New occupant in debate over gentrification? Airbnb.
WASHINGTON: In the eight years since Airbnb began operations in the District of Columbia, thousands of home owners have used it to become short-term landlords, often illegally. But now, a practice welcomed as a novel way to augment income - and maybe befriend tourists - has become a flash point in the city’s debate over gentrification.
Opponents of Airbnb and similar companies are backing legislation before the District Council to prohibit some shortterm rentals and regulate the rest. They say that renting houses and apartments for brief stays gobbles up living space that could ease the city’s shortage of affordable housing.
Many citizens also resent seeing a surge of transients disturb the residential character of their buildings or street blocks. Residents complain about noise, unfamiliar faces and loss of precious parking spaces.
But Airbnb’s defenders turn the gentrification argument on its head. Given the city’s high housing costs, they say, people rent out rooms in their primary residences, or in second and third homes they own, to earn enough money to remain in the District.
They also say that the housing shortage has resulted not from short-term rentals - which occupy a small fraction of the city’s total housing stock - but from larger economic factors such as the desire of millennials to live in cities.
The dispute over online, short-term rental services has erupted at community meetings, on neighbourhood message boards, in courtrooms and in ads on television and radio. It pits entrenched interests in the hotel industry and their union against an upstart competitor in a classic example of how a new technology can threaten an established business model.
At the core of the controversy are the same questions that grip the District over how redevelopment is transforming neighborhoods, raising housing costs, adding to congestion, and altering the city’s economic and racial demographics.
“Most of the Airbnb folks don’t fit into the neighborhood that well,” said the Reverend H. Lionel Edmonds, pastor of Northwest D.C.’s Mount Lebanon Baptist Church, who is helping lead a grass-roots campaign in favour of tough regulations. “They don’t invest in the community. . . . It increases the gentrifying component.”
The short-term rental market has exploded in the District since Airbnb got its start with homeowners renting space to visitors for President Barack Obama’s first inauguration in 2009. Last year, the number of Airbnb guest arrivals jumped almost 80 per cent, from 160,000 to 287,000. The number of people who hosted at least one trip jumped from 3,900 to 4,900.
Although Airbnb is the largest and best-known short-term rental service in the city, other companies such as HomeAway and VRBO are active, as well.
The rapid growth has stirred concerns. Brenda Shields, an advisory neighbourhood commissioner in the low-income Congress Heights neighbourhood in Southeast Washington, says Airbnbs victimise the needy citizens she sees when she volunteers at her church food pantry or delivers clothing and toiletries to the homeless. She’s willing to let people rent rooms in their homes but wants a ban on Airbnbs in multiunit buildings.
“You’re taking away an apartment that somebody could live in, who’s living in the streets,” Shields said. “You’re taking away from those people and giving to people who are here for a weekend or a week.”
Airbnb was a hot topic at a summer meeting of the Congress Heights Community Association, which was unable to reach a consensus.
Mary Cuthbert, vice president of the association and an advisory neighbourhood commissioner, warned that short-term rentals bring in transients who dilute a neighbourhood’s residential character and pose safety risks.
“You see all sorts of strange people coming and going” at Airbnbs, Cuthbert said. “Somebody may want to rent a room who is a psycho killer.”
She said short-term rentals were also contributing to a change in the racial makeup of the community.
“You have people coming in, and rents being pushed up, and minorities moving out to Maryland,” Cuthbert said.
But a short drive away, in River Terrace in Northeast, Shaun Johnson said he can afford to stay in the city only because of the extra income he makes as an Airbnb host. Johnson regularly rents out two bedrooms and the basement in his rowhouse and describes the extra US$ 40 ( RM172) or US$ 50 a night per rental as a “godsend” in meeting his mortgage payments.
Johnson, a baggage ramp employee for American Airlines at Reagan National Airport, also says he has befriended many of his guests and especially enjoys introducing Washington to foreigners.
“I feel like I’m an ambassador for the city and black Americans,” he said.
Johnson resents the accusation that he is contributing to a lack of affordable housing in the city. He says the government and big developers, not little guys trying to make a buck from Airbnb, are to blame for high housing costs.
“Why should the burden of affordable housing be on me? I can barely keep a roof over my head in my own house,” Johnson said.
On Capitol Hill, which has the most short-term rentals of any neighbourhood in the city, Dunnzy Levin is concerned because the proposed legislation would bar her and her husband from operating a building they own that has six units for corporate furnished rentals and short-term Airbnbs.
“It’s a huge deal for the income,” Levin said. “It’s giving us a little bit of a cushion to put some money away, because living in the city is kind of hand to mouth.”
If the legislation sets a limit lower than six for the number of units that a host can rent - as council members say is practically certain - then, Levin said, she and her husband would “change our business model.”
Another host concerned about the bill is Ruth Hamilton, who uses Airbnb to rent out one of two units in a rowhouse in Southwest that she and her husband own, in addition to the rowhouse where they live nearby. The Hamiltons’ experience shows the financial incentive to rent through Airbnb rather than through a traditional, long-term lease.
The downstairs unit, which is rented long-term, has been fetching the couple US$ 1,500 a month - a rate they expect to jump to between US$ 1,700 and US$ 1,900 a month with the next tenant.
But the upstairs unit, which they rent on Airbnb, yields an average of about US$ 117 a night, and the unit is rented about three- quarters of the year. That works out to more than US$ 2,500 a month.
“I do make more on that apartment than I would if I rented it out on a long-term basis,” Hamilton said. The extra money has helped cover her son’s college costs.
“It’s really enabled us to do that without debt,” she said. “I understand the concerns about big apartment buildings going Airbnb and the need for affordable units. In our circumstances . . . our real estate is our way of making ends meet in the city.”
The legislation before the District Council was the subject of a lively hearing in April. Council Chairman Phil Mendelson, D, expects the council to act on it by January.
Both supporters and detractors say the bill could result in a satisfactory compromise. In theory, it would permit individuals and small operators to take advantage of the “sharing economy” by renting out their primary residence, while insisting that they meet basic safety and licensing requirements.
At the same time, it would prohibit large- scale commercial operators from using shortterm rental services as a way to operate as hotels while dodging strict regulatory standards required in that business. — WPBloomberg