Love it, loathe it or indifferent, Airbnb is a game changer. For every action there is a reaction, and as hotels began kicking guests out before breakfast after only letting them into their rooms near supper time the world began to look elsewhere. Airbnb was that great, friendly find connecting travellers with locals in ways that could fit any travel style from ultra luxe to super budget. Like all great concepts, mankind took things too far, and now the reaction to the Airbnb reaction is upon us. Cities are each taking different stances on the issue, and the “correct way” is a really interesting topic.
Let’s start with the basic Airbnb or short term rental policies of five major cities around the world, which are either in effect or going into effect within the year…
Airbnb listers must register their property(s), pay a reasonable set up fee and limit Airbnb or “sharing economy” activity to 180 nights per year maximum. Previously, the rules were impossible and this new initiative was designed to help make legal home sharing possible.
Madrid’s Airbnb laws, at least for now, are extremely simple: you register. Once registered that’s the only requirement. You can have as many listings as you wish and rent them 365 days a year, just as long as they are registered and you are prepared to pay any taxes. Rumours are swirling that this is about to change.
Starting July 1st, 2019 only primary residence may be rented, and only for a maximum of 120 days a year. The Airbnb lister must reside in the home at least half the year. In addition, standardized safety features must be installed and accommodation taxes must be paid to the city, just like hotels.
All short term “lettings” or “rentals” under 28 days are illegal in Hong Kong without a license and therefore virtually all Airbnb’s are illegal. The city has enforced these policies with vigour, increasing fines from $250,000HKD to $500,000HKD in addition to lengthened prison terms up to three years. Search warrants are also granted for random “kick down the door” style raids.
Miami requires that each listing obtain a city tax and registration number, which must be shown on the listing. Furthermore, listings are confined to locations where zoning allows for such things. South Beach, for example is a permitted zone. The city has been cracking down on suspected illegal Airbnb listings, displacing guests in the middle of the night.
Pros For Airbnb
Airbnb has created more flexibility in accommodations while driving prices mostly down. A family of four no longer needs two hotel rooms to travel. Instead, they can find a well priced two bedroom apartment for roughly the same price as one hotel room, or maybe even less.
The platform has allowed entrepreneurs to turn an investment property into a booming side business and has also created entire businesses based around the services of an Airbnb. There are businesses purely based on the cleaning of listings, opening of doors or maintaining of guest records.
Having access to places “everywhere” in a city, rather than just in the areas a city has designated as the place they want tourists to be has allowed people to enjoy more authentic, rewarding experiences in neighbourhoods that many tourists may otherwise have not discovered.
Cons For Airbnb
Having one lousy neighbour is bad enough, but having noisy, drunk people wander in and out daily can completely change a building or neighbourhood. Airbnb’s bring in “unknowns” and when people are on vacation, they tend to enjoy themselves. That has impacts in every way.
Airbnb listers can make more money in two weeks than a standard apartment rental costs. This has lead to locals being driven out of their homes as Airbnb entrepreneurs flood the market with inflated rent offers. An Airbnb entrepreneur will pay more to rent, given that they will turn a profit off if it in just two weeks. It’s killed off once flourishing neighborhoods, because no one actually lives there.
An apartment building full of Airbnb’s run by a single commercial entity is a hotel in everything but name. If you are going to allow these businesses to run unchecked, just the way a hotel would, but without the safety requirements, accessibility requirements and taxation requirements hotels do face, then there’s no reason hotels should play by the rules either.
I’ve spent quite a bit of time thinking about this and can’t pretend to have all the answers, but I have come to a potential conclusion which I believe could be fair to all. Remember: the idea is that Airbnb is part of the sharing economy, and therefore not a hotel, or traditional property investment…
- Two Airbnb listings maximum per family globally, one of which must be permanent residence. To receive certification from city, landlord or property owner must sign agreement as well.
- Rentals limited to 365 days per year for one listing, or a total of 445 potential nights for those Airbnb hosts listing two properties. One Airbnb could be listed for 365 days a year. If a second property is listed, a 80 day extension will be allowed for 445 total between the two listings, divided as you wish.
- Must pay one off $500 listing fee with city, and comply with all overnight tourist taxes, in line with mandatory fees charges to hotels.
- Must file annual “no fee” audit of records to prove compliance, otherwise listing is lost.
Basically, if a family has worked hard and earned themselves an investment property or can help to create more income by successfully running a second place, let them. There’s no need to cap it. Los Angeles was perhaps too strict here.
Allowing for an additional 80 day Airbnb extension on a second property creates a reasonable way for someone to make money on both places if they’re away more than two months of the year, as many business travellers are. At the same time, limiting it to 80 days would help to prevent fraud from people who list two places but don’t actually live in one. It seems fair enough.