Cities, ho­tel in­dus­try strug­gle to curb growth of Airbnb

Belleville News-Democrat (Sunday) - - Local - BY ROBERT MCCART­NEY Wash­ing­ton Post

Austin Hong of San Diego has used Airbnb and sim­i­lar com­pa­nies for the past five years to rent out a sec­ond home for short stays. The in­come al­lows him and his hus­band to cover the mort­gage while keep­ing the three-bed­room house avail­able for fam­ily mem­bers who visit of­ten.

So Hong fought back when the city coun­cil passed a law in July that would ban such short­term rentals. He col­lected sig­na­tures on pe­ti­tions at food courts and so­cial gath­er­ings as part of a suc­cess­ful cam­paign to block the law from tak­ing ef­fect un­til it can be put to pop­u­lar ref­er­en­dum, pos­si­bly in 2020.

“They say it’s reg­u­la­tion, but re­ally it’s a ban that they passed,” said Hong, 34, who is creative di­rec­tor at a soft­ware com­pany. “We ab­so­lutely want reg­u­la­tion. What we don’t want is a ban.”

The ex­plo­sive growth of short-term rentals around the coun­try has pushed lo­cal govern­ments to rein in the prac­tice, with help from the ho­tel in­dus­try, which wants to sti­fle a for­mi­da­ble com­peti­tor.

But the ef­fort has spawned po­lit­i­cal con­tests that have high­lighted the dif­fi­culty of manag­ing a dis­rup­tive new in­dus­try. It has trig­gered a back­lash in some ju­ris­dic­tions from the short-term rental firms and prop­erty own­ers who don’t want to lose a lu­cra­tive en­ter­prise.

In June, vot­ers in Palm Springs, Cal­i­for­nia, over­whelm­ingly ap­proved a bal­lot mea­sure over­turn­ing lim­its on short-term rentals. Some state govern­ments, such as Ten­nessee and Ari­zona, have in­ter­vened to pro­tect hosts when leg­is­la­tors thought cities were set­ting lim­its that went too far.

In Wash­ing­ton, the tug-of-war is sched­uled to reach a cli­max Tues­day with a sec­ond Dis­trict of Columbia Coun­cil vote ex­pected to ap­prove some of the tough­est re­stric­tions in the coun­try. They would ban short-term rentals of a sec­ond home--a mea­sure that has proved to be the sin­gle most di­vi­sive pro­vi­sion in de­bates across the coun­try.

As in many other cities, the Dis­trict of Columbia bill would al­low prop­erty own­ers to rent out space in their pri­mary res­i­dence when the host is present, and for a spec­i­fied pe­riod – up to 90 days a year in Wash­ing­ton – when the host is ab­sent.

These kinds of new re­stric­tions – in scores of cities in the U.S. and hun­dreds world­wide – have barely slowed the rise in home-shar­ing. It is fore­cast to con­tinue to ex­pand rapidly and per­ma­nently trans­form the lodg­ing and tourism busi­ness.

Short-term rentals have soared be­cause hosts like the ex­tra in­come and guests get al­ter­na­tives, of­ten at a lower price, to a ho­tel or mo­tel. Match­ing the two has be­come much eas­ier be­cause book­ings can be done on­line on Airbnb, HomeAway, VRBO and other sites.

The ex­pan­sion aroused fear in the lodg­ing in­dus­try, whose com­pa­nies and unions have fi­nanced and pro­moted tight reg­u­la­tion of what they de­scribe as “il­le­gal ho­tels.” They have formed an al­liance with cit­i­zens un­happy that short-term rentals are al­ter­ing their neigh­bor­hoods’’ res­i­den­tial char- ac­ter, and af­ford­able hous­ing ac­tivists. They make claims, based on in­con­clu­sive data, that growth of short-term rentals is con­tribut­ing sig­nif­i­cantly to hous­ing short­ages and ris­ing rents.

“The real story over the last year or year and a half seems to be the ho­tel in­dus­try wak­ing up to the fact that Airbnb poses a much big­ger threat to their busi­ness than they orig­i­nally imag­ined,” said Anu Sun­darara­jan, a New York Univer­sity busi­ness pro­fes­sor.

He noted that on the most re­cent New Year’s Eve, more than 3 mil­lion guests were stay­ing in Airbnb rooms, or more than the to­tal num­ber stay­ing in ho­tels owned by Mar­riott and Hilton com­bined.

The reg­u­la­tions have es­tab­lished a le­gal frame­work for the new in­dus­try, which in many cities was op­er­at­ing in vi­o­la­tion of zon­ing laws or other or­di­nances. They also have al­lowed lo­cal govern­ments to col­lect taxes on short­term rentals. Airbnb says about 60 per­cent of its U.S. hosts now pay such levies.

JONATHAN NEW­TON The Wash­ing­ton Post

Airbnb land­lord Shaun John­son talks with his ten­nant, Tay­lor Va­len­cia, at his prop­erty in Wash­ing­ton. He rents prop­er­ties via the web­site in­stead of to long-term ten­ants.

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