Thanks to the rise of Airbnb, many people are able to use their property as an extra stream of income. While these “short-term rentals” are a boon to those that don’t want to spend the extra money for a hotel, they’re of increasing concern to a large number of groups: homeowners, real estate agents, local communities, and the National Association of Realtors (NAR), among others. I recently read an article that looked at a panel of industry experts who discussed this issue at the 2016 Realtor Legislative Meetings last May, and what they had to say about it.
Owning property comes with various rights, including the chance to rent that property to other people. But Airbnb has changed this traditional rental market, as people rent properties for much shorter periods than the traditional one-year lease. This puts additional pressure on the price and availability of lodging in communities centered around tourism, and governments are looking at how they can regulate and tax this new system in a way similar to hotels or bed-and-breakfasts, including registrations and inspections. At the 2016 panel, experts agreed that renting a property for less than 30 days, which categorizes the overwhelming majority of Airbnb rentals, is still a residential activity. So just because you lease your home for a couple days, that doesn’t mean it’s a commercial property.
Plenty of people who lease their properties out through Airbnb have horror stories about the “guests from hell”, who leave a giant mess, end up destroying the property, or worse. If your Airbnb property becomes a “party house”, that significantly harms not only your own property’s value, but also that of your neighbors. At the same time, if a property can advertise “rentable areas” such as an in-law unit or coach house with its own entrance, then that could be a boon for the neighborhood. And in an area where short-term rentals are accepted and neighbors aren’t hostile to it, a home with “rentable” features might actually sell more. There’s evidence, for example, that vacation homes are going up in value because of this.
Plenty of communities have been trying to restrict and regulate Airbnbs. In Portland, Airbnb rentals require a permit from homeowners, and tax and lodging fees are required. In Austin and San Francisco, city officials have been looking to increase restrictions, and even outlaw it in some neighborhoods. Fannie Mae won’t buy a loan for a property if it allows units to be rented by the day. Because of this, among other reasons, many condo buildings, particularly in vacation communities, prohibit overnight rentals.
So far, NAR hasn’t taken a hard stance on the issue of short-term rentals. Indeed, as long as somebody is buying and selling these properties, the terms and lengths of these rentals should, at least on paper, be irrelevant. But the nature of these rentals and occupancy issues means that stances and regulations may vary greatly from one community or neighborhood to another.