Airbnb just had a major victory in San Francisco, defeating a proposition that would have restricted short-term rentals to 75 nights a year and placed several other conditions on property owner “hosts.” One of Airbnb’s most persuasive arguments was that the law was too invasive and tried to control what people did in their own homes.
Airbnb also argued that short-term rentals are good for property owners, tourists, and the cities themselves. The company advocates the idea that short-term rental companies can and should collect hotel tax revenues. In a city like New York, those revenues could be tens of millions of dollars. In San Francisco, California Airbnb has reportedly paid several millions of dollars in taxes, and used this as an argument to stay.
However, major tourist cities such as New York, New Orleans, Barcelona, and Berlin have all taken action to discourage short-term rentals. In Austin, Texas, a Type II permit is required to rent an owner-unoccupied home or duplex to someone for fewer than 30 days. Until at least 2017, no additional Type II permits will be issued. City officials took this action in response to complaints about residences turning into “party houses,” causing excessive noise and safety concerns for families.
All cities with short-term rentals (whether legal or not) have had major problems with such rentals, making the road forward potentially more difficult. The future of short-term rentals will require better cooperation with communities and more regulation. If nothing changes, more cities will act.
These are the three main things short-term rental companies should do to stay in business:
1. Make Sure That Hosts Are Following Local Laws
New York City has long had short-term rental restrictions on the books, and violations can sometimes result in heavy fines or other legal action. Last year, New York’s Attorney General found that around 75% of the properties advertised for rent on the site violated the city’s ordinances. Far from encouraging short-term rental companies to stay in business, the city has formed a task force to crack down on illegal hotels.
Portland, Oregon wants to tax and regulate short-term rentals. As part of getting a rental license, the city will inspect properties to make sure that they are safe for guests. When this law went into effect though, Portland area hosts did not immediately comply. In February 2015, the city had to threaten Airbnb to make its hosts get permits.
Short-term rental companies should ensure compliance before authorities must act.
2. End Conflicts With Neighbors
Complaints by neighbors are central to many rental conflicts. Many short-term hosts leave town and don’t exert enough control over their guests. In areas where property values are the most lucrative, homeowners are often now permanent neighbors of unruly strangers.
When apartments and houses become imitation hotels, problems follow. Tourists often travel in groups, and make no distinction between work nights and the weekend. They are notorious for getting drunk, making too much noise, and forgetting that other people are around. In a worst-case scenario, guests may violate noise ordinances or other local laws while renting.
Close neighbors should be able to contact short-term rental hosts. Ideally, though, neighbors should be totally unharmed by noise or other problems caused by short-term rentals.
3. Address Safety Concerns
While most short-term rental experiences are likely positive, there are many reasons why arrangements with unregulated strangers can go bad. Even the quickest internet search will reveal stories of these arrangements gone wrong. Unsuspecting hosts may face property vandalism or theft. There are rarer stories of host-on-guest or guest-on-host violent crime.
For guests, there are also safety concerns with the condition of homes. Hotels are regulated and undergo safety inspections. People’s private homes are generally not inspected before rental. In 2014, The Telegraph reported a story about a man who had to sleep in a room with a host’s pet rabbit, who bit him on the finger. More tragically, a father recently died at a Texas Airbnb rental after using a dangerous rope swing on the property. There was also a carbon monoxide death linked to the company, which now requires hosts to put detectors in rental properties.
Landlords (even short-term ones) may be liable for guest injuries, and their homeowner’s insurance often do not cover commercial rental. Airbnb has started offering secondary insurance coverage for hosts, but not all short-term rental sites do this. Property inspections, like the ones done in Portland, may be important in making this industry safer.
Authored by Alexis Watts, LegalMatch Legal Writer
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