Short-term rentals disrupting SF housing market(sfgate.com)
sfgate.com
Short-term rentals disrupting SF housing market
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/06/10/MNJ11OROGJ.DTL
11 comments
and airbnb really doesnt care about this or they would take further steps to ensure that their rentors have the authority to rent the place. they say they do, but they don't. without renters i think airbnb would be in trouble..how many homeowners really want strangers coming in and out of their home regularly?
"how many homeowners really want strangers coming in and out of their home regularly?"
Everyone who runs a Bed and Breakfast business from their home? (In the UK this sector is huge).
Everyone who runs a Bed and Breakfast business from their home? (In the UK this sector is huge).
"Everyone who runs a Bed and Breakfast business from their home? (In the UK this sector is huge)."
"everyone" and "huge" - can you put some #s or %s behind this statement? is it 5% of the homeowner population?
"everyone" and "huge" - can you put some #s or %s behind this statement? is it 5% of the homeowner population?
Don't know overall, according to Wikipedia here in Edinburgh there are apparently "several hundred" - which seems quite a lot for a city of less than half a million people. Having said that, Edinburgh does get quite a few visitors (~1 million overseas visitors a year).
There's a category of homeowners like that: vacation home owners who DO explocitly want people coming in and out and paying.
I like Airbnb, and while I think they should own up to their users real tax liability (if you're listing your place for the majority of the year, you're a hotel), I don't want to see them smote by regulations.
But that doesn't mean I'm shrugging my shoulders and saying "eh, that's what disruption looks like!" when renters in apartment buildings convert their spaces into mini-hotels. That's abusive. Fortunately, it's also unlawful, and there's a clear chain of responsibility to resolve it.
Cotenants in buildings experiencing Airbnb abuse shouldn't bother talking to Airbnb or their neighbors. They should report the conversion to their landlord, and then have a notice-and-cure drafted. In most circumstances, landlords probably cannot allow their buildings to be partially converted into hotels under the terms of their existing tenants leases.
But that doesn't mean I'm shrugging my shoulders and saying "eh, that's what disruption looks like!" when renters in apartment buildings convert their spaces into mini-hotels. That's abusive. Fortunately, it's also unlawful, and there's a clear chain of responsibility to resolve it.
Cotenants in buildings experiencing Airbnb abuse shouldn't bother talking to Airbnb or their neighbors. They should report the conversion to their landlord, and then have a notice-and-cure drafted. In most circumstances, landlords probably cannot allow their buildings to be partially converted into hotels under the terms of their existing tenants leases.
we are talking about homeowners who own a 2nd home and in many cases, have bought it expecting to rent it out at least part of the time. they went into that purchase with the mindset of sharing with strangers. i would be very interested in using airbnb if i owned a vacation home.
This practice is part of the problem. It is bidding up the cost of apartments for locals who need a place to live.
In general, the people who have 2nd vacation homes buy single family houses or condominium apartments. They don't rent, because that doesn't get them ownership of anything. The 2nd home is generally a more speculative investment than anything else.
So no, they're not really pushing up the costs of rental apartments, because they're not in that market segment at all.
So no, they're not really pushing up the costs of rental apartments, because they're not in that market segment at all.
Meh. It's the software engineers making $150,000 each bidding up the cost of apartments more than it is J Random Tourist-Supplemented Income dude.
I have no idea if AirBnB does that to apartment rents but I do know that some formerly sleepy coastal towns became too expensive (in recent decades) for locals to buy a house due to second homes being bought there by wealthy non-residents. I have no idea how to fix such a problem but I know it is real.
I am my sister in-law both do this. It's a great way to purchase a vacation home and off-set the cost. Just make sure you financially plan for the worst and hope for the best :)
Question: Why does Airbnb need to deal with this at all?
I mean, if these apartments were being advertised on craigslist or local classifieds would you think they need to deal with it?
I mean, if these apartments were being advertised on craigslist or local classifieds would you think they need to deal with it?
The classifieds don't provide comprehensive listings of short-term vacation rentals.
But I'm not saying Airbnb "needs" to deal with it. I'm saying they "should" decline listings from people who don't own their property absent some documentation of consent from the landlord of that property.
But I'm not saying Airbnb "needs" to deal with it. I'm saying they "should" decline listings from people who don't own their property absent some documentation of consent from the landlord of that property.
I'm not going to pretend I understand all the issues here but would you really want to be half pregnant here? I mean their users are violating all sorts of little laws in thousands of jurisdictions (all the cities/towns/counties/provinces/etc.) all over the world. In some cases this is bad form in some cases that's how BNBs work. I have a sort of feeling that it's better to take the "not my job" approach here rather than doing a half-assed job.
Yeah, the "half pregnant" point here is probably really good; Airbnb is probably in a terrible bind here.
Houses can be rented and apartments can be owned. Think of all the different local laws that might apply to someone that owns a condo, rents an apartment, owns a house, owns a townhome or rents any of these. Hell, even a HOA might have something to say about it. Then again you might rent from a person who doesn't care if you sub-rent out.
Having AirBNB try to determine if every single renter/homeowner has the rights would be a nightmare.
Having AirBNB try to determine if every single renter/homeowner has the rights would be a nightmare.
I understand that there's some ambiguity to the term, but for most people in the US, the word for an apartment that is owned by occupants who do not own the rest of the building is "condominium". Also, you should note that most condominiums have even stricter rules for usage of the building; these are legally binding agreements that attach to the mortgage of the condo.
It is very, very easy for Airbnb to attempt to determine whether a lister owns their property. Obviously, they aren't foolproof. But for starters they could just have a checkbox, and a big red warning if you check it.
It is very, very easy for Airbnb to attempt to determine whether a lister owns their property. Obviously, they aren't foolproof. But for starters they could just have a checkbox, and a big red warning if you check it.
very, very easy...attempt to determine
The hosts do agree to the terms of service, but I suppose if they want to make it less agreeable to hosts they could scare them away with a big red warning when signing up.
The problem, I suspect, is that people who own their homes are much harder for Airbnb to work with than people who are renting. Airbnb grew quickly by removing friction and making it very easy for people to list space and by providing the bare minimum support to people who list places. That was "good enough" for renters because they don't own the homes and don't care as much. Homeowners might expect a level of service that would tie up a lot of resources and hurt scaling.
Not all landlords have leases, credit checks, or references. What about those cases?
You just knew someone was going to come in here pointing out that they knew of a landlord that drafted their lease on the back of a used Kleenex. Well. I stand corrected, then.
What? I didn't say that, at all. I'm just saying there are a ton of cases where landlords don't require leases to be signed. Credit checks and references are less common than leases. I live in Chicago and in a big city like this one, there are many, many different renting situations (not just "Kleenex" ones) and not all of them contractually come in conflict with a renter having someone pay to live in part of an apartment.
I live in Chicago and rented in Chicago for many years and I never saw a lease that hadn't been drafted by a lawyer. Most leases are boilerplate --- let alone rentals without leases. If you're renting an apartment without a lease, something shady is going on.
But look, in the meantime, can we just implicitly narrow the conversation down to the normal case of "renters with actual leases"? This is a stupid tangent. Obviously there are landlords who don't give a shit if people in their buildings convert apartments to hotels, just as there are buildings where the other tenants don't care either.
But look, in the meantime, can we just implicitly narrow the conversation down to the normal case of "renters with actual leases"? This is a stupid tangent. Obviously there are landlords who don't give a shit if people in their buildings convert apartments to hotels, just as there are buildings where the other tenants don't care either.
A rental without a lease? That sounds like a friend renting our a spare bedroom to another friend. I would propose that without a lease, it ceases to be a rental, because neither side has any obligation to the other.
Even slumlords require signed leases.
Even slumlords require signed leases.
I, like the others in this thread, can only speak to Chicago laws. Here, a verbal lease is a perfectly valid lease, subject to the laws of the city and state (we usually call it "month-to-month"). I wouldn't say it's exactly common, but it's not exactly uncommon either. My last apartment was rented month-to-month for 4+ years (and was a nice apartment with a nice landlord).
In the cases I'm most familiar with, the apartment starts with a lease, and rather than renew the lease specifically, just shifts to a verbal lease, provided the landlord and tenant trust each other. (Were I renting an apartment to someone else, there isn't a chance in hell I would do it without a lease, though.)
In the cases I'm most familiar with, the apartment starts with a lease, and rather than renew the lease specifically, just shifts to a verbal lease, provided the landlord and tenant trust each other. (Were I renting an apartment to someone else, there isn't a chance in hell I would do it without a lease, though.)
I really have to object to the idea that verbal leases are common in Chicago. I think if you set out to find an apartment, an attached house, a carriage house, or a freestanding house today, you'd have a very hard time finding one that didn't have a written lease attached to it.
But obviously this is a tangent. To whatever extent verbal leases are common or not, it's impossible to argue that formal written leases are uncommon. They are the norm.
But obviously this is a tangent. To whatever extent verbal leases are common or not, it's impossible to argue that formal written leases are uncommon. They are the norm.
Really, there are landlords that don't require leases? That seems very strange to me. I guess that's why there's always new Judge Judy cases...
All of this is true, it is unethical and illegal. But it is also true, that in cities like San Francisco and NYC (especially SF-Co) rents are absurdly high, and landlords care nothing other than making the most of it. My previous two landlords forced me to pay only cash for rent, and I know many other landlords do the same, and cheat on taxes.
In one place I went, they wanted 450$ for "application fee and credit check", and it was not even a luxury apartment, wasn't in Manhattan or any high rent place.
I am not defending any party here - just pointing out, noone in this mess is totally ethical.
In one place I went, they wanted 450$ for "application fee and credit check", and it was not even a luxury apartment, wasn't in Manhattan or any high rent place.
I am not defending any party here - just pointing out, noone in this mess is totally ethical.
"All of this is true, it is unethical and illegal. But it is also true, that in cities like San Francisco and NYC (especially SF-Co) rents are absurdly high, and landlords care nothing other than making the most of it. My previous two landlords forced me to pay only cash for rent, and I know many other landlords do the same, and cheat on taxes."
Way to go on painting every single landlord as greedy bastards who care about nothing other than squeezing every single penny out of the tenant based on your own personal limited experience. Don't be so quick to generalize that all landlords are slumlords. For every story of landlord abuse, there is one for tenants who take advantage of the system as well.
Way to go on painting every single landlord as greedy bastards who care about nothing other than squeezing every single penny out of the tenant based on your own personal limited experience. Don't be so quick to generalize that all landlords are slumlords. For every story of landlord abuse, there is one for tenants who take advantage of the system as well.
> For every story of landlord abuse, there is one for tenants who take advantage of the system as well.
And there are occasional stories of landlords being awesome, too - ours let us use her wifi while we waited for our net to be hooked up, for instance.
And there are occasional stories of landlords being awesome, too - ours let us use her wifi while we waited for our net to be hooked up, for instance.
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What about the legitimate tenants in the building?
Usually the places that want $450ish, it's a single check that they'll hold onto and, iff they decide to give you the apartment, they'll actually take it (otherwise they return the check). That way they're guaranteed that you're a serious applicant (or they get a consolation sum if you're not). It's sort of a like a security deposit on your application.
I don't care for it myself.
I don't care for it myself.
California has limits on what landlords can charge for "application fees". I think it's around $40.
Why does Airbnb allow renters to list their apartments on Airbnb at all?
What is the incentive for Airbnb to check? Even assuming most listers do have the legal right to do so, checking in a way that isn't easily gamed would be time-consuming and expensive. It's pretty obvious why they don't do that; it would put them out of business.
Was this a rhetorical question meant to make the point "Airbnb is bad"?
What is the incentive for Airbnb to check? Even assuming most listers do have the legal right to do so, checking in a way that isn't easily gamed would be time-consuming and expensive. It's pretty obvious why they don't do that; it would put them out of business.
Was this a rhetorical question meant to make the point "Airbnb is bad"?
I said I liked Airbnb, so you can safely assume that no point I raise is a cryptic barb at them.
I think Airbnb has no incentive right now to try to ensure that listings are legitimate or authorized, and that that's a problem.
I think Airbnb has no incentive right now to try to ensure that listings are legitimate or authorized, and that that's a problem.
I will offer a counter-example to tptacek's argument:
For 18 months (till April) I lived at 16 Waverly Avenue in Brooklyn, New York. I never signed a lease. The landlord did not care about a thing, so long as I paid the rent on the time. In that building, sub-letting apartments is common. The landlord is an older Hasidic Jewish gentleman, and his attitude toward renters is fairly common among the Jewish landlords who own a large chunk of the southern Williamsburg neighborhood. In all of these buildings, the tendency is toward laissez faire. This cuts both ways: the landlord lets you do anything, but the landlord rarely fixes anything that you need fixed. For a particular type of person (like me) this seems like a reasonable trade-off. And in such circumstances, it is perfectly reasonable for renters to find sub-letters.
For 18 months (till April) I lived at 16 Waverly Avenue in Brooklyn, New York. I never signed a lease. The landlord did not care about a thing, so long as I paid the rent on the time. In that building, sub-letting apartments is common. The landlord is an older Hasidic Jewish gentleman, and his attitude toward renters is fairly common among the Jewish landlords who own a large chunk of the southern Williamsburg neighborhood. In all of these buildings, the tendency is toward laissez faire. This cuts both ways: the landlord lets you do anything, but the landlord rarely fixes anything that you need fixed. For a particular type of person (like me) this seems like a reasonable trade-off. And in such circumstances, it is perfectly reasonable for renters to find sub-letters.
And in cases like that, I don't see much of a problem with Airbnb. I'd just add that cases like that aren't the norm.
Checking the credit of the tenant is about the landlord worrying they won't get paid. This is entirely unrelated to the tenant's relationship with a potential subletter.
The rest of your post stands, though - landlords have a valid concern for the condition of the apartment, disruption of other tenants, &c.
The rest of your post stands, though - landlords have a valid concern for the condition of the apartment, disruption of other tenants, &c.
As a - former - landlord, I can tell you that I was interested in much more than just credit scores. I wanted to have stable, long term tenants in my units. I also wanted responsible people who would tell me if there was a drip so that I could fix it before it became and issue. I found that the more time I spent vetting tenants, the less time I had to spend worrying about disputes and other issues. Tenants live in a valuable asset and everything from their cleanliness to job stability really matters.
Right, my point was that the parent had mentioned credit scores, and those in particular were irrelevant. As I said, the general point - that landlords deserve some measure of oversight in the handling of their valuable assets - absolutely stands.
"Breaking that agreement for profit is unethical."
Of course it is. There was another story about a tenant in NY getting sued after his landlord started renting out apartments.
But it is also true that your lease could allow you to sublet with an AirBnB type arrangement, so for AirBnB they probably have you sign up saying "Yes, I am allowed to do this." and leave it up to the participants to be legal and if they aren't having the landlord deal with it.
A number of stories we have yet to hear are "AirBnB got me kicked out of my apartment." or "I was arrested sued by a hotel chain." kinds of stories. I think of them as the sounds of disruption. Basically they have created a market, very much like eBay created a market, or Craigslist, and suddenly there are commerce opportunities that didn't exist before, combined with a tight economy and poof, disruption.
Of course it is. There was another story about a tenant in NY getting sued after his landlord started renting out apartments.
But it is also true that your lease could allow you to sublet with an AirBnB type arrangement, so for AirBnB they probably have you sign up saying "Yes, I am allowed to do this." and leave it up to the participants to be legal and if they aren't having the landlord deal with it.
A number of stories we have yet to hear are "AirBnB got me kicked out of my apartment." or "I was arrested sued by a hotel chain." kinds of stories. I think of them as the sounds of disruption. Basically they have created a market, very much like eBay created a market, or Craigslist, and suddenly there are commerce opportunities that didn't exist before, combined with a tight economy and poof, disruption.
Airbnb is getting me kicked out of my NYC apartment.
I just received a notice of termination from my landlord in the mail. It states that I am violating my lease by using my apartment as a hotel/bed and breakfast and that I have two weeks to move out. As evidence, they included my airbnb posting and the two reviews I received from the two people who stayed in my apartment (one for two nights and one for five nights). The apartment is not rent stabilized and I have lived here for two years, always paying my rent on time. I don't know if it is legal that they are trying to kick me out of my apartment with two weeks notice, and I don't know if they can use my airbnb posting as proof. I'm going to see a lawyer this week.
I just received a notice of termination from my landlord in the mail. It states that I am violating my lease by using my apartment as a hotel/bed and breakfast and that I have two weeks to move out. As evidence, they included my airbnb posting and the two reviews I received from the two people who stayed in my apartment (one for two nights and one for five nights). The apartment is not rent stabilized and I have lived here for two years, always paying my rent on time. I don't know if it is legal that they are trying to kick me out of my apartment with two weeks notice, and I don't know if they can use my airbnb posting as proof. I'm going to see a lawyer this week.
Two of my coworkers are in SF right now for WWDC, having flown there from Europe, and their AirBnB host was just handed an eviction notice for subletting - they have to leave immediately. So this article feels extremely ... timely.
And I'll be in SF in 2 weeks for Google IO, also staying with an AirBnB host. Not the kind of article I want to read before flying out there :-)
And I'll be in SF in 2 weeks for Google IO, also staying with an AirBnB host. Not the kind of article I want to read before flying out there :-)
Do you know how AirBnB is handling this for your coworkers? This kind of real-time fiasco is exactly the reason I've been hesitant to rent on AirBnB, so I'd be curious to see how they resolve the situation for the renters.
They headed out to see the keynote at 9am and I think they'll deal with the problem afterwards. Priorities, and all that ;-) If I find out what happened and it's relevant I'll report back.
Smart guys. :-) Would love an update if you remember.
Thanks!
Thanks!
They got in touch with AirBnB; AirBnB sent out a message to nearby hosts asking for emergency assistance, and a friendly host in the area was able to pick them up and give them a place to stay for the rest of the week. It looks like they may have to pay some fees and extra for the difference in value of the location, but overall it's better than sleeping on a bench in a park!
I had that happen to me, subletting an apartment for two months outside of AirBnB. (We were taking over an apartment of friends of friends while they were in France.) So, a few days after the house was broken into and our laptops were stolen, the landlord (from Germany) found out we were there and we had an hour to get out. Since then, I've been very wary about subletting unless everything is above board.
Having had this happen once, my only advice is to find hosts on AirBnB that own their properties. I know, not the majority for SF city, but there are quite a few home owners who are in control of their property and thus not under a tenant agreement. They might later have to pay the piper with regards to the city, but that's a much harder bone to pick.
If you want references for property owners in San Fran or near by who have their properties listed on AirBnB, drop me a line.
If you want references for property owners in San Fran or near by who have their properties listed on AirBnB, drop me a line.
I wonder if people who own their own properties could gain a modest advantage by mentioning that in the AirBnB listing. Possibly not enough AirBnB users know about or are worried about the distinction, but I'd personally be more willing to rent from someone if the description assured me that it wasn't an unauthorized-sublet type situation.
That's a great idea. Perhaps in addition to specifying what type of space is available for rent (right now the options are whole house / apartment / room, etc.), hosts should also specify what the property type is:
* Rented apartment subject to tenant agreement * Owned condominium in multi-condo building * Shared townhome * Time-shared Vacation property * Rented detached home * Owned single family property
Something like that. Not sure what the categories would be, but it would be similar to what you see when you are looking to rent or buy real estate.
Then people can decide whether or not it meets their risk profile.
* Rented apartment subject to tenant agreement * Owned condominium in multi-condo building * Shared townhome * Time-shared Vacation property * Rented detached home * Owned single family property
Something like that. Not sure what the categories would be, but it would be similar to what you see when you are looking to rent or buy real estate.
Then people can decide whether or not it meets their risk profile.
The owners might also have to pay the piper with regards to their mortgage holder unless they own the property outright - I'm pretty sure my mortgage prohibits commercial activity like this without prior approval, similar to what a lease agreement would say. (Of course, a bank is far less likely to find out than a landlord.)
Generally, the mortgage doesn't prevent this -- the insurance does. It is extremely unlikely that your mortgage would be in default because of this. However, your insurance company can refuse to pay out certain damages if they feel you have an uninsured business at home. This usually requires an insurance policy with business and/or rental coverage. I don't see anywhere in my mortgage that says I would be in default if I sublet rooms, and mine is a fairly vanilla mortgage from a large lender.
In fact, many home owners regularly rent out rooms without risk of mortgage "cancellation" or default [1]. They do however need to have suitable insurance to cover losses associated with renters and the business of renting. It's possible the insurance companies might catch onto this with AirBnB the way that landlords have and put the squeeze on homeowners and require they buy greater coverage, but there's really little chance that a mortgage holder would find the homeowner in default just because they have renters.
However, the only caveat is that FHA loans, conventional loans backed by Fannie Mae and Freddie Mac and Veteran's Administration loans as well as some State-backed loans do have a requirement that a homeowner not rent out their mortgaged property within the first year of the loan, especially if you have financed as a primary residence and/or a first-time home buyer. While the mortgage holder has the right to call the loan if this happens, in reality, they wouldn't as rental income would serve to make it more likely for you to pay your balance. [2]
And all this really applies if you are renting out your entire house and plan to live elsewhere, thereby making it a secondary residence. If the house remains your primary residence and you are subletting a room, or even the whole house while you are on vacation, then these restrictions are not in place. If you are curious, read the terms of the mortgage loan agreement. There should be something about conditions of occupancy in there.
For example, here is the Occupancy Clause in the Freddie Mac Fannie Mae Uniform Instrument:
"6. Occupancy. Borrower shall occupy, establish, and use the property as Borrower's principal residence within 60 days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating circumstances exist which are beyond Borrower's control" [6]
In addition, some home owners associations (HOA), co-op boards, and condo associations limit rentals. If you run afoul of those rules and you could face fines. So, perhaps HOAs and Condo associations might start to take notice and put the squeeze on property owners. You can also lose first-time home buyer tax credits if you rent out your entire mortgaged property and live somewhere else, but once again, that is not the typical scenario for AirBnB hosts.
A bigger issue is that many cities restrict rentals based on zoning restrictions. Plus you have other obligations when it comes to tenants and being a landlord -- I'm not sure if the duration of the rent matters, so AirBnB hosts might have to check their local zoning and Tenant's Rights statutes. [3] [4]
But all of the above is not equivalent with a tenant violating their rental lease. In this case, the tenant can face an immediate eviction for violating their lease terms. This is much more frightening than risking uncovered liability in the case of an insurance claim, fines from HOA and Condo associations, and the extremely unlikely risk of mortgage call, if you happen to have a loan that prevents such a thing.
[1] http://www.ehow.com/about_5398870_can-rent-out-home.html
[2] http://budgeting.thenest.com/happen-rent-out-mortgaged-prope...
[3] http://www.trulia.com/voices/Property_QandA/can_I_rent_rooms...
[4] http://www.trulia.com/voices/Rental_Basics/Can_I_Rent_Rooms_...
[5] http://grassrootsmotorsports.com/forum/off-topic-discussion/...
[6] http://socialize.morningstar.com/NewSocialize/forums/t/22063...
[7] http://budgeting.thenest.com/occupancy-clause-mortgage-20795...
In fact, many home owners regularly rent out rooms without risk of mortgage "cancellation" or default [1]. They do however need to have suitable insurance to cover losses associated with renters and the business of renting. It's possible the insurance companies might catch onto this with AirBnB the way that landlords have and put the squeeze on homeowners and require they buy greater coverage, but there's really little chance that a mortgage holder would find the homeowner in default just because they have renters.
However, the only caveat is that FHA loans, conventional loans backed by Fannie Mae and Freddie Mac and Veteran's Administration loans as well as some State-backed loans do have a requirement that a homeowner not rent out their mortgaged property within the first year of the loan, especially if you have financed as a primary residence and/or a first-time home buyer. While the mortgage holder has the right to call the loan if this happens, in reality, they wouldn't as rental income would serve to make it more likely for you to pay your balance. [2]
And all this really applies if you are renting out your entire house and plan to live elsewhere, thereby making it a secondary residence. If the house remains your primary residence and you are subletting a room, or even the whole house while you are on vacation, then these restrictions are not in place. If you are curious, read the terms of the mortgage loan agreement. There should be something about conditions of occupancy in there.
For example, here is the Occupancy Clause in the Freddie Mac Fannie Mae Uniform Instrument:
"6. Occupancy. Borrower shall occupy, establish, and use the property as Borrower's principal residence within 60 days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating circumstances exist which are beyond Borrower's control" [6]
In addition, some home owners associations (HOA), co-op boards, and condo associations limit rentals. If you run afoul of those rules and you could face fines. So, perhaps HOAs and Condo associations might start to take notice and put the squeeze on property owners. You can also lose first-time home buyer tax credits if you rent out your entire mortgaged property and live somewhere else, but once again, that is not the typical scenario for AirBnB hosts.
A bigger issue is that many cities restrict rentals based on zoning restrictions. Plus you have other obligations when it comes to tenants and being a landlord -- I'm not sure if the duration of the rent matters, so AirBnB hosts might have to check their local zoning and Tenant's Rights statutes. [3] [4]
But all of the above is not equivalent with a tenant violating their rental lease. In this case, the tenant can face an immediate eviction for violating their lease terms. This is much more frightening than risking uncovered liability in the case of an insurance claim, fines from HOA and Condo associations, and the extremely unlikely risk of mortgage call, if you happen to have a loan that prevents such a thing.
[1] http://www.ehow.com/about_5398870_can-rent-out-home.html
[2] http://budgeting.thenest.com/happen-rent-out-mortgaged-prope...
[3] http://www.trulia.com/voices/Property_QandA/can_I_rent_rooms...
[4] http://www.trulia.com/voices/Rental_Basics/Can_I_Rent_Rooms_...
[5] http://grassrootsmotorsports.com/forum/off-topic-discussion/...
[6] http://socialize.morningstar.com/NewSocialize/forums/t/22063...
[7] http://budgeting.thenest.com/occupancy-clause-mortgage-20795...
Indeed. Makes me happy that I was unable to book with Airbnb and had to go with a motel for my trip to SF.
For an industry so focused on disrupting ...everything. Things start to get real hard, boring and normal when met with success and exposure to the public. I admire the optimism that youth brings, allowing someone to look at a problem with a fresh perspective but all too often, the rules, laws and regulations in place that make the old way of doing business so boring and hard are actually in place for a very good reason.
Support line dealing with complaints from neighbors? How messy and resource intensive.
Meeting with local community leaders and the public to discuss the issues surrounding their service? That doesn't scale very well and is again ... messy, boring and hard.
Support line dealing with complaints from neighbors? How messy and resource intensive.
Meeting with local community leaders and the public to discuss the issues surrounding their service? That doesn't scale very well and is again ... messy, boring and hard.
"Meeting with local community leaders and the public to discuss the issues surrounding their service? That doesn't scale very well and is again ... messy, boring and hard."
In other words, a fantastic way to build barriers to entry and really lock up a new industry.
In other words, a fantastic way to build barriers to entry and really lock up a new industry.
A lot of folks don't want to acknowledge this fact but many businesses operate this way.
Most internet startups have low or no barriers to entry, so they can get an idea off the ground really quickly.
Most internet startups have low or no barriers to entry, so they can get an idea off the ground really quickly.
Also, if they are not their customers why should ABNB care?
all too often, the rules, laws and regulations in place that make the old way of doing business so boring and hard are actually in place for a very good reason.
{{citation needed}}
I can just as easily say that "the rules, laws and regulations in place that make the old way of doing business so boring and hard are actually in place because of corruption, greed, nepotism, and/or incompetence and are universally immoral, unjust and should be ignored".
And on a semi-related note... did anybody else notice how the phrase "scarce rental housing" kept cropping up in that article? Hmmm... so if there is actually demand for more long-term rental housing, and that demand is not being met, I'd bet money that the primary reason is drumroll please government interference. And I'd be strongly tempted to suspect that said interference has it's root in more corrupted relationships involving the local government and powerful special interests.
{{citation needed}}
I can just as easily say that "the rules, laws and regulations in place that make the old way of doing business so boring and hard are actually in place because of corruption, greed, nepotism, and/or incompetence and are universally immoral, unjust and should be ignored".
And on a semi-related note... did anybody else notice how the phrase "scarce rental housing" kept cropping up in that article? Hmmm... so if there is actually demand for more long-term rental housing, and that demand is not being met, I'd bet money that the primary reason is drumroll please government interference. And I'd be strongly tempted to suspect that said interference has it's root in more corrupted relationships involving the local government and powerful special interests.
The article has one other howler: "But others, encouraged by lax oversight and lucrative payoffs, use the rental sites to run ad-hoc hotels, which besides annoying neighbors, takes long-term rentals off a market that desperately needs them. . ."
San Francisco has also made it virtually impossible to build new housing units (http://www.slate.com/articles/business/moneybox/2012/05/face...). If the city needs more housing stock, there's an advanced, information-age technology called the "elevator" that can allow it to build a very large number of housing units on a very small amount of land.
San Francisco has also made it virtually impossible to build new housing units (http://www.slate.com/articles/business/moneybox/2012/05/face...). If the city needs more housing stock, there's an advanced, information-age technology called the "elevator" that can allow it to build a very large number of housing units on a very small amount of land.
This... there was also a recent NYT article about how new workers moving to SF are displacing existing residents by competing for apartment rentals. Having thousands of new residents moving into a city should be viewed as an opportunity, not a problem, especially considering the budget issues out here. SF needs to stop obstructing new construction and allow for more vertical residential housing like New York and other space-constrained cities. Even if those apartments mostly go to yuppies, it will take pressure off the overall housing market.
There's been quite a bit of new housing added in the past decade or two, hasn't there? A bunch of SoMa has undergone semi-recent conversions from industrial to residential use, and there've been several large condo buildings going up (Millennium Tower, Infinity, One Rincon Hill, Paramount), as well as hotel/condo combinations (Four Seasons, St. Regis Museum Tower).
Not really, when you think about the number of units in those buildings total (I'd guess a few thousand at most) versus the boom in Bay hiring.
I lived in NY before SF and at least subjectively, it feels like more new (incremental, not replacement) apartment units were put into say, Sixth Avenue between 23rd and 35th in the last decade than in all of San Francisco. (I'm guessing that is about ~3,000 units based on 10 blocks of ~40-story apartment buildings on two sides of the street.) SOMA lofts are nice but at only 3-4 stories high, they don't add a lot of units to the count.
SF is the second most densely populated city in the US behind NYC. If we need more housing, we need to build upwards.
I lived in NY before SF and at least subjectively, it feels like more new (incremental, not replacement) apartment units were put into say, Sixth Avenue between 23rd and 35th in the last decade than in all of San Francisco. (I'm guessing that is about ~3,000 units based on 10 blocks of ~40-story apartment buildings on two sides of the street.) SOMA lofts are nice but at only 3-4 stories high, they don't add a lot of units to the count.
SF is the second most densely populated city in the US behind NYC. If we need more housing, we need to build upwards.
See the article I linked to above: "Meanwhile, San Francisco—one of the most expensive cities in the United States—added just 418 new housing units in 2011, the fewest since 1993. What’s more, 149 existing units were removed, leading to a nearly nonexistent increase in housing supply."
So: No.
So: No.
That's a 1-year measure, which has a lot of fluctuations; something like a 10-year measure, showing a general trend, is more interesting to me.
Clicking through a few times to http://blog.sfgate.com/cityinsider/2012/05/17/after-a-lull-s..., 2011 is apparently an anomaly, and around 20-25k new units (net) were added over the past decade. In addition, 2k new units were approved in 2011. Still not too high, admittedly (a 7% increase in housing stock over a decade).
Clicking through a few times to http://blog.sfgate.com/cityinsider/2012/05/17/after-a-lull-s..., 2011 is apparently an anomaly, and around 20-25k new units (net) were added over the past decade. In addition, 2k new units were approved in 2011. Still not too high, admittedly (a 7% increase in housing stock over a decade).
During that same decade, the population of SF grew by about 60,000. 25K net new units in a city with 60K net new residents (and one of the lowest percentages of children in the country) is effectively no growth in housing stock.
Additionally, a lot of those 25K units are not market-rate housing (they're for low-income) which means that for market-rate housing, the numbers would look even worse since most of the new residents are not eligible for low-income housing.
Additionally, a lot of those 25K units are not market-rate housing (they're for low-income) which means that for market-rate housing, the numbers would look even worse since most of the new residents are not eligible for low-income housing.
"We used Airbnb happily in Europe last summer," said Thieme. "I want to extend them the benefit of the doubt that they are still evolving their business model and have had explosive growth, but they need to evolve appropriate mechanisms of monitoring and control. They should deal with zoning laws and tax laws more aggressively and realistically, or they will antagonize people."
tl;dr: "We like Airbnb when others are potentially inconvenienced to our benefit, but not the other way around."
tl;dr: "We like Airbnb when others are potentially inconvenienced to our benefit, but not the other way around."
The overwhelming majority of those inconvenienced by abusive Airbnb listings have never previously heard of the site. It's unhelpful to single out a single person who had used Airbnb as a way of warding off criticisms of Airbnb abuse.
Well, I didn't exactly single the guy out -- he was presented to me by a major news outlet as poster boy for the problem.
I also just had an issue with AirBnb. I live in a NYC cooperative apartment. We do NOT allow short-term rentals (It's actually a NYS law, minimum of 30 days). The person renting out their apartment owns it. I had spoken to AirBnb about this issue, asking them to remove the listing. They feel that this is an issue between our building and the owner of the individual apartment. However I asked AirBnb why they allow apartment rentals in a state where the law does not allow it. AirBnb stated that the lessor signs an agreement and therefore the onus is on them. However, I feel the law is implicit and AirBnb is aware of this law, then entering a contract with prior knowledge of the contract already being invalid makes AirBnb culpable. You dont enter contracts knowing the contract is already void.
It's amazing that AirBnb's entire business model pretty much hinges on this contract cop-out.
It has yet to be seen if my building decides to include AirBnb as a defendant in a lawsuit against this owner as we work to evict them.
The main reason why toursts need to stay in hotels is also as follows:
1) no background check - allows opportunity of crime. Example: pedophile renting a house or apartment near children. Or someone wanting to rob a specific apartment or group of apartments. How do you gain access to the building? $120 bucks, one night.
2) Fire Code: hotels have sprinklers and proper signage for fire in places where people are not as familiar with the surroundings. This puts the guests at risk.
3) Fire hazard: Guests are unfamiliar with the stove, or jet lagged or smoke a cigarette etc. Risk of fire is greater.
4) Noise: guests decide to have a party or blast music. Or they are just up late b/c they are on vacation.
5) Vermin: guests arent going to be as clean. B/c, hey that's what the cleaning deposit is for. This can attract vermin. Then there's the chance the guests bring bed bugs with them.
And yes, I agree it does take away units that would otherwise have been used for long-term renting, robbing the rental market of stock. NYC has about a 1% vacancy rate as it is.
AirBnb is going to see a huge litigation storm coming its way if it doesnt take more of a proactive approach where local law does not allow such rentals.
And yes, I agree it does take away units that would otherwise have been used for long-term renting, robbing the rental market of stock. NYC has about a 1% vacancy rate as it is.
AirBnb is going to see a huge litigation storm coming its way if it doesnt take more of a proactive approach where local law does not allow such rentals.
"The big surprise for us was when we tried to contact Airbnb" to complain, said Thieme, a writer and editor...
Not mentioned is if they tried to talk to their neighbour.
Not mentioned is if they tried to talk to their neighbour.
Not mentioned is if they tried to talk to their neighbour.
Was the neighbor who had control of the unit as a tenant on the lease home when the room was rented out? I don't think so. The article opens with these paragraphs:
"First came the noisy upstairs neighbors who said they were just "renting the place for a couple of nights" but refused to tone it down. Then came the people who would try to open the front door of the Castro/Duboce Triangle apartment where Barnaby Thieme and Rebecca Reagan live, saying they thought it led to the lobby.
"The couple looked online and discovered what was behind the disruptions - a unit in their building was being rented out through Airbnb, the marketplace for short-term housing in private residences."
I read that as saying that the couple who were disturbed by Airbnb visitors DID talk to those visitors, only to find out that they weren't actual tenants of the building. The person putting the unit up for short-term stays on Airbnb doesn't seem to have been available.
AFTER EDIT: A top-level comment that came in since I posted this makes an interesting point:
I admire the optimism that youth brings, allowing someone to look at a problem with a fresh perspective but all too often, the rules, laws and regulations in place that make the old way of doing business so boring and hard are actually in place for a very good reason.
This is usually how the law (and business custom) develops, by encountering actual human behavior. As Oliver Wendell Holmes, Jr. wrote, "The life of the law has not been logic; it has been experience." The Common Law (1881), p. 1.
Was the neighbor who had control of the unit as a tenant on the lease home when the room was rented out? I don't think so. The article opens with these paragraphs:
"First came the noisy upstairs neighbors who said they were just "renting the place for a couple of nights" but refused to tone it down. Then came the people who would try to open the front door of the Castro/Duboce Triangle apartment where Barnaby Thieme and Rebecca Reagan live, saying they thought it led to the lobby.
"The couple looked online and discovered what was behind the disruptions - a unit in their building was being rented out through Airbnb, the marketplace for short-term housing in private residences."
I read that as saying that the couple who were disturbed by Airbnb visitors DID talk to those visitors, only to find out that they weren't actual tenants of the building. The person putting the unit up for short-term stays on Airbnb doesn't seem to have been available.
AFTER EDIT: A top-level comment that came in since I posted this makes an interesting point:
I admire the optimism that youth brings, allowing someone to look at a problem with a fresh perspective but all too often, the rules, laws and regulations in place that make the old way of doing business so boring and hard are actually in place for a very good reason.
This is usually how the law (and business custom) develops, by encountering actual human behavior. As Oliver Wendell Holmes, Jr. wrote, "The life of the law has not been logic; it has been experience." The Common Law (1881), p. 1.
..DID talk to those visitors..
They need to talk to the person the visitors are renting from. Is that doesn't work, they can go one level higher up.
They need to talk to the person the visitors are renting from. Is that doesn't work, they can go one level higher up.
If they're shared tenants in a building owned by a landlord, they need to report the Airbnb to their landlord, followed by a notice-and-cure letter demanding that the landlord end the use of the building for Airbnb rentals. Conversion of an apartment in your building into an ad hoc hotel is a material change for any number of obvious reasons.
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Not mentioned is whether the person who owns the subletted apartment is, in fact, their actual neighbour (as opposed to someone who lives somewhere else yet still owns the property and rents it via Airbnb).
The point is that they didn't have a neighbor. They had an absentee property owner and a string of short-term tenants.
First came the noisy upstairs neighbors who said they were just "renting the place for a couple of nights" but refused to tone it down.
Weird that AirBnB wasn't asked to comment on this piece; or if they were, that they didn't provide anything significant.
I can say as someone who moved to New York two weeks ago and hoped that AirBnB would allow me to find a good temp place that i feel pretty critical towards the experience.
The prices are insane. I paid 3300USD for a shitty studio in China Town for a month.
I am ok with paying a lot of money for a place and I know NY well enough to know it's expensive.
But people who get only profit from subletting and pumping up the prices by a factor 2x-3x should not be allowed onto the platform.
Of course Airbnb don't really care because they get a percentage of the transaction.
So great idea but pretty shitty service at least in NY.
The prices are insane. I paid 3300USD for a shitty studio in China Town for a month.
I am ok with paying a lot of money for a place and I know NY well enough to know it's expensive.
But people who get only profit from subletting and pumping up the prices by a factor 2x-3x should not be allowed onto the platform.
Of course Airbnb don't really care because they get a percentage of the transaction.
So great idea but pretty shitty service at least in NY.
Well there are places on Craigslist you probably could've found cheaper in Chinatown of all places. But studio apartments in general are expensive in a place like
Secondly, Airbnb does have plenty of shared places in Queens and Brooklyn that go for less than seventy bucks a day, and studios that would be closer to 2k.
Secondly, Airbnb does have plenty of shared places in Queens and Brooklyn that go for less than seventy bucks a day, and studios that would be closer to 2k.
The thing is. right now I am looking at a 1BR appartment completely modern building, rooftop, open kitchen the works for 3600USD.
There are many places on AirBnB that have simply pumped up the prices to make a living and since there is not negative feedback mechanism everyone just charges more and more.
Craigslist yeah i tried that, i enden up with mostly scams and bait and switch guys.
There are many places on AirBnB that have simply pumped up the prices to make a living and since there is not negative feedback mechanism everyone just charges more and more.
Craigslist yeah i tried that, i enden up with mostly scams and bait and switch guys.
It's called capitalism. You're paying for the convenience of not having to wait to move in, not having to sign a long-term lease, etc. Of course you should expect to pay more than someone who puts up with those downsides.
It's inconsistent that is what it is.
No, it's not. Do you really not understand how basic retail economics works? Are you expecting someone to buy high and sell low?
As you yourself proved, if people will pay it, that's what the market rate is. Think it's extortionate? Don't pay it and make other arrangements.
As you yourself proved, if people will pay it, that's what the market rate is. Think it's extortionate? Don't pay it and make other arrangements.
Whats up with the attitude?
This is not a guy who buy high and sell low. This is a guy who have a room in his own apartment where he cramped a kitchenette in and call it a studio (not mentioning that)
Since I couldn't go and see it before where does that leave me?
You are assuming that I had sufficient information before I moved in. I didn't.
This is not a guy who buy high and sell low. This is a guy who have a room in his own apartment where he cramped a kitchenette in and call it a studio (not mentioning that)
Since I couldn't go and see it before where does that leave me?
You are assuming that I had sufficient information before I moved in. I didn't.
Housing in NYC is expensive. Frankly, it's like whining that Porsche won't sell you a 911 for Miata money, and that furthermore, the car rental agency charges the equivilant of a monthly payment for just one week! Stop the presses...
I have no problem with expensive apartments. I paid 12K a month years back. That was fair.
This is just not fair pricing and is taking advantage of the situation that once you are there it's too late.
That has nothing to do with capitalism or retailing.
This is just not fair pricing and is taking advantage of the situation that once you are there it's too late.
That has nothing to do with capitalism or retailing.
It has everything to do with it. Supply and Demand, etc. "Taking advantage" is a moral term. A capitalist would call it "leaving money on the table".
There is no such a thing as a pure capitalist unless you are claiming that there are people without any moral what so ever.
You are trying to separate two things as if that's possible. It's not. In language yes but in reality no.
I was not given all the information.
You are trying to separate two things as if that's possible. It's not. In language yes but in reality no.
I was not given all the information.
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> and since there is not negative feedback mechanism everyone just charges more and more.
There IS a negative feedback mechanism. Occupancy rates. Once people stop paying the asking rates for listings the prices will fall. It is called "what the market will bear".
There IS a negative feedback mechanism. Occupancy rates. Once people stop paying the asking rates for listings the prices will fall. It is called "what the market will bear".
You can't compare AirBnB to an apartment rental, especially in NY where two months down is not uncommon. Seems like it's more appropriate to compare it to a hotel room... in which case $110 a night is a steal.
For 110, in a hotel, I get cleaned every day, breakfast and I don't pay until I leave and I don't pay a deposit.
With AirBnB i pay 500USD in deposit, pay on arrival, it gets cleaned when I move out. Everything else is on me.
And I can compare it because I stay there longer than just a few days also AirBnB now have a sublet section. Again go compare those prices with for instance the prices on streeteasy.
With AirBnB i pay 500USD in deposit, pay on arrival, it gets cleaned when I move out. Everything else is on me.
And I can compare it because I stay there longer than just a few days also AirBnB now have a sublet section. Again go compare those prices with for instance the prices on streeteasy.
That's probably just a supply and demand issue. Those sorts of profits will attract other folks to let out space and bring prices back into line (assuming of course they can sort out all of the issues above)
Out of curiosity, would it not have been cheaper to stay in New Jersey and take the NJ Transit or Path? If you could, then your options for low-cost AirBnB or short-term sublet are much expanded.
I know, it's not the same as living in the city, and perhaps you wanted that experience as well. But not sure if the Chinatown Studio gave you the experience you were looking for.
I know, it's not the same as living in the city, and perhaps you wanted that experience as well. But not sure if the Chinatown Studio gave you the experience you were looking for.
I am here on an O Visa so I am here to work. I wanted to stay close to the office in the beginning until I found a proper place.
Hopefully I found that yesterday :)
Will have to get approved (again an issue when you don't have credit history as the US works opposite of Denmark in that regard)
Hopefully I found that yesterday :)
Will have to get approved (again an issue when you don't have credit history as the US works opposite of Denmark in that regard)
This kind of lettings are a PITA for the neighbours, with or without AirBnB. I used to live in a city with high level of tourism and the apartment next door was rented in a short term fashion. Sometimes the people was nice, others they were noisy, there's nothing AirBnB or the owner can really do apart from removing the people form the property if they are breaking the law or community rules.
Taxes and laws are a totally different beast here.
Taxes and laws are a totally different beast here.
My neighbors are pretty noise and the appartment is leased on a normal contract.
Weird no one mentions insurance. That's the biggest issue of all I would think. Landlords have insurance for legitimate tenants.
They do? The last time I read a lease mentioning an insurance was only to pay a hotel in case of fire/flooding, anything else you are on your own.
It wouldn't be in the lease, it's not for the tenant. Landlords will carry liability insurance for their units in case a tenant or their guest is injured, etc and decides to sue the landlord. Those liability policies often have limitations on who they'll cover, how the unit can be used, etc.
I'm guessing the insurance companies find a way to avoid covering you if you let a tenant sublet their apartment hotel-style... if for no other reason than I'd bet policies for hotels are more expensive than residences. (And hotels have to have better fire protection, etc.)
I'm guessing the insurance companies find a way to avoid covering you if you let a tenant sublet their apartment hotel-style... if for no other reason than I'd bet policies for hotels are more expensive than residences. (And hotels have to have better fire protection, etc.)
Right. I should have been clearer. Airbnb person staying in building sets building on fire. Insurance companies always look for anyway not to pay. Search web, find evidence that apartment was active on AirBnB and deny claim as it's a breach. Now everyone else in the building has to go after the Landlord directly.
Bottom line would appear to be that leases will soon specifically speak to this new business model and it probably won't be what most people would like to see.
Bottom line would appear to be that leases will soon specifically speak to this new business model and it probably won't be what most people would like to see.
It seems unconscionable to rent an apartment from a landlord and then use the space to run a hotel. Anybody who's ever rented more than one apartment knows that landlords are picky about tenants, often requiring credit checks as well as references from previous landlords. Renters sign a binding agreement with their landlord stipulating that they're using the space as their private residence. Breaking that agreement for profit is unethical.