The world of travel has been recently revolutionized by Airbnb – an innovative company that allows travelers to have a more home-roots experience when venturing to new cities.
Available in over 191+ counties, the site gives home owners an opportunity to capitalize on empty rooms or vacant apartments. It describes itself as “a social website that connects people who have space to share with those who are looking for a place to stay”.
While Airbnb certainly makes travel more convenient, more affordable and let’s face it – more fun, a few cities are concerned with their casual approach to the travel industry and argue that it is contributing to the current housing crisis.
Should we, as homeowners/renters in one of the most populated cities in the country be concerned with the growth of Airbnb?
To start, some lawmakers are anti-Airbnb because it allows people to make money without having to pay hotel taxes. The company charges guest a 9-12% service fee on every reservation made, as well as charging hosts a 3% fee. Worth over $10 billion dollars, the company’s current valuation exceeds that of many global hotel chain. It has lessened our reliance on traditional hotels and motels – which ultimately means that the hospitality industry is losing money. In fact, HVS estimated that hotels lose approximately $450 million in direct revenues per year to AirBnb.
Beyond this financial impact, the popularity of Airbnb could ultimately be contributing to the rising cost of living in your city. It is more profitable for home owners to offer short-term rentals (think $150 a night) rather than long-term monthly rental agreements – think $150/night vs $800/month!
According to research done by Vice, this issue is aggravated in cities where vacancy rates are low and rental rates are historically high. Bennett Baumer, an organizer with the Housing Conservation Coordinators, shared, “Airbnb is exacerbating the affordability crisis and the general anyone-looking-for-an-apartment crisis by taking almost 20,000 apartments out of the market.” While this powerful statement was made in reference to New York City, Los Angeles no doubt fits the “low vacancy rates, historically high rent” description and it is likely that this issue translates over to the West coast.
Further, renters who list who list their apartments or homes on the site may very well be in breach of their rental agreements. People who use their spare rooms to make quick cash on Airbnb without approval from their land-lord or the home owner, may find themselves evicted or in court! While Airbnb encourages its users to be “responsible hosts” and check renting laws and lease agreements prior to listing their spaces, the company does not take responsibilities for any legal issues that may arise.
On a more personal note, there is always the risk of bringing loud, irresponsible and reckless groups into your home/neighborhood. While you have the opportunity to screen and ultimately decline guests, the site does not require background checks. There have been instances of neighbors or fellow tenants reporting properties that are illegally renting out their homes.
In family friendly Redondo Beach, it is easy to see why your neighbors may be wary of you listing your home on Airbnb. While we see both the pros & cons of Airbnb, we urge you to be cautious if you are considering listing your home on the site. If you currently in a lease, be sure to double check your rental agreement and run the idea by your landlord. If you are a homeowner, we advise being open with your neighbors and selective in your guest selection.
Do you have an Airbnb experience you would like to share with us? We would love to hear more 🙂