Cities, hotel industry struggle to curb growth of Airbnb
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.
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.