Airbnb Is a Risky Neighbor

http://www.bloombergview.com/articles/2014-06-20/airbnb-is-a-risky-neighbor

by lmg643 • 12 years ago

73 87 12 years ago

mantraxC2• 12 years ago

If you want to avoid the moral hazard of tenants subletting their apartment, and the owners being screwed, you need a mechanism for the contract (which disallows subletting) to be enforced.

So how do you effectively enforce that? Should the owner have cameras in the hallway? Should the tenants be subject to random checks? some balance has to be found to keep both sides happy.

The other question is why are tenants going through the trouble and risks of subletting. And this guy knows why:

http://moodyeyeview.files.wordpress.com/2011/08/toodamnhigh....

You might notice Airbnb has virtually no presence (relatively) in countries where the rent is lower, especially in relation to people's income.

sliverstorm• 12 years ago

It may not matter if the owners catch their tenants subletting anyway. In some places it's nigh-impossible to evict, for any reason.

uptown2• 12 years ago

The rent is too damn high. But it's not being helped by Airbnb. When "spare" housing is converted to short-term rentals then rental units remain near capacity, and rents continue to rise. The traditional scenario is that apartments remained empty, thus increasing the supply of available housing, and putting downward pressure on rent prices.

wpietri4• 12 years ago

Yeah, I suspect cities are going to start banning for-profit full-time subletting, especially in cities with rent control. It'd be a shame if more reasonable use cases get swept up in that.

rcthompson2• 12 years ago

No, Airbnb isn't helping rent prices, but it is helping people who sublet their apartments via Airbnb pay their rent more easily while making it harder for everyone else. Another negative externality.

mantraxC2• 12 years ago

I get your point, but housing isn't like ice-cream. You can't just decide you don't want ice-cream because it's too expensive.

The alternative is living on the street, which brings with itself inability to maintain employment and so on down the spiral. It's literally better not to eat for a few days, than it is to find yourself on the street with all your stuff. A point of no return.

So the incentive to seek "tricks" is high (whether it be Airbnb, or living with 5-6 other people in a small apartment), and demand is dictated purely by how many people are there needing to rent, versus how much money they have.

dominotw5• 12 years ago

simple. Like someone suggested here. Have an opt-out for landlords.

jakozaur• 12 years ago

Yeah, it's happen again and again.

I love AirBnB as a customer, used it a few times and have a great experience with it... but I would be worried if somebody rent apartment next to me without they presence at all...

... on the other hand how would you enforce non-subletting policies? Likely only some high-end biometrics access could do that, but that won't happen any time soon in vast majority of the places.

maxerickson2• 12 years ago

Document the violations and terminate the lease.

If other tenants are being disturbed, they won't object to a camera at the building access door.

rahimnathwani2• 12 years ago

Terminate which lease? Let's say I rent an apartment from landlord A. We are cool. Now tenant B rents the apartment next door from landlord C, and promptly lists it on Airbnb.

I am not a party to the contract between B and C, so can't do anything to terminate that lease. My landlord A hasn't done anything to breach our contract, so I have no grounds to terminate that. So I'm SOL.

jdhopeunique3• 12 years ago

One option might be for AirBnB to have an opt-out policy for landlords.

patmcguire• 12 years ago

They can't, because then everyone would opt out. Professional landlords keep up on what's going on in their business as much as any other group of people - you don't think they have sites and mailing lists? - and renting isn't a business you can be careless about, because bad things really do happen to property.

So AirBnB pretty much has to do the wink-nudge thing, where they officially forbid 90% of transactions, but let them happen anyway.

JohnTHaller• 12 years ago

They already have via their leases which prohibit subletting.

notlisted9• 12 years ago

Having lived in a BK building where at least 25% (4 out of 16) of the tenants rented out their apt. on AirBnB with regular frequency, I can't wait for this to be addressed once and for all...

Strangers with keys to the front door, easily copied because our landlord didn't invest in secure locks. Strangers coming home at 3am on a weekday (Mo-We), inebriated, slamming the doors waking us up and the kid as well, quite often with more raucous strangers in tow for a night cap. Strangers picked up in a bar of our 'gentrifying' hood, who left at 5am after knocking back more beers and/or some boots.

I paid rent, for the joy of living in a virtual dorm, they collected monies while affecting my quality of life and safety. The lease specifically forbade short-term subletting. We lived in that place for 13 years, 10 without problems, but the last 3 at times unbearable because of these "good friends from Europe".

When we moved, our friendly neighbors across the hall, avowed AirBnB hosts (they came clean), suggested that we renew our lease one more year (rent stabilized) and put our apt. on AirBnB "as a source of income". They would happily "manage" our AirBnB listing (key transfer, cleaning) for a piece of the pie. We declined, we liked our other neighbors too much...

With reports from Berlin, San Francisco and other cities showcasing how AirBnB has affected availability of apt's and is one of the main drivers of rising rents ( eg see http://www.sfchronicle.com/business/item/airbnb-san-francisc... and http://www.csmonitor.com/World/Europe/2013/1230/Berlin-squee... ) it's about time something is done about this.

Let's stop calling them social sharing companies, and just rename them "loopholes", who make money by assisting others in breaking the law, violating the terms of their lease, and enabling tax evasion whilst denying any type of responsibility for "sharing" my quality of life to pieces...

Glad regulation is in the pipeline. Private home owners who reside in their own houses, share away, but keep AirBnB out of apt. buildings.

Edit: words/grammar

esbonsa• 12 years ago

use something like http://www.unikey.com/ and then you can easily revoke/disable keys

rahimnathwani2• 12 years ago

It's not his apartment or building. He cannot force the building owner to replace the main entrance's lock.

wavefunction• 12 years ago

whooosh right over the head

dominotw5• 12 years ago

I bought a condo near a sporting/concert center and I live though hell during summer because my neighbors rent out their condos to concert going college kids on AirBnB.

I've written to my alderman, complained to the city with listings on AirBnb. Nothing. No response.

It would be a dream come true for me someone prosecutes AirBnb and puts the founders behind bars.

wyager9• 12 years ago

It would be a dream come true for me someone prosecutes AirBnb and puts the founders behind bars.

What have they done wrong? Made it easier for people to share living space? God forbid people make tools that make travel easier and more accessible.

7Figures2Commas• 12 years ago

If you have an HOA, you should review the bylaws, etc. If the rentals you describe appear to be in violation, it might be worth speaking with an attorney about the possibility of a selective enforcement action.

wyager9• 12 years ago

The lease specifically forbade short-term subletting.

Then it sounds like your lease agreement isn't being enforced. That's a landlord problem, not a legal problem.

Glad regulation is in the pipeline.

Why? So that all of us who use AirBnB have no options left? I know I can't afford travel without it.

How about instead of trying to ham-fist legal solutions to minor problems, you just get your landlord to enforce the lease agreement that already bans AirBnB renting?

thenmar• 12 years ago

How do you go about getting a landlord to enforce a lease agreement? As long as the landlord is getting paid on time and the place isn't destroyed, he probably doesn't care. This seems like a textbook example of an externality that's only solvable by regulation, or by more strictly enforcing any city laws that require landlords to forbid short term sublets.

notlisted9• 12 years ago

I always wondered why, but https://news.ycombinator.com/item?id=7924005 below gives a good reason why (summary: tenants who rent out via AirBnB can afford bigger rent increases).

It's a combination landlord (lease) and legal problem. In NYC short term leases are explicitly not allowed. Also note, as others have below, that it is very difficult to evict someone in New York.

Glad because just 4 apts. in the building ruined it for the rest of us. I don't care about your travel plans, I care about my quality of life.

Nothing ham-fisted about it and I definitely wouldn't call the mediam rent increases in BK a minor problem - http://gothamist.com/2014/04/04/brooklyn_rents_cant_stop_won...

pistle• 12 years ago

Maybe people don't care if you can't afford the price of something. It's not everyone else's responsibility to ensure your entitlement to travel on your limited budget. Stay home and make something of it instead of vomiting in everyone else's hallways. We pay the rents and mortgages for these places and AirBnb customers come and crap on it.

And why should it have to be incumbent upon everyone else to enforce rules? What the f$*&? The more I hear of you the more I agree that regulations can't come fast or hard enough.

There are people who have actually lived and invest in these places. Now, there's a whole "disruptive" community thinking because they have a phone with an app, they should be able to help transfer the value of someone else's life and homes into the pockets of AirBnb's founders? Let me catch your tears in this jar so I can savor them.

wpietri4• 12 years ago

It's a landlord problem if it happens in one place. If it's happening all over the place and is facilitated by a single entity or a small number of entities, it certainly is a problem that will end up getting solved by legislation.

If AirBnB were serious about legal compliance, there are plenty of tools they could make. Any developer here could suggest several, I'm sure. But they're intentionally sailing very close to the wind. They've done well by it so far, but I could imagine this strategy biting them in the ass if they push it too far. A couple of spectacular failures yielding some dramatically written articles would be enough to generate a lot of public outrage.

tzs3• 12 years ago

You have no options without AirBnB? What about:

http://www.priceline.com/hotels/

http://www.expedia.com/Hotels

http://www.travelocity.com/Hotels

http://www.hipmunk.com/hotels-search

http://www.kayak.com/hotels

http://www.trivago.com/?

http://www.orbitz.com/hotels/

http://www.bookingbuddy.com/hotel.php

http://bookit.com/hotels/?tripType=hotel

greenyoda• 12 years ago

In NYC, at least, it's also a legal problem. Short-term rentals (even of property that you own) are illegal under city law. The law would consider the hosts to be:

- Running illegal hotels in buildings that are not zoned for commercial use.

- Running a business without a valid business permit.

- Failing to pay the hotel tax and other business taxes.

- Violating fire regulations that govern hotels and other commercial property.

seanmcdirmid2• 12 years ago

Having lived in a BK building where at least 25% (4 out of 16) of the tenants rented out their apt. on AirBnB with regular frequency, I can't wait for this to be addressed once and for all...

I didn't think AirBnB was a thing in Bangkok at all!?

sheetjs2• 12 years ago

BK also refers to brooklyn

aianus5• 12 years ago

If your rent is $40 a day and AirBnb guests are paying $80 a day don't they deserve to be there more than you? I don't buy the "I was there first" or "but zoning" arguments.

Besides, I've lived in private room in a hostel in a developing country for the last three months and haven't experienced any of these problems. I find it hard to believe the average apartment building with AirBnB units would be worse.

humbledrone• 12 years ago

The lease specifically forbade short-term subletting [...]
[...] don't they deserve to be there more than you?

Nope. In fact, they don't deserve to be there at all if they're violating the contract the tenants signed with the owner.

mcphilip• 12 years ago

I got to experience the opposite side of the equation. I rented a 6 bedroom house in Austin to house my family during my wedding. There was an ominous note left on the fridge where the owner explained that the neighbors are hostile and will call the cops after 10pm if they hear any noise at all. Later in the day when my mom was out playing in the backyard with the grandkids, she got yelled at by the neighbors with warnings of calling the cops later that night.

Honestly I just wanted everything to go smoothly since I was getting married, but man, I felt sleazy housing my family in a hostile environment. And you know what, I can't really blame the neighbors at all. This was my first and last experience with Airbnb. It just felt dirty to be apart of such neighborhood hostilitly.

zaroth• 12 years ago

Interesting perspective. I've done AirBnB but only ever in single-family homes in jurisdictions where it's not illegal.

But if I rented a unit and it turned out that the unit was actually not legal to rent, and even more-so if the neighbors are hostile, why PAY for it? Sounds like a great basis for contesting the charge.

mwsherman2• 12 years ago

Airbnb will naturally drive up rents in places where it’s being used. If a tenant has the capacity to pay (e.g.) $2000 for an apartment, but now can get an additional (e.g.) $300 a month, the tenant’s capacity to pay is now $2300.

A savvy landlord or condo association would want to capture this. Because it’s new, it’s seen as a disturbance. A little bit of thinking would reveal that there is now $XXX new money coming in the door (due to better utilization of the property).

It’s in the owners’ ultimate interest to figure out how to either a) accommodate this explicitly and safely, and capture some of the new revenue or b) prohibit it because the tenants prefer it, but know that the price of a “non-shared” building will carry a premium.

One way a condo association might adopt the idea is to point out that Airbnb’ers $$ might be used for building upgrades or to reduce condo fees.

notlisted9• 12 years ago

Good point. I assumed the rents were driven up because fewer apts became available (tenants renting out their old place, or even landlords not signing up new tenants and taking the AirBnB revenue stream without the headaches or leases or evictions) but as you outline, the extra income may allow landlords to drive up the rents without much of a risk of turnover...

logn3• 12 years ago

An HOA board which explicitly allows Airbnb listings, and especially one that profits from it, is in for a world of pain. You cannot get financing for a mortgage in a short-term rental community. That will discourage new buyers who can't get financing and drive down re-sale values.

mwsherman2• 12 years ago

Why would a lender be troubled by this? The property, due to a new source of income, is worth more. Seems like more income = less risk from the lender’s point of view.

wyager9• 12 years ago

I think it takes a really fucked up worldview to say "I don't like noisy visitors, so we should just ban AirBnB outright."

Really? Is that your first response whenever you don't like something? Just make it illegal!

How about you ask for enforcement/introduction of non-subleasing policies for your building? There is absolutely no good reason to screw over everyone else in the process.

dominotw5• 12 years ago

you keep repeating the same thing over and over. How do you suggest landlords enforce the policy?

wyager9• 12 years ago

How do you suggest landlords enforce the policy?

Evicting tenants who don't follow it? That's how lease agreements work.

notlisted9• 12 years ago

It's not just the noise, it's the security as well.

Safety is a real concern. The area still has muggings, drug dealing and even a few murders. Knowing who belongs in your building and who has a key is an important aspect of living in BK.

pbreit• 12 years ago

The problem is that not only is AirBnB not trying to do anything about it, they are actually continuing to push ahead further.

Having the building you live in double as a downscale hotel is absolutely craptastic. From all your comments, you seem not to understand this rather simple point.

aerolite• 12 years ago

So everyone suddenly hates AirBnB, huh?

notlisted9• 12 years ago

Nope. Not everyone. I wish. The nasty side-effects of AirBnB in metro areas however are becoming increasingly clear to non-users/non-hosts... and journalists.

chatmasta• 12 years ago

So what does Airbnb do when a property owner demands Airbnb delist his property from its site? Clearly an owner has more right than his tenant to determine where his property is rented, especially if their lease agreement prohibits short term rentals.

If Airbnb received a legal notice from a property owner demanding it delist his property, it seems like they would have to comply. Otherwise they might face a pretty simple case of negligence for listing an owner's property for rent without his approval. The only evidence the owner needs to supply is a signed copy of the lease and public records of ownership.

So why aren't landlords doing this? I think the issue is either they don't care, or there's no easy way to do it. Perhaps somebody should set up a service that facilitates this process by reducing it to uploading a copy of the lease agreement and ownership records, then sending a request to Airbnb. If enough property owners use a service like that, it could gain some significant attention.

notlisted9• 12 years ago

I did not get this either, until I read https://news.ycombinator.com/item?id=7924005

Part of the story here is that the extra income the hosts generate allows them to raise the rents or at the very least reduce turnover.

Airbnb Is a Risky Neighbor

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