Portland, Oregon, by people experiencing homelessness and/or extreme poverty as means of earning an income with dignity.
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Behind Aquarium Village, a popular Newport destination for tourists, are rows of storage units that have become living quarters for residents with nowhere else to rent.
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Many coastal residents live in old RVs, but most RV parks only allow new trailers. Idaho Point in Newport is known as an affordable place to park older RVs. It's currently home to several run-down campers sitting adjacent to a picturesque bay.
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Lincoln County Comprehensive Code and Zoning Code (2009)
1.0130 Economic Goals (2009 LCC Chapter 1, pg 21)
(1) To establish an economic planning process in the county.
(2) To support and encourage the expansion of existing industrial and commercial activities in appropriate locations.
(3) To support and encourage the creation of new industrial and commercial activities in appropriate locations.
(4) To recognize the environmental and developmental constraints in expansion of industrial, commercial, and residential activities.
(5) To improve the average wage in the county.
(6) To improve the quality of employment opportunities in Lincoln County.
1.0135 Economic Policies
(1) Lincoln County shall designate suitable lands for the creation and expansion of industrial and commercial activities.
(2) Lincoln County shall monitor employment on a systematic and periodic basis as a prime tool in estimating population change and land use demand.
(3) Lincoln County shall encourage, through the possible use of incentives, the location of preferred industrial activities in areas suited to and capable of supporting those activities and land uses.
(4) Lincoln County shall encourage the development of facilities supportive of the vocational and higher educational needs of the community.
(5) Lincoln County shall work with the State of Oregon to recognize host recreation county's need for greater support than other counties for public facility improvements to continue to meet the regional recreation needs.
(6) Lincoln County shall encourage the use of local contractors.
(7) Lincoln County shall encourage labor intensive commercial and industry.
(8) Lincoln County shall work with cities, port districts and the Administrative District 4 Council of Governments in the maintenance and support of the overall economic development plan to establish clear and concise long range economic goals.
(9) Lincoln County shall work with the cities port and special districts to promote commerce and industry.
(10) When conflicting land uses are proposed, the alternatives shall be evaluated based upon economic, social, energy, and environmental costs and benefits.
1.0160 Housing Goals (2009 LCC Chapter 1, pg 24)
(1) To assist in providing housing.
(2) To provide opportunities for a variety of housing choices, including low and moderate income housing to meet the needs, desires, and financial capabilities of all Lincoln County residents.
(3) To make housing more efficient.
1.0165 Housing Policies
(1) Lincoln County shall cooperate with interested cities in creating a county wide housing task force made up of citizens and policy makers, with a professional staff capability which if funds are available shall:
(a) Make known the scope and content of existing energy conservation and housing rehabilitation programs and encourage the use of these programs by assisting public and private groups and individuals in obtaining loan and grant monies; and
(b) Develop a plan for housing assistance which shall:
(A) Increase the amount of decent and affordable housing, including rentals;
(B) Increase the amount of lower-cost rental housing available to the elderly; and
(C) Decrease the proportion of their income which the elderly spend for housing.
(2) Lincoln County shall make the provisions of the Residential Landlord and Tenant Act (RLTA), ORS chapter 90, available to the public.
(3) Lincoln County shall designate suitable land area to meet rural residential needs.
1.0130 Economic Goals (2009 LCC Chapter 1, pg 21)
(1) To establish an economic planning process in the county.
(2) To support and encourage the expansion of existing industrial and commercial activities in appropriate locations.
(3) To support and encourage the creation of new industrial and commercial activities in appropriate locations.
(4) To recognize the environmental and developmental constraints in expansion of industrial, commercial, and residential activities.
(5) To improve the average wage in the county.
(6) To improve the quality of employment opportunities in Lincoln County.
1.0135 Economic Policies
(1) Lincoln County shall designate suitable lands for the creation and expansion of industrial and commercial activities.
(2) Lincoln County shall monitor employment on a systematic and periodic basis as a prime tool in estimating population change and land use demand.
(3) Lincoln County shall encourage, through the possible use of incentives, the location of preferred industrial activities in areas suited to and capable of supporting those activities and land uses.
(4) Lincoln County shall encourage the development of facilities supportive of the vocational and higher educational needs of the community.
(5) Lincoln County shall work with the State of Oregon to recognize host recreation county's need for greater support than other counties for public facility improvements to continue to meet the regional recreation needs.
(6) Lincoln County shall encourage the use of local contractors.
(7) Lincoln County shall encourage labor intensive commercial and industry.
(8) Lincoln County shall work with cities, port districts and the Administrative District 4 Council of Governments in the maintenance and support of the overall economic development plan to establish clear and concise long range economic goals.
(9) Lincoln County shall work with the cities port and special districts to promote commerce and industry.
(10) When conflicting land uses are proposed, the alternatives shall be evaluated based upon economic, social, energy, and environmental costs and benefits.
1.0160 Housing Goals (2009 LCC Chapter 1, pg 24)
(1) To assist in providing housing.
(2) To provide opportunities for a variety of housing choices, including low and moderate income housing to meet the needs, desires, and financial capabilities of all Lincoln County residents.
(3) To make housing more efficient.
1.0165 Housing Policies
(1) Lincoln County shall cooperate with interested cities in creating a county wide housing task force made up of citizens and policy makers, with a professional staff capability which if funds are available shall:
(a) Make known the scope and content of existing energy conservation and housing rehabilitation programs and encourage the use of these programs by assisting public and private groups and individuals in obtaining loan and grant monies; and
(b) Develop a plan for housing assistance which shall:
(A) Increase the amount of decent and affordable housing, including rentals;
(B) Increase the amount of lower-cost rental housing available to the elderly; and
(C) Decrease the proportion of their income which the elderly spend for housing.
(2) Lincoln County shall make the provisions of the Residential Landlord and Tenant Act (RLTA), ORS chapter 90, available to the public.
(3) Lincoln County shall designate suitable land area to meet rural residential needs.
As tourism grows along the Oregon Coast, so does the prevalence of vacation rentals
The Other Oregon: A Voice for Rural Oregon (2018)
The Other Oregon: A Voice for Rural Oregon (2018)
Though some places like Cannon Beach, with a median home price of more than $550,000, will struggle to be affordable, areas like Lincoln County has a median home price of about $277,000. It’s a price that could still be attainable for some of her clients if the homes were not being taken off the market to be used as vacation rentals. “We’re denied wonderful people trying to work in this community [Lincoln County] because we don’t have the supply,” Stiley said.
https://www.theotheroregon.com/features/feature_stories/how-vacation-rentals-impact-housing-along-the-oregon-coast/article_89a471a2-a271-11e9-8b43-63b916d062a8.html?utm_medium=social&utm_source=email&utm_campaign=user-share
"Middle-class homeowners will get 'priced out permanently' per real estate investor" (January 2021)
The number of homes for sale reached an all-time low in December, as buyers remained active and eager to buy even during the holiday season. National inventory declined by 39.6% over the last year, and fell below 700,000 for the first time, according to a new report from realtor.com
The U.S. housing market has been a consistent bright spot during the coronavirus crisis, buoying the economy, which in December lost jobs — 140,000 of them — for the first time since April. Even during such uncertain times, mortgage rates remain at historically low levels and many Americans are seeking more space as their homes have transformed into offices and schools overnight.
But given the low inventory and the quick turnaround of homes, middle class Americans are finding homeownership more inaccessible than ever, according to Grant Cardone, a real estate investor who manages a $1.4 billion portfolio of multifamily properties and also stars in Discovery Network’s (DISCA) reality series, "Undercover Billionaire.”
“The middle class are going to get priced out permanently. The great divide will get wider, wealthy people are picking up second and third homes like most people ... were buying toilet paper back in March. The average person is not able to grab a house today. After the pandemic, the banks went to 20% down, now they're doing double and triple checks to see if your future employment is stable,” he said during an interview with Yahoo Finance Live on Friday.
‘It’s going to get more and more difficult’Homes are selling quickly in this environment, spending an average of 66 days on the market as of December — 13 fewer days on average than in 2019, according to realtor.com. U.S. home price growth surged in October to levels not seen in six years, Yahoo Finance’s Amanda Fung reported.
“It's going to get more and more difficult for people to buy homes in the lowest interest rate environment we've ever had, the middle class will not be able to take advantage of this. This validates the concept which I've been pushing... cash is trash and the wealthy are turning cash into real assets,” he added.
https://finance.yahoo.com/amphtml/news/housing-real-estate-market-prices-grant-cardone-undercover-billionaire-211441245.html?guccounter=1
Environmental Policy Institute, "The Economic Costs and Benefits of Airbnb" (January 2019)
"The debates about whether and how to regulate [the STR Industry] often involve theories about their economic costs and benefits. This report aims to inform the debate by testing those theories. Specifically, it assesses the potential economic costs and benefits of the expansion of one of the most well-known of the [STR Industry]: the rental business Airbnb."
"The analysis shows that the costs of [STR Industry] expansion to renters and local jurisdictions likely exceed the benefits to travelers and property owners. Thus there is no reason policymakers should reverse long-standing regulatory decisions simple to accommodate the rise of a singe [industry]."
epi__22the_economic_cots_and_benefits_of_airbnb.pdf
K. Barron, E. Kung, D. Proserpio, "The Sharing Economy and Housing Affordability: Evidence from Airbnb" (May 2018)
"One policy implication would be that home-sharing regulations should at most seek to limit the reallocation of housing stock from the long-term to the short-term markets, but it should not discourage the sharing of primary residences by owner-occupiers."
"To summarize the state of the literature on home-sharing, research (including this paper) has found that home-sharing 1) raises local rental rates by causing a reallocation of the housing stock; 2) raises house prices through both the capitalization of rents and the increased ability to use excess capacity; and 3) induces market entry by small suppliers of short-term housing who compete with traditional suppliers (Zervas et al. (2017); Farronato and Fradkin (2018))."
https://static1.squarespace.com/static/5bb2d447a9ab951efbf6d10a/t/5bea6881562fa7934045a3f0/1542088837594/The+Sharing+Economy+and+Housing+Affordability.pdf
Harvard Law and Policy Review, "How Airbnb Short-Term Rentals Exacerbate Los Angeles's Affordable Housing Crisis: Analysis and Policy Recommendations" (September 2016)
"Airbnb is organizing constituents and mobilizing political support.98 This is why political stakeholders must regulate Airbnb STRs now, before the industry calcifies into Los Angeles’s political and economic structure. At the moment, local politics are favorable to increased regulations. Unions and neighborhood associations have united with their political adversaries—hotels and developers—to speak out against Airbnb."
"By framing the public narrative around the displacement that STRs cause, regulators can also win the support of influential faith leaders, as well as of the public. If the city brings Airbnb together with community stakeholders, the city can eliminate Airbnb’s corrosive effects on fair and affordable housing, and help all communities benefit from safe, integrated, and affordable neighborhoods."
http://blogs.ubc.ca/canadianliteratureparkinson/files/2016/06/How-Airbnb-Short-term-rentals-disrupted.pdf
G. Zervas, D Preserpio, J Byers, "The Rise of the Sharing Economy: Estimating the Impact of Airbnb on the Hotel Industry" (December 2013, Revised November 2016)
"Peer-to-peer markets, collectively known as the sharing economy, have emerged as alternative suppliers of goods and services traditionally provided by long-established industries. We explore the economic impact of the sharing economy on incumbent rooms by studying the case of Airbnb, a prominent platform for short-term accommodations. We analyze Airbnb's entry into the state of Texas, and quantify its impact on the Texas hotel industry over the subsequent decade."
"We estimate that in Austin, where Airbnb supply is highest, the causal impact on hotel revenue is in the 8-10% range; moreover, the impact is non-uniform, with lower-priced hotels and those hotels not catering to business travelers being the most aected. The impact manifests itself primarily through less aggressive hotel room pricing, an impact that bene ts all consumers, not just participants in the sharing economy. The price response is especially pronounced during periods of peak demand, such as SXSW, and is due to a dierentiating feature of peer-to-peer platforms enabling instantaneous supply to scale to meet demand."
http://people.bu.edu/zg/publications/airbnb.pdf
Dessi Mia Carbajal "The Impact of Short Term Rentals on Affordable Housing in Oakland: A Report and Recommendations" (Dec 2015)
“But given the inelasticity of the housing supply, it is inappropriate for investors to permanently remove units from the residential housing stock in order to cater to tourists. Fundamentally, I would argue that the raison d’eˆtre of Los Angeles’s housing stock is to serve its residents. Thus, Los Angeles should ban year-round listings of apartments on Airbnb and similar websites, perhaps by emulating San Francisco’s proposed “Ballot Measure F” and setting a seventy-five-day limit on the number of days that a unit can be listed."
https://www.naceda.org/assets/EBHO%20Short%20Term%20Rental%20Impact%20Report.pdf
LAANE, "Short-term Rentals and LA’s Lost Housing: An Update to “Airbnb, etc") (August 2015)
"Our updated analysis has shown that the short-term rental industry has grown significantly over the last nine months (32% increase from Oct 2014 to July 2015.) Its scope is far larger than previous estimates, and that growth has occurred most quickly in new areas. All this growth has undermined efforts to build new housing to meet current market demand, especially in areas with the highest concentrations of short-term rentals. It is critical to adopt regulations that foster sharing but protect housing from the commercial operations that dominate the STR market."
http://www.laane.org/wp-content/uploads/2015/08/Short-Term_RentalsLAs-Lost_Housing.pdf
LAANE, "Airbnb, Rising Rents, and the Housing Crisis in LA" (March 2015)
“AirBnB changes this basic formula. By incentivizing the large-scale conversion of residential units into tourist accommodations, AirBnB forces neighborhoods and cities to bear the costs of its business model. Residents must adapt to a tighter housing market. Increased tourist traffic alters neighborhood character while introducing new safety risks. Cities lose out on revenue that could have been invested in improving the basic quality of life for its residents. Jobs are lost and wages are lowered in the hospitality industry.”
http://www.laane.org/wp-content/uploads/2015/08/Short-Term_RentalsLAs-Lost_Housing.pdf
INC Zoning and Planning Sub-Committee, “Analyzing the Impact to Denver’s Neighborhoods Regarding Short-Term Rentals, Including Short-Term Vacation Rentals" (Dec 2014)
"Turning neighborhoods into areas for motels and hotels destroys the integrity of the neighborhood and, more importantly, the expectations of the property owners who purchased the property with the intention of a neighborhood remaining a residential neighborhood. This is a city we call home. Is City Council propounding legislation that benefits a few residents and “shared economy” entrepreneurs/opportunists at the expense, both monetary and in terms of quality of life, of most Denver residents? We hope not."
http://denverinc.org/wp-content/uploads/2014/11/8th_Analyzing_the_Impact_to_Denvers_Neighborhoods___.pdf
A federal appeals court has upheld a Santa Monica ordinance banning most short-term vacation rental
LA Times
October 3, 2020
https://www.latimes.com/california/story/2019-10-03/9th-circuit-santa-monica-airbnb?_amp=true
LA Times
October 3, 2020
https://www.latimes.com/california/story/2019-10-03/9th-circuit-santa-monica-airbnb?_amp=true
A federal appeals court on Thursday unanimously upheld a Santa Monica ordinance banning most short-term vacation rentals.
A three-judge panel of the U.S. 9th Circuit of Appeals rejected a potential class-action lawsuit against the city, which passed the law in 2015 on the grounds that visitors who rent through Airbnb Inc. or other companies “sometimes disrupt the quietude and residential character of the neighborhoods.”
The ordinance prohibits vacation rentals of 30 days or fewer, except when a primary resident remains in the home.
Santa Monica resident Arlene Rosenblatt had been renting out her home for $350 a night when she and her husband traveled. She charged in a lawsuit that the ordinance hindered commerce in violation of the federal Constitution.
Online short-term rental companies allowed tourists access to affordable lodging over “the ultra-luxurious, highly occupied and pricey hotels in the city,” the lawsuit argued.
Santa Monica’s real intent in passing the ordinance, Rosenblatt contended, was to boost demand for the hotels and reverse a decline in revenue from the city’s 14% transient occupancy tax, paid by hotels but not by short-term renters.
The lawsuit alleged that the ordinance illegally denied travelers from out of state access to Santa Monica’s residential neighborhoods. The 9th Circuit rejected that contention, concluding the city offered reasonable alternatives to the vacation rentals.
The ordinance “does not discriminate against persons outside of Santa Monica, who stand on equal footing with Santa Monica residents in their ability to purchase Santa Monica property and reside there,” Judge Jacqueline H. Nguyen, an Obama appointee, wrote for the court.
Rosenblatt also alleged that the ordinance directly regulates interstate commerce because 95% of short-term rentals in Santa Monica involved out-of-state travelers. Disagreeing, the 9th Circuit said the law penalizes conduct only in Santa Monica, regardless of whether the visitors come from California or elsewhere.
Santa Monica is considered to have one of the strictest bans on short-term rentals in the country. A report by Conde Nast Traveler last year identified cities around the world that regulate Airbnb in varying degrees. They include Los Angeles, San Francisco, Charleston, Amsterdam, New York, Mallorca, Paris and Barcelona.
After more than three years of debate, Los Angeles passed its ordinance last December limiting short-term rentals to primary residences, not second homes or investment property. The law was intended to deter people from buying apartments and running them like hotels, a practice that activists said was exacerbating the housing crisis.
But the rules did not take immediate effect. Los Angeles gave hosts until November to register with the city through a new system.
Airbnb argued it needed more time to build a computerized system to share rental information with the city — one of the ways that online platforms can comply with the new ordinance. A spokesman for the city’s planning department said there were other ways to comply and the new rules would take effect Nov. 1.
Rosenblatt’s challenge to the Santa Monica ordinance reached the 9th Circuit on an appeal of a district judge’s decision to dismiss the lawsuit. Without a trial, the judge ruled there was no legal basis under which Rosenblatt could prevail.
The 9th Circuit rejected another challenge of the law earlier this year by Airbnb and Expedia Group Inc.’s HomeAway.
A three-judge panel of the U.S. 9th Circuit of Appeals rejected a potential class-action lawsuit against the city, which passed the law in 2015 on the grounds that visitors who rent through Airbnb Inc. or other companies “sometimes disrupt the quietude and residential character of the neighborhoods.”
The ordinance prohibits vacation rentals of 30 days or fewer, except when a primary resident remains in the home.
Santa Monica resident Arlene Rosenblatt had been renting out her home for $350 a night when she and her husband traveled. She charged in a lawsuit that the ordinance hindered commerce in violation of the federal Constitution.
Online short-term rental companies allowed tourists access to affordable lodging over “the ultra-luxurious, highly occupied and pricey hotels in the city,” the lawsuit argued.
Santa Monica’s real intent in passing the ordinance, Rosenblatt contended, was to boost demand for the hotels and reverse a decline in revenue from the city’s 14% transient occupancy tax, paid by hotels but not by short-term renters.
The lawsuit alleged that the ordinance illegally denied travelers from out of state access to Santa Monica’s residential neighborhoods. The 9th Circuit rejected that contention, concluding the city offered reasonable alternatives to the vacation rentals.
The ordinance “does not discriminate against persons outside of Santa Monica, who stand on equal footing with Santa Monica residents in their ability to purchase Santa Monica property and reside there,” Judge Jacqueline H. Nguyen, an Obama appointee, wrote for the court.
Rosenblatt also alleged that the ordinance directly regulates interstate commerce because 95% of short-term rentals in Santa Monica involved out-of-state travelers. Disagreeing, the 9th Circuit said the law penalizes conduct only in Santa Monica, regardless of whether the visitors come from California or elsewhere.
Santa Monica is considered to have one of the strictest bans on short-term rentals in the country. A report by Conde Nast Traveler last year identified cities around the world that regulate Airbnb in varying degrees. They include Los Angeles, San Francisco, Charleston, Amsterdam, New York, Mallorca, Paris and Barcelona.
After more than three years of debate, Los Angeles passed its ordinance last December limiting short-term rentals to primary residences, not second homes or investment property. The law was intended to deter people from buying apartments and running them like hotels, a practice that activists said was exacerbating the housing crisis.
But the rules did not take immediate effect. Los Angeles gave hosts until November to register with the city through a new system.
Airbnb argued it needed more time to build a computerized system to share rental information with the city — one of the ways that online platforms can comply with the new ordinance. A spokesman for the city’s planning department said there were other ways to comply and the new rules would take effect Nov. 1.
Rosenblatt’s challenge to the Santa Monica ordinance reached the 9th Circuit on an appeal of a district judge’s decision to dismiss the lawsuit. Without a trial, the judge ruled there was no legal basis under which Rosenblatt could prevail.
The 9th Circuit rejected another challenge of the law earlier this year by Airbnb and Expedia Group Inc.’s HomeAway.
City of Santa Monica Prevails Against Airbnb and HomeAway at Ninth Circuit in Unanimous Decision
City of Santa Monica Press
March 13, 2019
https://www.santamonica.gov/press/2019/03/13/city-of-santa-monica-prevails-against-airbnb-and-homeaway-at-ninth-circuit-in-unanimous-decision
City of Santa Monica Press
March 13, 2019
https://www.santamonica.gov/press/2019/03/13/city-of-santa-monica-prevails-against-airbnb-and-homeaway-at-ninth-circuit-in-unanimous-decision
The Ninth Circuit Court of Appeals today affirmed the City of Santa Monica’s Home-Sharing Ordinance in the face of a challenge brought by Airbnb and HomeAway.com. This ruling confirms the City’s right to regulate home sharing in order to protect its limited housing stock for residents.
The district court and now a unanimous panel of three Ninth Circuit judges have agreed that the City’s Home-Sharing Ordinance is a lawful housing and rental regulation with the “central and significant goal” of preserving the City’s “housing stock and preserving the quality and nature of residential neighborhoods.”
“We are thrilled to have confirmation from the Ninth Circuit that our balanced approach to home sharing is working at a time when housing and affordability continue to challenge the region,” said Santa Monica Mayor Gleam Davis. “This is a big win for Santa Monica residents and our residential neighborhoods.”
This decision affirms the district court’s dismissal of Airbnb and HomeAway’s claims that the City’s Home-Sharing Ordinance violated the Communications Decency Act and the First Amendment.
City Attorney Lane Dilg said, “The Santa Monica City Attorney’s Office is pleased that the Ninth Circuit has unanimously upheld the City’s Home-Sharing Ordinance. This critical local law prevents residences in our community from being converted into de facto hotels; it protects affordable housing and it helps residents stay in their homes. As the Ninth Circuit itself has said, the Communications Decency Act does not ‘create a lawless no-man’s land on the internet.’ We look forward to collaborating and cooperating with technology companies to advance the community’s best interests, but the platforms’ broad assertions of immunity in this case simply go too far.”
The City was represented in this case by attorneys from the Santa Monica City Attorney’s Office.
Home-Sharing in Santa Monica
After maintaining a multi-decade prohibition against short-term rentals in residential districts, in 2015, the City eased this prohibition by authorizing a form of short-term rentals known as home-sharing, which permits City residents who obtain a City license to host visitors for compensation for a period of less than 31 days, as long as the resident and visitor are both present in the home. Un-hosted short-term rentals of residential housing, known as vacation rentals, remain unlawful in Santa Monica. This legislation struck an important balance by enabling current and prospective residents to supplement income through home-sharing to meet increased rents and housing prices, while ensuring that Santa Monica’s housing units, and particularly affordable units, would not be surreptitiously or openly converted into de facto hotels.
As amended in 2017, this legislation also imposes modest regulations on businesses, such as Airbnb and HomeAway, that engage in booking transactions for short-term rentals of housing units for profit. The City’s ordinance prohibits such businesses from providing and collecting a fee for booking services for unlicensed (and therefore unlawful) short-term rentals.
For more information on the City’s Home-Sharing Ordinance or to apply for a Home-Sharing License, visit www.smgov.net/homeshare.
The district court and now a unanimous panel of three Ninth Circuit judges have agreed that the City’s Home-Sharing Ordinance is a lawful housing and rental regulation with the “central and significant goal” of preserving the City’s “housing stock and preserving the quality and nature of residential neighborhoods.”
“We are thrilled to have confirmation from the Ninth Circuit that our balanced approach to home sharing is working at a time when housing and affordability continue to challenge the region,” said Santa Monica Mayor Gleam Davis. “This is a big win for Santa Monica residents and our residential neighborhoods.”
This decision affirms the district court’s dismissal of Airbnb and HomeAway’s claims that the City’s Home-Sharing Ordinance violated the Communications Decency Act and the First Amendment.
City Attorney Lane Dilg said, “The Santa Monica City Attorney’s Office is pleased that the Ninth Circuit has unanimously upheld the City’s Home-Sharing Ordinance. This critical local law prevents residences in our community from being converted into de facto hotels; it protects affordable housing and it helps residents stay in their homes. As the Ninth Circuit itself has said, the Communications Decency Act does not ‘create a lawless no-man’s land on the internet.’ We look forward to collaborating and cooperating with technology companies to advance the community’s best interests, but the platforms’ broad assertions of immunity in this case simply go too far.”
The City was represented in this case by attorneys from the Santa Monica City Attorney’s Office.
Home-Sharing in Santa Monica
After maintaining a multi-decade prohibition against short-term rentals in residential districts, in 2015, the City eased this prohibition by authorizing a form of short-term rentals known as home-sharing, which permits City residents who obtain a City license to host visitors for compensation for a period of less than 31 days, as long as the resident and visitor are both present in the home. Un-hosted short-term rentals of residential housing, known as vacation rentals, remain unlawful in Santa Monica. This legislation struck an important balance by enabling current and prospective residents to supplement income through home-sharing to meet increased rents and housing prices, while ensuring that Santa Monica’s housing units, and particularly affordable units, would not be surreptitiously or openly converted into de facto hotels.
As amended in 2017, this legislation also imposes modest regulations on businesses, such as Airbnb and HomeAway, that engage in booking transactions for short-term rentals of housing units for profit. The City’s ordinance prohibits such businesses from providing and collecting a fee for booking services for unlicensed (and therefore unlawful) short-term rentals.
For more information on the City’s Home-Sharing Ordinance or to apply for a Home-Sharing License, visit www.smgov.net/homeshare.
"New regulations slashing San Diego short-term rentals by 50 percent
endorsed by Planning Commission"
San Diego Union Tribune
December 3, 2020
https://www.sandiegouniontribune.com/business/story/2020-12-03/new-regulations-slashing-san-diego-short-term-rentals-by-50-percent-endorsed-by-planning-commission
endorsed by Planning Commission"
San Diego Union Tribune
December 3, 2020
https://www.sandiegouniontribune.com/business/story/2020-12-03/new-regulations-slashing-san-diego-short-term-rentals-by-50-percent-endorsed-by-planning-commission
The city’s Planning Commission is recommending that San Diego adopt new regulations that would sharply cap the number of short-term vacation rentals, with licenses distributed through a lottery system.
Tough new Airbnb regulations that would allocate vacation rentals via a lottery system still need approval from the City Council, which should weigh in by early next year.
A new set of regulations that would slash the number of San Diego’s Airbnb-style rentals by 50 percent was endorsed Thursday by the city’s Planning Commission, setting the stage for what will likely be a contentious hearing before the City Council early next year.
The unanimous action of the commission represents a key milestone in the city’s years-long struggle to reach an agreement on how to both legalize and regulate vacation rentals, which have mushroomed in recent years with the rise in popularity of home-sharing platforms like Airbnb.
“I think we’ve come up with something that is very supportable,” said Commissioner James Whalen. “We received well over 200 comments in writing, and most of them were not supportive of doing short-term vacation rental ordinances. Obviously, the number of people complaining are making it clear there is a problem we need to address. On the other side of the coin, there are a lot of people who really depend on the income from renting their homes out for short term vacation rentals. The challenge has been where we have these people who are doing it as a business.
“Given that there‘s agreement from everybody that there aren’t adequate regulations now, despite what some people have said, we need to act.”
Under the proposal the commission recommended for approval, the number of homes that could be fully rented out for short-term stays of less than 30 days while the owner or resident is not present would be capped at about 6,500 citywide, which includes a carve-out for close to 1,100 such rentals in Mission Beach.
For all but the community of Mission Beach, the number of yearly vacation rentals that would be permitted would be capped at 1 percent of the city’s more than 540,000 housing units. For Mission Beach, which has a long history of vacation rentals, the proportionate allowance would be much larger, representing 30 percent of the community’s total dwelling units.
The effect of the proposed restrictions would be to reduce the number of whole-home short-term rentals, which the city believes totaled close to 13,000 as of last summer, by 50 percent. Individuals would be limited to just one short-term rental license each as long as they had the right to occupy the dwelling unit being rented out, and a two-night minimum would be required of all guests for the rental of entire dwellings.
Licenses would be granted via a lottery, but the Planning Commission is asking, in the interest of equity, that the City Council consider divvying up the allocation equally among the nine council districts. If approved by the council, the ordinance would go into effect Jan. 1, 2022.
“There are certain neighborhoods in the city that are more popular for Airbnb hosts, and I want to make sure we are not inadvertently creating a situation where certain council districts that may be less economically affluent or less politically active will lose out on the ability to participate in this,” said Commissioner Matthew Boomhower. “While I recognize that the lottery process is random by nature, I want to make sure that council has the ability to consider how we make sure we’re distributing the lottery chances equitably across all San Diegans and not allowing it to be gobbled up by folks who have the good fortune to own property in our beach neighborhoods.”
The proposed ordinance before the commission originated from City Councilwoman Jennifer Campbell, who represents many of the beach communities and was able to enlist the support of Expedia, the parent company of the HomeAway and VRBO home-sharing platforms, and Unite Here Local 30, the labor union that represents hotel workers. The 1 percent cap agreed upon by commissioners is higher than the 0.75 percent threshold included in the original Campbell proposal.
Campbell, who was praised by one commissioner for being brave enough to take on the volatile issue of short-term rentals, applauded the commission’s action.
“San Diegans have been ready for a plan that puts housing stock back on the market, provides licensing, regulation and enforcement in the short-term vacation rental space,” she said in a statement.
Airbnb, the dominant home-sharing platform in San Diego, declined to comment following the commission action. During the hearing, Airbnb Senior Public Policy Manager John Choi advocated for a 1.2 percent cap, calling it a reasonable compromise.
“Our primary goal is to establish clear, reasonable regulations to create clear roadmaps for our hosts to continue opening up their homes to guests in San Diego,” Choi said. “We proposed 1.2 percent as a reasonable, modest increase from Dr. Campbell’s ordinance ... We think that will still result in more than a 50 percent reduction, which we think is a huge sacrifice our hosts are making in the effort to create stability and create clear rules for the road for our hosts.”
Unite Here countered that Airbnb’s proposed cap was not modest nor reasonable. The Expedia Group released a statement following the meeting saying it was pleased with the commission’s action.
Under the proposed regulations, the governance of short-term rentals would be guided by a tiered system that imposes no limits on those hosts who rent out a home for no more than 20 days out of the year. Similarly, there would be no limits for individuals who rent out a room or two in their home while they are residing there. The proposal also allows those owners or permanent residents to be absent from their units for up to 90 days in a year.
A large part of the proposed measure deals with enforcement, a vexing problem that has dogged the city for years and raised complaints from homeowners that the city has done little to crack down on problematic rentals with late-night noise and partying.
The measure outlines steps that would be taken for enforcing the new regulations, including the hiring of new code enforcement officers. Hosts who violate the regulations would be subject to fines and after three violations, a license could be revoked.
San Diego has been wrestling with how to regulate vacation rentals for at least the last five years but has been unable to put in place any rules that would stick. More recently, the City Attorney’s office has been cracking down on especially problematic rentals. In late October City Attorney Mara Elliott announced she was taking steps to shut down a La Jolla Farms short-term vacation rental where police reported multiple raucous parties, including some that drew as many as 300 attendees.
There remains a large contingent of homeowners who believe that short-term rentals should be banned from residentially zoned neighborhoods, based on the current municipal code, and some urged the commissioners to reject the Campbell plan.
“I bought my dream house here 20 years ago, and the last four years it’s been next to a hotel that has an unregulated outside bar in the front of the house, and on Saturday morning I awoke to gunshot fire,” said Bird Rock resident Steven Dowdy. “When are you going to support the rights of the citizens of San Diego? We bought houses in neighborhoods, we didn’t buy homes in commercial zones and you’re turning our neighborhoods into a commercial zone. Shame on you.”
Tough new Airbnb regulations that would allocate vacation rentals via a lottery system still need approval from the City Council, which should weigh in by early next year.
A new set of regulations that would slash the number of San Diego’s Airbnb-style rentals by 50 percent was endorsed Thursday by the city’s Planning Commission, setting the stage for what will likely be a contentious hearing before the City Council early next year.
The unanimous action of the commission represents a key milestone in the city’s years-long struggle to reach an agreement on how to both legalize and regulate vacation rentals, which have mushroomed in recent years with the rise in popularity of home-sharing platforms like Airbnb.
“I think we’ve come up with something that is very supportable,” said Commissioner James Whalen. “We received well over 200 comments in writing, and most of them were not supportive of doing short-term vacation rental ordinances. Obviously, the number of people complaining are making it clear there is a problem we need to address. On the other side of the coin, there are a lot of people who really depend on the income from renting their homes out for short term vacation rentals. The challenge has been where we have these people who are doing it as a business.
“Given that there‘s agreement from everybody that there aren’t adequate regulations now, despite what some people have said, we need to act.”
Under the proposal the commission recommended for approval, the number of homes that could be fully rented out for short-term stays of less than 30 days while the owner or resident is not present would be capped at about 6,500 citywide, which includes a carve-out for close to 1,100 such rentals in Mission Beach.
For all but the community of Mission Beach, the number of yearly vacation rentals that would be permitted would be capped at 1 percent of the city’s more than 540,000 housing units. For Mission Beach, which has a long history of vacation rentals, the proportionate allowance would be much larger, representing 30 percent of the community’s total dwelling units.
The effect of the proposed restrictions would be to reduce the number of whole-home short-term rentals, which the city believes totaled close to 13,000 as of last summer, by 50 percent. Individuals would be limited to just one short-term rental license each as long as they had the right to occupy the dwelling unit being rented out, and a two-night minimum would be required of all guests for the rental of entire dwellings.
Licenses would be granted via a lottery, but the Planning Commission is asking, in the interest of equity, that the City Council consider divvying up the allocation equally among the nine council districts. If approved by the council, the ordinance would go into effect Jan. 1, 2022.
“There are certain neighborhoods in the city that are more popular for Airbnb hosts, and I want to make sure we are not inadvertently creating a situation where certain council districts that may be less economically affluent or less politically active will lose out on the ability to participate in this,” said Commissioner Matthew Boomhower. “While I recognize that the lottery process is random by nature, I want to make sure that council has the ability to consider how we make sure we’re distributing the lottery chances equitably across all San Diegans and not allowing it to be gobbled up by folks who have the good fortune to own property in our beach neighborhoods.”
The proposed ordinance before the commission originated from City Councilwoman Jennifer Campbell, who represents many of the beach communities and was able to enlist the support of Expedia, the parent company of the HomeAway and VRBO home-sharing platforms, and Unite Here Local 30, the labor union that represents hotel workers. The 1 percent cap agreed upon by commissioners is higher than the 0.75 percent threshold included in the original Campbell proposal.
Campbell, who was praised by one commissioner for being brave enough to take on the volatile issue of short-term rentals, applauded the commission’s action.
“San Diegans have been ready for a plan that puts housing stock back on the market, provides licensing, regulation and enforcement in the short-term vacation rental space,” she said in a statement.
Airbnb, the dominant home-sharing platform in San Diego, declined to comment following the commission action. During the hearing, Airbnb Senior Public Policy Manager John Choi advocated for a 1.2 percent cap, calling it a reasonable compromise.
“Our primary goal is to establish clear, reasonable regulations to create clear roadmaps for our hosts to continue opening up their homes to guests in San Diego,” Choi said. “We proposed 1.2 percent as a reasonable, modest increase from Dr. Campbell’s ordinance ... We think that will still result in more than a 50 percent reduction, which we think is a huge sacrifice our hosts are making in the effort to create stability and create clear rules for the road for our hosts.”
Unite Here countered that Airbnb’s proposed cap was not modest nor reasonable. The Expedia Group released a statement following the meeting saying it was pleased with the commission’s action.
Under the proposed regulations, the governance of short-term rentals would be guided by a tiered system that imposes no limits on those hosts who rent out a home for no more than 20 days out of the year. Similarly, there would be no limits for individuals who rent out a room or two in their home while they are residing there. The proposal also allows those owners or permanent residents to be absent from their units for up to 90 days in a year.
A large part of the proposed measure deals with enforcement, a vexing problem that has dogged the city for years and raised complaints from homeowners that the city has done little to crack down on problematic rentals with late-night noise and partying.
The measure outlines steps that would be taken for enforcing the new regulations, including the hiring of new code enforcement officers. Hosts who violate the regulations would be subject to fines and after three violations, a license could be revoked.
San Diego has been wrestling with how to regulate vacation rentals for at least the last five years but has been unable to put in place any rules that would stick. More recently, the City Attorney’s office has been cracking down on especially problematic rentals. In late October City Attorney Mara Elliott announced she was taking steps to shut down a La Jolla Farms short-term vacation rental where police reported multiple raucous parties, including some that drew as many as 300 attendees.
There remains a large contingent of homeowners who believe that short-term rentals should be banned from residentially zoned neighborhoods, based on the current municipal code, and some urged the commissioners to reject the Campbell plan.
“I bought my dream house here 20 years ago, and the last four years it’s been next to a hotel that has an unregulated outside bar in the front of the house, and on Saturday morning I awoke to gunshot fire,” said Bird Rock resident Steven Dowdy. “When are you going to support the rights of the citizens of San Diego? We bought houses in neighborhoods, we didn’t buy homes in commercial zones and you’re turning our neighborhoods into a commercial zone. Shame on you.”
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"Denver City Council approves $1,000 fine for companies violating short-term rental rules"
The Denver Post
November 23, 2020
https://www.denverpost.com/2020/11/23/denver-council-airbnb-short-term-rental-fines/
The Denver Post
November 23, 2020
https://www.denverpost.com/2020/11/23/denver-council-airbnb-short-term-rental-fines/
After three fruitless years of negotiating with Airbnb — with no end in sight — Denver officials will now fine short-term rental companies $1,000 for each illegal short-term rental transaction, City Council determined Monday.
For years the city’s short-term rental market has been peppered with outdated and unlicensed listings. This can result in fines for unsuspecting property owners who bought properties already listed on short-term rental sites by previous owners who failed to remove the listings.
Denver Department of Excise and License officials have tried negotiating with Airbnb — which controls the vast majority of the city’s short-term rental market — and other companies, asking them to tie each online listing to a rental license number and expiration date. The negotiations have yielded no concrete results, other than the frustration of city officials, so the department proposed the fine.
“If global corporations want to operate in Denver and profit from the hard work of our host community and the features that make Denver a world class city, those global corporations need to shoulder their fair share of the responsibility for compliance,” Eric Escudero, excise and license spokesman, said in an email.
Council approved the proposal unanimously on a consent agenda, signaling a lack of controversy surrounding the issue with city officials.
In short, starting Feb. 1, the rule change will fine booking service providers like Airbnb $1,000 for each violation.
“Denver has been asking the major platforms to prevent bookings at unlicensed short-term rentals since 2017 to help us achieve our compliance goals, but we have not seen any voluntary compliance from these platforms,” Escudero said. “Thus, the law is necessary to ensure such booking service providers are accountable if they are profiting from illegal activity.”
The city currently has about 1,985 legal and active short-term rental listings, Escudero said.
But those are only the legal listings. Because more than 80% of Denver’s listings typically comply with licensing regulations, the total number of properties on rental sites is likely substantially higher.
But there is reason to believe Denver’s new regulation will not be well received by the company. Similar moves by cities like New York City, San Francisco and Santa Monica, Calif., were met with litigation. Ultimately, however, the company settled those three lawsuits and agreed to better comply with the cities’ short-term rental laws.
For years the city’s short-term rental market has been peppered with outdated and unlicensed listings. This can result in fines for unsuspecting property owners who bought properties already listed on short-term rental sites by previous owners who failed to remove the listings.
Denver Department of Excise and License officials have tried negotiating with Airbnb — which controls the vast majority of the city’s short-term rental market — and other companies, asking them to tie each online listing to a rental license number and expiration date. The negotiations have yielded no concrete results, other than the frustration of city officials, so the department proposed the fine.
“If global corporations want to operate in Denver and profit from the hard work of our host community and the features that make Denver a world class city, those global corporations need to shoulder their fair share of the responsibility for compliance,” Eric Escudero, excise and license spokesman, said in an email.
Council approved the proposal unanimously on a consent agenda, signaling a lack of controversy surrounding the issue with city officials.
In short, starting Feb. 1, the rule change will fine booking service providers like Airbnb $1,000 for each violation.
“Denver has been asking the major platforms to prevent bookings at unlicensed short-term rentals since 2017 to help us achieve our compliance goals, but we have not seen any voluntary compliance from these platforms,” Escudero said. “Thus, the law is necessary to ensure such booking service providers are accountable if they are profiting from illegal activity.”
The city currently has about 1,985 legal and active short-term rental listings, Escudero said.
But those are only the legal listings. Because more than 80% of Denver’s listings typically comply with licensing regulations, the total number of properties on rental sites is likely substantially higher.
But there is reason to believe Denver’s new regulation will not be well received by the company. Similar moves by cities like New York City, San Francisco and Santa Monica, Calif., were met with litigation. Ultimately, however, the company settled those three lawsuits and agreed to better comply with the cities’ short-term rental laws.
“UK: Welsh Councillor Aaron Wynne attacked Airbnb this week, calling the platform a “blight on communities,” and stating he wants to ban the platform in Wales.”
ShortTermRentalz
September 2020
https://shorttermrentalz.com/news/welsh-councillor-airbnb-blight/
ShortTermRentalz
September 2020
https://shorttermrentalz.com/news/welsh-councillor-airbnb-blight/
“It’s just not sustainable to have so much of our housing stock out of the reach of the people who want to and need to live here. The Welsh government needs to act and change the planning rules so homes can’t be turned over to be used for commercial interests that do not benefit our communities.”
Airbnb Challenged by Angry Neighbors
Wall Street Journal
December 10, 2020
https://www.wsj.com/articles/airbnbs-ipo-warning-unhappy-neighbors-are-fighting-back-11607533225
Wall Street Journal
December 10, 2020
https://www.wsj.com/articles/airbnbs-ipo-warning-unhappy-neighbors-are-fighting-back-11607533225
Unfavorable local regulations loom as company begins trading publicly.
In the dozen years since it was founded, Airbnb Inc. has moved into hundreds of U.S. cities, transforming many of them into vacation-rental meccas.
In response, residents across the country have ratcheted up grass-roots efforts aimed at keeping authority over short-term rentals in the hands of towns and cities.
Airbnb shares are scheduled to begin trading on Thursday on the Nasdaq Stock Market after an initial public offering. The company priced its shares at $68 apiece on Wednesday, according to people familiar with the matter, setting a valuation of about $47 billion based on a fully diluted share count and including proceeds of the offering. Airbnb has warned prospective investors that managing its success in the face of angry neighbors and unfavorable local laws is among its biggest challenges in the U.S. and around the world.
Many Silicon Valley tech giants have battled regulators in Washington, D.C., and state capitals. Airbnb’s fights are breaking out city by city. For the company, the opposition could yield slower-than-expected growth and higher costs if local authorities impose restrictions on short-term rentals.
The Covid-19 pandemic, which looked disastrous for the company in the spring, has instead fueled an explosion in rental demand among people flocking to popular destinations within driving distance. In August, half of Airbnb’s global bookings were for stays within 300 miles of the guest’s location, the company said.
The popularity of short-term vacation rentals has generated local campaigns and generated publicity about the downside of living next door to a shifting cast of visitors. Denver, Boston and Santa Monica, Calif., are among the U.S. cities that have tightened rules on the operation of short-term rentals.
An Airbnb spokesman said the company “cannot comment for the record because we are in a quiet period” ahead of the IPO. The company has said in the past that its business allows homeowners to earn a livelihood and that its listings bring tax revenue to cities and states.
In Arizona, the one state that passed a law removing the authority of cities to police short-term rentals, at least two state lawmakers are aiming for bills next year to counter the 2016 law. The law was sold to the legislature as “an old couple making a few extra bucks by renting their spare bedroom,” said John Kavanagh, the only state senator to vote against it at the time. “That’s not what ended up happening.”
Investors poured into affluent neighborhoods like Paradise Valley, Ariz., a suburb of Phoenix, where they snapped up townhouses to rent on Airbnb, Mayor Jerry Bien-Willner said. Data compiled for the city show that 94% of short-term rental listings in Paradise Valley are stand-alone houses without owners living on-site.
Tensions grew, Mr. Bien-Willner said, after a flurry of complaints from neighbors over noisy house parties and crime at the short-term rentals. Cities can do little because they have no say over leasing the properties, he said.
Some Arizonans complained their homes declined in value because no one but investors wanted to buy a house next to a short-term rental, according to Mr. Bien-Willner. “You don’t know your neighbors anymore,” he said.
In Sedona, Ariz., a tourist hot spot popular for its striking sandstone canyons, high demand for Airbnb rentals worsened the shortage of affordable housing and “demolished the long-term rental market,” Mayor Sandy Moriarty said. So many residents have moved out that an elementary school closed last year, she said. The city tried to impose zoning restrictions in residential neighborhoods, she said, but was blocked by the state law.
On Wednesday, more than two dozen Arizona mayors wrote to Airbnb Chief Executive Brian Chesky, outlining the detrimental impact of short-term rentals on their neighborhoods, including large parties during the pandemic. The company banned house parties at its listings late last year, and it took legal action this year against at least four guests for violating those terms.
In Scottsdale, Ariz., Marjorie Pennock woke up to the sound of gunfire in mid-October, she said. A group of partygoers at the short-term rental property next door drew weapons and fired. One person was shot in the arm. Five homes were struck in the crossfire, according to a police report, and more than 100 shell casings were recovered outside Ms. Pennock’s home.
“I’m in my bedroom thinking I’m going to die,” she said.
Block party
Bill Hunter, a retired banker campaigning to change the Arizona law, learned about the shooting while he was in Scottsdale distributing yard signs that said “Homes Not Hotels.” He arrived in Ms. Pennock’s neighborhood the next day and found dozens of residents gathered on the street, eager to speak to him. “All of a sudden, I’m giving a seminar about what they could do to pressure their local representatives to change the law,” he said.
Mr. Hunter, a 65-year-old resident of Paradise Valley, began his work last year, he said, after the house next door turned into a party house rental. When he learned that Arizona had taken away the power of cities to regulate such properties, he started a group called Neighbors Not Nightmares, hoping to organize other aggrieved homeowners.
He said he rolled out a website built by a consultant he found on Craigslist and who worked out of an RV. Mr. Hunter encouraged people to email state lawmakers, and hundreds shared their stories.
“The emails I’ve received are heartbreaking,” said state Sen. Kate Brophy McGee. She was moved by stories told by agitated neighbors and introduced a bill this year to return some power to cities. The bill sailed through the state Senate in February, but expired in the House when the legislature paused in the pandemic. Ms. McGee, a Republican, lost her re-election bid last month.
Mr. Hunter’s group prepared a survey for all 154 candidates running for the Arizona legislature in the November election and pressed them in emails and phone calls to declare a position on policing short-term rentals. He posted their answers, as well as the names of those who didn’t respond, urging people to vote for those who promised legislative action. State Rep. Aaron Lieberman, a Democrat, was one who promised to throw his weight behind the group’s cause. He was re-elected last month and said he would try to repeal the state law next year. “There’s strength in numbers, and people keep sharing horror stories again and again and again,” he said. “It’s the issue that I’ve heard the most from people about.”
Mr. Lieberman, who earlier this year made an unsuccessful attempt to repeal the 2016 law, expects to draw support from lawmakers who pledged action in Mr. Hunter’s survey, he said. Mr. Kavanagh, the former state senator who is now a state representative, said he would reintroduce a bill that seeks to impose more stringent requirements on short-term rentals such as maximum occupancy and noise levels.
Republican Gov. Doug Ducey, who championed the current Arizona law, said in an emailed statement, “We have no intention of changing course.”
Temporary neighbor
In Arlington, Texas, a group of stay-at-home moms last year pushed the city to introduce zoning laws to more strictly regulate short-term rentals. One of the women, Jessica Black, had formed a Facebook group called Mothers Against Short-Term Rentals.
Shortly after, the group took aim at a Texas bill which, like Arizona’s law, would take away local authority over those rentals.
The group scoured local news for the names of residents who had complained short-term rentals around the state. Then, they called.
“We said, ‘Hey, you’re having this issue? We’re having this issue. What can we do to work together?’ ” Ms. Black said.
She and others took trips to the state legislature in Austin, lobbying lawmakers face-to-face. They dipped into savings to pay for hotels and other expenses. Ms. Black cornered legislators to talk about various dangers, including the potential use of short-term rentals in human trafficking and other crimes.
The bill never made it to a vote.
Ms. Black, a 46-year-old mother of two girls, said the last straw was when the short-term rental property next door turned into a temporary movie set, creating a hubbub of generators and bright lights.
“We had a revolving door of strangers,” she said of her neighborhood’s opposition to the proliferation of short-term rentals. “As mothers, we lost the sense of safety and community. We would feel anxious when our kids were out riding their bike, or catching the bus, or walking the dogs.”
Ernie Bach, of Largo, Fla., said he leaned on groups in Germany and the U.K. for advice when Florida was considering a bill this year that also would have stripped cities of their authority over short-term rentals. Mr. Bach’s Silver Haired Legislature lobbying group brought citizens to testify in opposition.
“They have got the same problems,” he said. “We compare notes about what’s going on and who has been successful to what degree and how.” The Florida bill expired in the pandemic. Mr. Bach said his group was ready to take action if it resurfaces.
In Barnstable, Mass., population 45,000, Heather Hunt persuaded her husband to run for town council late last year so he could help stall a proposal that would have limited city authority over short-term rentals.
Ms. Hunt, a 54-year-old lawyer, founded a group called Barnstable Watch last year after she saw a syringe outside the short-term rental next door. “I said, ‘Surely I’m not the only one,’ ” she recalled. “I need to find people who are experiencing this.”
She found local properties for rent on Airbnb and other sites, and she wrote letters to the next-door neighbors, suggesting they band together.
The group waged a months-long battle against the proposal, pooling money to run newspaper advertisements and radio commercials about the experience of Arizonans. On a Sunday last fall, she turned to her husband, David Bogan, and said, “You need to run for council. We can either stand on the sidelines or throw our hat into the ring.” He agreed, and he won.
In November, the proposal was dropped after months of pressure from Ms. Hunt’s group in public and by her husband on the town council.
Neighbors are “dedicating serious hours a day, spending out-of-pocket to solve an issue that should’ve never been theirs to solve,” said Mr. Lieberman, the Arizona lawmaker. “That’s supposed to be our job.”
In the dozen years since it was founded, Airbnb Inc. has moved into hundreds of U.S. cities, transforming many of them into vacation-rental meccas.
In response, residents across the country have ratcheted up grass-roots efforts aimed at keeping authority over short-term rentals in the hands of towns and cities.
Airbnb shares are scheduled to begin trading on Thursday on the Nasdaq Stock Market after an initial public offering. The company priced its shares at $68 apiece on Wednesday, according to people familiar with the matter, setting a valuation of about $47 billion based on a fully diluted share count and including proceeds of the offering. Airbnb has warned prospective investors that managing its success in the face of angry neighbors and unfavorable local laws is among its biggest challenges in the U.S. and around the world.
Many Silicon Valley tech giants have battled regulators in Washington, D.C., and state capitals. Airbnb’s fights are breaking out city by city. For the company, the opposition could yield slower-than-expected growth and higher costs if local authorities impose restrictions on short-term rentals.
The Covid-19 pandemic, which looked disastrous for the company in the spring, has instead fueled an explosion in rental demand among people flocking to popular destinations within driving distance. In August, half of Airbnb’s global bookings were for stays within 300 miles of the guest’s location, the company said.
The popularity of short-term vacation rentals has generated local campaigns and generated publicity about the downside of living next door to a shifting cast of visitors. Denver, Boston and Santa Monica, Calif., are among the U.S. cities that have tightened rules on the operation of short-term rentals.
An Airbnb spokesman said the company “cannot comment for the record because we are in a quiet period” ahead of the IPO. The company has said in the past that its business allows homeowners to earn a livelihood and that its listings bring tax revenue to cities and states.
In Arizona, the one state that passed a law removing the authority of cities to police short-term rentals, at least two state lawmakers are aiming for bills next year to counter the 2016 law. The law was sold to the legislature as “an old couple making a few extra bucks by renting their spare bedroom,” said John Kavanagh, the only state senator to vote against it at the time. “That’s not what ended up happening.”
Investors poured into affluent neighborhoods like Paradise Valley, Ariz., a suburb of Phoenix, where they snapped up townhouses to rent on Airbnb, Mayor Jerry Bien-Willner said. Data compiled for the city show that 94% of short-term rental listings in Paradise Valley are stand-alone houses without owners living on-site.
Tensions grew, Mr. Bien-Willner said, after a flurry of complaints from neighbors over noisy house parties and crime at the short-term rentals. Cities can do little because they have no say over leasing the properties, he said.
Some Arizonans complained their homes declined in value because no one but investors wanted to buy a house next to a short-term rental, according to Mr. Bien-Willner. “You don’t know your neighbors anymore,” he said.
In Sedona, Ariz., a tourist hot spot popular for its striking sandstone canyons, high demand for Airbnb rentals worsened the shortage of affordable housing and “demolished the long-term rental market,” Mayor Sandy Moriarty said. So many residents have moved out that an elementary school closed last year, she said. The city tried to impose zoning restrictions in residential neighborhoods, she said, but was blocked by the state law.
On Wednesday, more than two dozen Arizona mayors wrote to Airbnb Chief Executive Brian Chesky, outlining the detrimental impact of short-term rentals on their neighborhoods, including large parties during the pandemic. The company banned house parties at its listings late last year, and it took legal action this year against at least four guests for violating those terms.
In Scottsdale, Ariz., Marjorie Pennock woke up to the sound of gunfire in mid-October, she said. A group of partygoers at the short-term rental property next door drew weapons and fired. One person was shot in the arm. Five homes were struck in the crossfire, according to a police report, and more than 100 shell casings were recovered outside Ms. Pennock’s home.
“I’m in my bedroom thinking I’m going to die,” she said.
Block party
Bill Hunter, a retired banker campaigning to change the Arizona law, learned about the shooting while he was in Scottsdale distributing yard signs that said “Homes Not Hotels.” He arrived in Ms. Pennock’s neighborhood the next day and found dozens of residents gathered on the street, eager to speak to him. “All of a sudden, I’m giving a seminar about what they could do to pressure their local representatives to change the law,” he said.
Mr. Hunter, a 65-year-old resident of Paradise Valley, began his work last year, he said, after the house next door turned into a party house rental. When he learned that Arizona had taken away the power of cities to regulate such properties, he started a group called Neighbors Not Nightmares, hoping to organize other aggrieved homeowners.
He said he rolled out a website built by a consultant he found on Craigslist and who worked out of an RV. Mr. Hunter encouraged people to email state lawmakers, and hundreds shared their stories.
“The emails I’ve received are heartbreaking,” said state Sen. Kate Brophy McGee. She was moved by stories told by agitated neighbors and introduced a bill this year to return some power to cities. The bill sailed through the state Senate in February, but expired in the House when the legislature paused in the pandemic. Ms. McGee, a Republican, lost her re-election bid last month.
Mr. Hunter’s group prepared a survey for all 154 candidates running for the Arizona legislature in the November election and pressed them in emails and phone calls to declare a position on policing short-term rentals. He posted their answers, as well as the names of those who didn’t respond, urging people to vote for those who promised legislative action. State Rep. Aaron Lieberman, a Democrat, was one who promised to throw his weight behind the group’s cause. He was re-elected last month and said he would try to repeal the state law next year. “There’s strength in numbers, and people keep sharing horror stories again and again and again,” he said. “It’s the issue that I’ve heard the most from people about.”
Mr. Lieberman, who earlier this year made an unsuccessful attempt to repeal the 2016 law, expects to draw support from lawmakers who pledged action in Mr. Hunter’s survey, he said. Mr. Kavanagh, the former state senator who is now a state representative, said he would reintroduce a bill that seeks to impose more stringent requirements on short-term rentals such as maximum occupancy and noise levels.
Republican Gov. Doug Ducey, who championed the current Arizona law, said in an emailed statement, “We have no intention of changing course.”
Temporary neighbor
In Arlington, Texas, a group of stay-at-home moms last year pushed the city to introduce zoning laws to more strictly regulate short-term rentals. One of the women, Jessica Black, had formed a Facebook group called Mothers Against Short-Term Rentals.
Shortly after, the group took aim at a Texas bill which, like Arizona’s law, would take away local authority over those rentals.
The group scoured local news for the names of residents who had complained short-term rentals around the state. Then, they called.
“We said, ‘Hey, you’re having this issue? We’re having this issue. What can we do to work together?’ ” Ms. Black said.
She and others took trips to the state legislature in Austin, lobbying lawmakers face-to-face. They dipped into savings to pay for hotels and other expenses. Ms. Black cornered legislators to talk about various dangers, including the potential use of short-term rentals in human trafficking and other crimes.
The bill never made it to a vote.
Ms. Black, a 46-year-old mother of two girls, said the last straw was when the short-term rental property next door turned into a temporary movie set, creating a hubbub of generators and bright lights.
“We had a revolving door of strangers,” she said of her neighborhood’s opposition to the proliferation of short-term rentals. “As mothers, we lost the sense of safety and community. We would feel anxious when our kids were out riding their bike, or catching the bus, or walking the dogs.”
Ernie Bach, of Largo, Fla., said he leaned on groups in Germany and the U.K. for advice when Florida was considering a bill this year that also would have stripped cities of their authority over short-term rentals. Mr. Bach’s Silver Haired Legislature lobbying group brought citizens to testify in opposition.
“They have got the same problems,” he said. “We compare notes about what’s going on and who has been successful to what degree and how.” The Florida bill expired in the pandemic. Mr. Bach said his group was ready to take action if it resurfaces.
In Barnstable, Mass., population 45,000, Heather Hunt persuaded her husband to run for town council late last year so he could help stall a proposal that would have limited city authority over short-term rentals.
Ms. Hunt, a 54-year-old lawyer, founded a group called Barnstable Watch last year after she saw a syringe outside the short-term rental next door. “I said, ‘Surely I’m not the only one,’ ” she recalled. “I need to find people who are experiencing this.”
She found local properties for rent on Airbnb and other sites, and she wrote letters to the next-door neighbors, suggesting they band together.
The group waged a months-long battle against the proposal, pooling money to run newspaper advertisements and radio commercials about the experience of Arizonans. On a Sunday last fall, she turned to her husband, David Bogan, and said, “You need to run for council. We can either stand on the sidelines or throw our hat into the ring.” He agreed, and he won.
In November, the proposal was dropped after months of pressure from Ms. Hunt’s group in public and by her husband on the town council.
Neighbors are “dedicating serious hours a day, spending out-of-pocket to solve an issue that should’ve never been theirs to solve,” said Mr. Lieberman, the Arizona lawmaker. “That’s supposed to be our job.”
Airbnb Fights Its ‘Party House Problem’
Noise. Damages. Safety questions. Airbnb is racing to address the risks posed by partying guests before it goes public.
New York Times
https://www.nytimes.com/2020/10/27/business/airbnb-party-house-coronavirus.html?smid=em-share
Noise. Damages. Safety questions. Airbnb is racing to address the risks posed by partying guests before it goes public.
New York Times
https://www.nytimes.com/2020/10/27/business/airbnb-party-house-coronavirus.html?smid=em-share
The luxury cabin in Incline Village, Nev., just north of Lake Tahoe, has a hot tub, a sauna, a pool table, a fire pit, two patios and a backyard full of towering pine trees. It sleeps 14, according to its listing on Airbnb. And it has been a nightmare for Sara Schmitz, a retiree who lives next door.
The home is frequently the site of raucous bachelor parties and weddings, Ms. Schmitz said. Recently, a crew of college students stayed there, blowing weed smoke into her house. When she asked them to stop, they threw trash in her yard.
“It’s a constant party house,” said Ms. Schmitz, 57. She has called the police a dozen times about the property and joined the Incline Village STR Advisory Group, an organization that fights short-term rentals — for which the largest source is Airbnb.
What Ms. Schmitz encountered is part of the “party house problem” facing Airbnb. That’s when guests who book its properties hold parties in them, something that appears to be happening more frequently in the coronavirus pandemic, as people look for places to socialize with bars closed and hotels appearing risky. In July, police officers in New Jersey broke up a party at an Airbnb with more than 700 people in attendance.
Sara Schmitz at her home in Incline Village, Nev. “It’s a constant party house,” she said of the Airbnb rental next door.
The party houses pose a risk to Airbnb’s reputation and business as the $18 billion company prepares to go public this year. In many neighborhoods, people have been turned off by the rentals’ noise and annoyances. Complaints about party houses across sites like Airbnb and Vrbo soared 250 percent between July and September compared with last year, according to Host Compliance, which provides local neighborhood hotlines across the United States and Canada.
Worse, the party houses raise safety issues. Between March and October, at least 27 shootings were connected to Airbnb rentals in the United States and Canada, according to a tally of local news reports by Jessica Black, an activist fighting short-term rentals. The tally was verified by The New York Times.
Over the years, Airbnb employees have pushed executives to do more to address the party houses, said six people who worked on safety issues at the company. But they said the start-up had largely put a priority on growth until a deadly shooting last Halloween at an Airbnb made national headlines. Five people died.
The issues are now fueling Airbnb’s many fights with communities over how to regulate home rentals. Groups like the one in Incline Village are becoming more vocal and are sharing their strategies for fighting short-term rentals. Cities including Chicago, San Diego, Ann Arbor, Mich., and Atlanta have recently proposed or enacted stricter rules or bans on the properties.
“Airbnb’s long-run viability and profitability is going to have a big question mark” if the party issue is not resolved, said Karen Xie, a professor at the University of Denver who researches the short-term rental industry.
Lake Tahoe in Incline Village, where short-term rentals have sparked a campaign against them.
Christopher Nulty, an Airbnb spokesman, said the company was combating the party houses with “robust new policies, products and technologies to stop large gatherings, which far exceeds measures taken by others.” He said Airbnb had made changes even though the moves “knowingly impacted growth and nights booked.”
Airbnb began rolling out new rules against party houses around the time that it was preparing to file to go public. In July, it said guests under the age of 25 with fewer than three positive reviews on the site could not book entire homes near where they live. In August, the month it filed for a public listing, it placed a 16-person cap on reservations, banned parties and sued guests who were responsible for the events.
Last month, it started testing technology to block suspicious last-minute bookings and suspended some party houses from its listings. And ahead of Halloween — the one-year anniversary of the shooting at the Airbnb in Orinda, Calif. — it banned one-night rentals on Halloween.
Some said the measures were too little, too late.
“The damage has really been done to the neighborhoods during that time,” said Austin Mao, an Airbnb host in Las Vegas. He said the costs of repairing damage from parties at his properties, which host as many as 2,000 guests a month, had been tremendous. Neighbors complained so much about parties over the summer that he converted a third of the listings to long-term rentals.
In 2016, Christopher Thorpe, an entrepreneur in Lincoln, Mass., said he faced $28,000 in damage after an Airbnb guest threw an 80-person rave, complete with ticket sales, at his home. Mr. Thorpe later learned that other hosts had reported that guest for parties, but Airbnb had not removed the renter from the platform.
“Airbnb put up as many roadblocks as they could to avoid dealing with this,” Mr. Thorpe said.
Airbnb has long grappled with safety issues, said the six former employees who worked on trust and safety and who asked to remain anonymous.
Two of them said they had asked Airbnb to sue people who frequently threw parties at the rentals for the damage, but executives feared that would draw attention to the events. Several also said they had pushed to limit or remove the “Instant Book” option, which confirms bookings immediately without requiring approval from the host. But the feature, which was used by almost 70 percent of listings in 2019, improved convenience and made Airbnb more competitive with hotels. So Airbnb did nothing, they said.
Mr. Nulty said Airbnb promoted Instant Book so hosts could not discriminate against guests by denying some of them a booking, adding that hosts can turn off the feature. He denied that executives had been urged to sue party promoters and said its legal team did not reject proposals because of concerns over public attention.
Joe and Edie Farrell outside their Incline Village home. “Airbnb is basically helping people set up a hotel in our neighborhood,” Mr. Farrell said.
In Incline Village, which has a population of around 9,000, the Airbnb party houses have increasingly grated on residents. Shortly after Joe and Edie Farrell, retired physical therapists, moved permanently into their vacation home there last year, the house next door became an Airbnb. Blasting music and drunk people created “10 days of anxiety” around July Fourth, said Ms. Farrell, 70.
“Airbnb is basically helping people set up a hotel in our neighborhood,” Mr. Farrell, 68, said. “Now you have to worry about your safety and peace and quiet.”
Then came last year’s fatal shooting at the Airbnb in Orinda. A Vice news article that outlined Airbnb’s fraudulent listings and fake host accounts also went viral, raising questions about trust.
In response, Airbnb said it would ban parties thrown by professional organizers that were promoted on social media. It also said it would verify that all seven million of its listings were as advertised by Dec. 15, 2020, and announced a global hotline for neighbors to report parties. And it promoted its head of policy, Margaret Richardson, to be vice president of trust. (She has since left.)
But when the pandemic hit in March, executives scrambled to keep the company afloat. Verification stalled. (Airbnb said 40 percent of listings had “begun the verification process.”) The neighborhood hotline, which was supposed to be available globally, is accessible only in the United States, Canada and the Netherlands.
In May, Airbnb cut a quarter of its staff, including a large chunk of its safety team. In an internal Q. and A. with Brian Chesky, Airbnb’s chief executive, employees protested the layoffs. One said the decision would leave guests without support for weeks, according to a list of the questions viewed by The Times. Another wrote that he would feel unsafe staying in an Airbnb or renting his home on the site because of the lack of a safety plan.
In the first week after the layoffs, safety cases piled up, former employees said. Airbnb asked many of those it had laid off to return temporarily to work through the cases; many of those workers have remained, current and former employees said. In Dublin, the layoff plans were rescinded altogether, they said. Airbnb said the team that manages user safety is now the size it was before layoffs.
In August, Airbnb introduced more changes to improve safety. It sued a guest who held a party in Sacramento that resulted in three people getting shot. It then sued another guest who hosted a party in Cincinnati, where a property manager was shot in the back while trying to break up the event.
On Oct. 19, the company sued Davante Bell, a party promoter in Los Angeles who threw parties at Airbnb mansions. “Airbnb has suffered and continues to suffer reputational harm and potential liability to third parties as a direct result of Bell’s actions,” the company’s lawsuit said.
Mr. Bell, who declined to comment on Airbnb’s suit, has been selling tickets to a new party called “Nightmare on King Bell Street Halloween Mansion Party” on social media. This week, he continued posting fliers for the event. When asked if the party would be held at an Airbnb, Mr. Bell did not answer.
The home is frequently the site of raucous bachelor parties and weddings, Ms. Schmitz said. Recently, a crew of college students stayed there, blowing weed smoke into her house. When she asked them to stop, they threw trash in her yard.
“It’s a constant party house,” said Ms. Schmitz, 57. She has called the police a dozen times about the property and joined the Incline Village STR Advisory Group, an organization that fights short-term rentals — for which the largest source is Airbnb.
What Ms. Schmitz encountered is part of the “party house problem” facing Airbnb. That’s when guests who book its properties hold parties in them, something that appears to be happening more frequently in the coronavirus pandemic, as people look for places to socialize with bars closed and hotels appearing risky. In July, police officers in New Jersey broke up a party at an Airbnb with more than 700 people in attendance.
Sara Schmitz at her home in Incline Village, Nev. “It’s a constant party house,” she said of the Airbnb rental next door.
The party houses pose a risk to Airbnb’s reputation and business as the $18 billion company prepares to go public this year. In many neighborhoods, people have been turned off by the rentals’ noise and annoyances. Complaints about party houses across sites like Airbnb and Vrbo soared 250 percent between July and September compared with last year, according to Host Compliance, which provides local neighborhood hotlines across the United States and Canada.
Worse, the party houses raise safety issues. Between March and October, at least 27 shootings were connected to Airbnb rentals in the United States and Canada, according to a tally of local news reports by Jessica Black, an activist fighting short-term rentals. The tally was verified by The New York Times.
Over the years, Airbnb employees have pushed executives to do more to address the party houses, said six people who worked on safety issues at the company. But they said the start-up had largely put a priority on growth until a deadly shooting last Halloween at an Airbnb made national headlines. Five people died.
The issues are now fueling Airbnb’s many fights with communities over how to regulate home rentals. Groups like the one in Incline Village are becoming more vocal and are sharing their strategies for fighting short-term rentals. Cities including Chicago, San Diego, Ann Arbor, Mich., and Atlanta have recently proposed or enacted stricter rules or bans on the properties.
“Airbnb’s long-run viability and profitability is going to have a big question mark” if the party issue is not resolved, said Karen Xie, a professor at the University of Denver who researches the short-term rental industry.
Lake Tahoe in Incline Village, where short-term rentals have sparked a campaign against them.
Christopher Nulty, an Airbnb spokesman, said the company was combating the party houses with “robust new policies, products and technologies to stop large gatherings, which far exceeds measures taken by others.” He said Airbnb had made changes even though the moves “knowingly impacted growth and nights booked.”
Airbnb began rolling out new rules against party houses around the time that it was preparing to file to go public. In July, it said guests under the age of 25 with fewer than three positive reviews on the site could not book entire homes near where they live. In August, the month it filed for a public listing, it placed a 16-person cap on reservations, banned parties and sued guests who were responsible for the events.
Last month, it started testing technology to block suspicious last-minute bookings and suspended some party houses from its listings. And ahead of Halloween — the one-year anniversary of the shooting at the Airbnb in Orinda, Calif. — it banned one-night rentals on Halloween.
Some said the measures were too little, too late.
“The damage has really been done to the neighborhoods during that time,” said Austin Mao, an Airbnb host in Las Vegas. He said the costs of repairing damage from parties at his properties, which host as many as 2,000 guests a month, had been tremendous. Neighbors complained so much about parties over the summer that he converted a third of the listings to long-term rentals.
In 2016, Christopher Thorpe, an entrepreneur in Lincoln, Mass., said he faced $28,000 in damage after an Airbnb guest threw an 80-person rave, complete with ticket sales, at his home. Mr. Thorpe later learned that other hosts had reported that guest for parties, but Airbnb had not removed the renter from the platform.
“Airbnb put up as many roadblocks as they could to avoid dealing with this,” Mr. Thorpe said.
Airbnb has long grappled with safety issues, said the six former employees who worked on trust and safety and who asked to remain anonymous.
Two of them said they had asked Airbnb to sue people who frequently threw parties at the rentals for the damage, but executives feared that would draw attention to the events. Several also said they had pushed to limit or remove the “Instant Book” option, which confirms bookings immediately without requiring approval from the host. But the feature, which was used by almost 70 percent of listings in 2019, improved convenience and made Airbnb more competitive with hotels. So Airbnb did nothing, they said.
Mr. Nulty said Airbnb promoted Instant Book so hosts could not discriminate against guests by denying some of them a booking, adding that hosts can turn off the feature. He denied that executives had been urged to sue party promoters and said its legal team did not reject proposals because of concerns over public attention.
Joe and Edie Farrell outside their Incline Village home. “Airbnb is basically helping people set up a hotel in our neighborhood,” Mr. Farrell said.
In Incline Village, which has a population of around 9,000, the Airbnb party houses have increasingly grated on residents. Shortly after Joe and Edie Farrell, retired physical therapists, moved permanently into their vacation home there last year, the house next door became an Airbnb. Blasting music and drunk people created “10 days of anxiety” around July Fourth, said Ms. Farrell, 70.
“Airbnb is basically helping people set up a hotel in our neighborhood,” Mr. Farrell, 68, said. “Now you have to worry about your safety and peace and quiet.”
Then came last year’s fatal shooting at the Airbnb in Orinda. A Vice news article that outlined Airbnb’s fraudulent listings and fake host accounts also went viral, raising questions about trust.
In response, Airbnb said it would ban parties thrown by professional organizers that were promoted on social media. It also said it would verify that all seven million of its listings were as advertised by Dec. 15, 2020, and announced a global hotline for neighbors to report parties. And it promoted its head of policy, Margaret Richardson, to be vice president of trust. (She has since left.)
But when the pandemic hit in March, executives scrambled to keep the company afloat. Verification stalled. (Airbnb said 40 percent of listings had “begun the verification process.”) The neighborhood hotline, which was supposed to be available globally, is accessible only in the United States, Canada and the Netherlands.
In May, Airbnb cut a quarter of its staff, including a large chunk of its safety team. In an internal Q. and A. with Brian Chesky, Airbnb’s chief executive, employees protested the layoffs. One said the decision would leave guests without support for weeks, according to a list of the questions viewed by The Times. Another wrote that he would feel unsafe staying in an Airbnb or renting his home on the site because of the lack of a safety plan.
In the first week after the layoffs, safety cases piled up, former employees said. Airbnb asked many of those it had laid off to return temporarily to work through the cases; many of those workers have remained, current and former employees said. In Dublin, the layoff plans were rescinded altogether, they said. Airbnb said the team that manages user safety is now the size it was before layoffs.
In August, Airbnb introduced more changes to improve safety. It sued a guest who held a party in Sacramento that resulted in three people getting shot. It then sued another guest who hosted a party in Cincinnati, where a property manager was shot in the back while trying to break up the event.
On Oct. 19, the company sued Davante Bell, a party promoter in Los Angeles who threw parties at Airbnb mansions. “Airbnb has suffered and continues to suffer reputational harm and potential liability to third parties as a direct result of Bell’s actions,” the company’s lawsuit said.
Mr. Bell, who declined to comment on Airbnb’s suit, has been selling tickets to a new party called “Nightmare on King Bell Street Halloween Mansion Party” on social media. This week, he continued posting fliers for the event. When asked if the party would be held at an Airbnb, Mr. Bell did not answer.