Rent Your Place on Airbnb? The Landlord Wants a Cut
wsj.com
wsj.com
Let's be honest; marketing the place on Airbnb and dealing with renters aren't a huge value-add. The majority of the value is generated by the ownership of the building, and the building owners want to capture as much of that as they can.
Airbnb is a slippery slope: it mixes the hotel markets (which tend to be much higher priced) with the rental markets. This brings the prices of rental markets up, and many renters may feel the only way they can afford their apartment is if they rent it out. It's also how you get $1 million studio apartments in Manhattan - the monthly payment on a $1 million loan isn't bad when you consider you can rent it out at $350/night for half the year (hotels in the same area are ~$500/night) and still turn a profit.
I'm not really sure whether these issues outweigh the points you made or not, but if this happens, it probably makes legal action against bad actors using AirBnB much easier.
The logistics are difficult, but maybe it could work like this:
- Airbnb stores landlord info for each rental (where applicable)
- A certain percentage is set aside for the other tenants in that building and paid directly to the landlord of that building
- The landlord then distributes the amount they received from Airbnb to tenants via deductions in their monthly rent
As much as I love Airbnb, I still feel like i'm doing something sketchy when I use it and i've had some awkward run-ins with landlords because it's clear the person doesn't have permission to sublet. So I would definitely like to see the service become more legitimate and move out of the shadows.
It is illegal in NYC to rent an apartment for less than 30 days and is enforced by many landlords. If Airbnb is trying to convince landlords to look the other way, I find that disgusting.
I don't want my building to be a hotel. I don't want random people in my building. The idea that landlords can rationalize steeply raising rents with the expectation that tenants will find the money by letting someone crash on their couch for a few days every month to make it up is dehumanizing.
Will this be exploited by the 20% of affordable housing units in these buildings paying well below market rates?
Here's the thing... it's not your building.
I totally understand it being wrong to AirBnB a rental without the landlord's approval. But if the landlord is ok with it... they own the building, that's their call. If you don't like it, find a different apartment.
> If you don't like it, find a different apartment.
That's exactly what parent commenter said he would do, in opening sentence..No, actually it's not. It's against the law to use a residential building as a short term occupancy hotel.
If you don't like it, find a different language. :P
Perhaps an example will put you at ease:
"Oh could you help me take these to my flat? I know they're heavy, but don't worry, my building has a lift!"
Substitute apartment and elevator if so inclined.
In high density areas, local governments have codified the value of "home" into law. NYC has housing laws that offer protection for people across the spectrum. From rent stabilization and eviction laws for the homes of those in lower income brackets, to Co-op and condo laws that protect the home of some of the wealthiest residents.
Actually, it's very likely that a bank owns the building with a 30 year mortgage.
Tenants have rights. Landlords are not, and should not be, allowed to do whatever they want with their building.
---
The assertion that, for residential rental, anything that is not a free market is "dehumanizing" to "everyone who came after you" is not self-evident.
Consider this: when someone gets an apartment, they put down roots. Their utility curve is biased towards them wanting to stay where they are. They arguably should not be asked to swap the location of where they live as easily as a day trader would sell stocks. Think about commuting for a person already making ends meet with multiple jobs; think about the disruption to a child's schooling. Rent control is designed to account for this, to dampen the dynamic system of the housing market as an attempt for greater overall utility.
Whether it is optimal, whether it is overapplied - since utility can't easily be quantified, that's something that everyone will have a different opinion on. Quoth the Dude, "That's just, like, your opinion, man." [0] You're certainly entitled to call someone else's opinion "dehumanizing," and they are equally entitled to downvote you in return.
Well unfortunately intentions are not consequences. Rent control has very visibly benefits (grandma gets to keep her apartment at close to the same rent as she has been paying for decades) but distorts the market in very subtle but destructive ways (landlords not paying for any maintenance and harassment and dehumanization of tenants paying below market rates).
There are transaction costs to everything. You think a landlord wants to go through the process of finding a new tenant and moving him in, ideally with no difference between your move out day and the new tenants move in date? Also, the protections you receive are priced into the cost. Would you take a slightly lower rent if the landlord could kick you out at any time?
> Putting down roots
This is very sentimental but that argument can be used to justify many policies that are meant to favor the recipients of a current system. In America there has been a huge transfer of wealth from the young and relatively poor to the old and relatively wealthy.
> Whether it is optimal, whether it is overapplied - since utility can't easily be quantified, that's something that everyone will have a different opinion on.
Yes, that's why we have a market and people are willing to trade based on their own utility (e.g. I signed a two year lease at a higher net effective rent)
When your area of comfort is being disrupted = Disgusting(Airbnb).
When somebody else's area of comfort is being disrupted = Innovation(Uber).
Airbnb is trying to turn buildings zoned for residential living into commercial hotels, which is illegal.
Tenants who have landlord's permission to rent on Airbnb != All people who rent on Airbnb have landlord's permission.
And yes disruption is always when it happens to others, when it happens to you, it looks 'unfair'.
> I don't want random people in my building
Well, why not ? when wealthy white people "exploit" legal loopholes and government subsidies for personal financial gain, it's called capitalism.
It has happened in Queens already and I believe the tenants have been evicted. Such a foolish choice considering the money they would have saved over the years.
What do "white people" have to do with anything here?
Essentially, I'd still pay my rent like normal and then have them manage the Airbnb while we're out of town and they'd get a cut of the proceeds. I'd need to check the lease to see if I'm allowed to do it anyway, I assume not, but it seems like a reasonable way for all three parties to win:
They collect more rent, I cover some travel expenses, ad someone gets to stay in a cute place close to downtown Santa Barbara.
Leases can be amended - it's not a law.
My wife and I rent two vacation homes on AirBnb and other websites. We started with a one night minimum in the off-season and then quickly change to 3 nights. This essentially means we book fewer off-season weekend rentals.
Here's why we did that: It takes 1 night to trash a house. So do you want someone to pay you $200 to trash your house or $600 to trash your house?
You're also playing Russian roulette where every new guest is a trigger pull. The fewer trigger pulls, the less likely you are to take a bullet.
We'd rather a higher vacancy rate with an overall fewer number of guests. In the end this means we might reduce our revenue by 10% to have 50% fewer guests.
Your landlord would have to decide that couple extra thousand dollars a year would be worth hosting 20 random visitors. If that's how the numbers break down the risk isn't worth the reward IMO.
In my case I believe our city recently (or might soon) change the rules of short-term rentals to only allow for rentals longer that 30 days.
What I was specifically thinking of doing was taking my family to another country for a month and renting the place out for the duration to help cover the expenses. Hopefully the longer term rental would weed out many of the types of people that might trash a place.
Stress + time spent managing the debacle @ my bill rate + lost income during repairs + items insurance fails to cover, etc...
We've really only had one group trash a house and it was really just a big mess with no real physical damage. Took about $800 of extra cleaning and was handled by the deposit.
As I mentioned in another comment, I was thinking of taking my family to another country for a month and renting the place out for that entire month to a single renter to help reduce some of the costs.
It might be better to just do a "site:" search, prepending "site:" to the url. In this case, the search is:
site:www.wsj.com/articles/big-landlords-airbnb-discuss-partnerships-1450200473
This brings up 1 result, which is the paywalled article.
I
Also doesn't get around the usual "hotel" regulations in many cities that forbid short term rentals, also for a long list of reasons.
I mention it because the headline reads a bit more like "greedy landlords decide they want your money from letting on airbnb!"
But its funny how this free market thing works though, the hypocrisy is the same people who scream innovation and disruption when it comes to Uber are crying disgust and malpractice when it comes to Airbnb.
You can't have these selectively applied to what you like and dislike. If disrupting taxi unions and license issuers was fair, so is this.
Zilch. Nada. Absolutely nothing. They can accept it, or find somewhere else.
It's great that a landlord is saying, fine, you can sublease the place short term. But we have to regulate that, you have to pay us to do so, and if you can't hold up your end we have the right to put an end to it.
This is the only reasonable way I can see to solve the problem of short term rentals.
Not only do boilerplate leases include "quiet enjoyment" clauses that contractually bind landlords into ensuring that tenants aren't disruptive, but state laws also include implied covenants of quiet enjoyment, meaning that there are large areas where it doesn't even matter if you edit that out of your lease.
A landlord that fails to ensure quiet enjoyment can be sued by their tenants.
Even with the laws and implied covenants, it takes a significant amount of time to go through eviction proceedings in many states. In California it can take months (unless you stop paying rent altogether, in which case there's a fast-track procedure).
Yes, a tenant can sue their landlord as well. Again, however, that can take months and significant expense.
When considering these things, we must take into account the actual reality of how rights are exercised, not merely what rights exist in law.
In just about every other situation, there is a list of 16 reasons you can evict someone, and all of them can lead to a lengthy expensive trial, in which at the end the landlord has spent a significant amount of money and probably regrets every doing anything with their life.
Is that particularly worse than tenants having to deal with Section 8 tenants in their midst?
Your own comment some time ago: https://news.ycombinator.com/item?id=10623102
Why do you think that short-term middle-to-upper-class renters are preferable neighbours to medium-to-long-term lower-class renters? I saw your comment elsethread about ease of punishment, which makes some sense, but in my experience small landlords simply don't care.
Living above a pair of end-stage alcoholics who importuned people on the sidewalk and called the ambulance for health care every few weeks was far, far more annoying than the flophouse a few doors down. Then there was the poor family with 9 people in a two-bedroom unit, with a couple of teenagers who vandalised and may have been thieves as well (not that upper-class teenagers aren't hoodlums, of course: many of them are too). Then there was the prostitute with the shady clientele.
You appear to be opposed to short-term renters, but appear to applaud Section 8. Why the difference?
Neither are short-term hotel guests, but tptacek wants to reduce those while welcoming Section 8, which is logically inconsistent.
They are both groups of people who some folks wish to exclude as neighbours, and others wish to include as neighbours, in both cases presumably based on desirability or undesirability qua neighbours.
I've explained my reasoning (which is that I think short-term renters are more likely to be of a similar social class as their neighbours than are those who qualify for housing vouchers, and that I view local class homogeneity as a social good); it's hardly illogical, although you are of course free to disagree with it.
It's the landlord who offers (within the limits of local law) the terms of the lease. I've never seen a lease agreement that allows subleasing without at least right of refusal on reasonable grounds by the landlord. The landlord is within its rights prohibit the tenant from entering into any kind of sub lease entirely. It could (again, within the limits of local law) evict the tenant for even advertising a possible sublease without its written permission.
But no, the landlord is very graciously offering to actively support subleasing via AirBnB. If the landlord executes properly, that's a win for the tenant, a win for the landlord, and a win for the neighbors.
It's certainly true that if these things are done irresponsibly then bad things happen. And bad things do often happen, I'll give you that. But it's not necessarily true. How it's managed is what determines whether the outcome is good or bad and for whom.
When short term renters well behaved, then the neighbors aren't harmed at all. If any lease holder has the ability to sublet easily with support of the landlord then that is something of value. A landlord that gets involved like this is going to create an environment with incentives for good short term tenants.
I'd rather lease from a company that allows me to do that and also supports me in doing so. I'd rather lease from a company that actively manages subleases than one that sticks its head in the sand that pretends that isn't happening all the time.
Short term subleases are here to stay. Trying to stop them is like trying to stop piracy or illicit drug use. It's just not going to happen.
edit: also: To call what happens on airbnb an "unregulated hotel" is profoundly misguided. Have you ever lived for a significant period of time out of airbnb??
I'm not sure why I'm meant to care that there are people that use Airbnb for long-term living arrangements. The modal Airbnb renter does not do that.
What this landlord is doing is the equivalent of saying, "People are going to do drugs. OK. You can sell drugs and you can consume drugs, I'm not going to stop you. I only demand to test their purity first. And if you hurt unrelated parties I'm going to hold the guilty party accountable."
Now everyone has something to gain by playing by the rules. Sure, they have to give up something, but they get more than they give if they're honest. Once someone in a legal position of authority can get the parties to agree to play by the rules, that authority can do a lot to reduce, if not completely mitigate, the negative side effects.
Of course, you may not like that trade-off. You may, like me, have kids in those bedrooms, and enjoy having other families with kids around you who form lifelong friendships with your kids. You may not really want to see an investor buy the 3 bedroom apartment next to you and pay his or her own mortgage and profit by bringing a never ending stream of strangers into the house or apartment next door - even if these strangers are very well behaved.
In short, you may wish to trade your right to turn your house into a hotel in exchange for a legally enforced expectation that your neighbors won't do this either. Or, alternatively, you may be ok with it in a more limited way, that perhaps you don't really mind people doing this occasionally, when they are on vacation, say for a limited number of days a year.
If this is the case, then you would gain none of the benefits but experience all the negatives of disruption.
As you can probably tell from the way I set this up, I feel it is immensely reasonable to zone certain sections of a city as residential with strong restrictions on short term rentals, as a way of protecting residents from the externalities of short term rentals, as well as a way of protecting long term housing stock.