13 ms·

Airbnb Is a Risky Neighbor

73 points by lmg643 12y ago

mantraxC 12y ago
If you want to avoid the moral hazard of tenants subletting their apartment, and the owners being screwed, you need a mechanism for the contract (which disallows subletting) to be enforced. So how do you effectively enforce that? Should the owner have cameras in the hallway? Should the tenants be subject to random checks? some balance has to be found to keep both sides happy. The other question is why are tenants going through the trouble and risks of subletting. And this guy knows why: http://moodyeyeview.files.wordpress.com/2011/08/toodamnhigh.png http://moodyeyeview.files.wordpress.com/2011/08/toodamnhigh.... You might notice Airbnb has virtually no presence (relatively) in countries where the rent is lower, especially in relation to people's income.
- sliverstorm 12y ago
  It may not matter if the owners catch their tenants subletting anyway. In some places it's nigh-impossible to evict, for any reason.
- uptown 12y ago
  The rent is too damn high. But it's not being helped by Airbnb. When "spare" housing is converted to short-term rentals then rental units remain near capacity, and rents continue to rise. The traditional scenario is that apartments remained empty, thus increasing the supply of available housing, and putting downward pressure on rent prices.
  - wpietri 12y ago
    Yeah, I suspect cities are going to start banning for-profit full-time subletting, especially in cities with rent control. It'd be a shame if more reasonable use cases get swept up in that.
    - notlisted 12y ago
      Of note: in NYC, it is already illegal according to most leases, and short-term leases are illegal for home-owners unless they reside in the home at the same time.
  - rcthompson 12y ago
    No, Airbnb isn't helping rent prices, but it is helping people who sublet their apartments via Airbnb pay their rent more easily while making it harder for everyone else. Another negative externality.
  - mantraxC 12y ago
    I get your point, but housing isn't like ice-cream. You can't just decide you don't want ice-cream because it's too expensive. The alternative is living on the street, which brings with itself inability to maintain employment and so on down the spiral. It's literally better not to eat for a few days, than it is to find yourself on the street with all your stuff. A point of no return. So the incentive to seek "tricks" is high (whether it be Airbnb, or living with 5-6 other people in a small apartment), and demand is dictated purely by how many people are there needing to rent, versus how much money they have.
    - uptown 12y ago
      Housing isn't an all or nothing decision. You can always opt for something smaller, in a worse neighborhood, or outside the metro area ... requiring a longer commute. The impact that Airbnb has is that transient visitors are utilizing real estate zoned for longer-term residential use instead of booking stays in hotels. Hotels are upset because they're losing business to an entity not subject to the same regulations and oversight they're subjected to. But more-importantly, long-term residents of a city are impacted by a shortage of available real estate because they're looking to sign a year long lease ... not move from Airbnb rental to Airbnb rental from week to week. I understand what you're saying with your ice cream analogy, but I'm not sure I agree that it relates to housing in the way you suggest.
- dominotw 12y ago
  simple. Like someone suggested here. Have an opt-out for landlords.
jakozaur 12y ago
Yeah, it's happen again and again. I love AirBnB as a customer, used it a few times and have a great experience with it... but I would be worried if somebody rent apartment next to me without they presence at all... ... on the other hand how would you enforce non-subletting policies? Likely only some high-end biometrics access could do that, but that won't happen any time soon in vast majority of the places.
- maxerickson 12y ago
  Document the violations and terminate the lease. If other tenants are being disturbed, they won't object to a camera at the building access door.
  - rahimnathwani 12y ago
    Terminate which lease? Let's say I rent an apartment from landlord A. We are cool. Now tenant B rents the apartment next door from landlord C, and promptly lists it on Airbnb. I am not a party to the contract between B and C, so can't do anything to terminate that lease. My landlord A hasn't done anything to breach our contract, so I have no grounds to terminate that. So I'm SOL.
    - ivv 12y ago
      I'd look into the home-owner association's by-laws that usually regulate renting activity in the building.
    - maxerickson 12y ago
      C might be willing to terminate the lease, especially if it is exposing them to liabilities they don't want. And as the sibling comment mentions, C might need to deal with the situation to live up so some other agreement. But sure, I was thinking from the perspective of the owner, not a neighbor.
- jdhopeunique 12y ago
  One option might be for AirBnB to have an opt-out policy for landlords.
notlisted 12y ago
Having lived in a BK building where at least 25% (4 out of 16) of the tenants rented out their apt. on AirBnB with regular frequency, I can't wait for this to be addressed once and for all... Strangers with keys to the front door, easily copied because our landlord didn't invest in secure locks. Strangers coming home at 3am on a weekday (Mo-We), inebriated, slamming the doors waking us up and the kid as well, quite often with more raucous strangers in tow for a night cap. Strangers picked up in a bar of our 'gentrifying' hood, who left at 5am after knocking back more beers and/or some boots. I paid rent, for the joy of living in a virtual dorm, they collected monies while affecting my quality of life and safety. The lease specifically forbade short-term subletting. We lived in that place for 13 years, 10 without problems, but the last 3 at times unbearable because of these "good friends from Europe". When we moved, our friendly neighbors across the hall, avowed AirBnB hosts (they came clean), suggested that we renew our lease one more year (rent stabilized) and put our apt. on AirBnB "as a source of income". They would happily "manage" our AirBnB listing (key transfer, cleaning) for a piece of the pie. We declined, we liked our other neighbors too much... With reports from Berlin, San Francisco and other cities showcasing how AirBnB has affected availability of apt's and is one of the main drivers of rising rents ( eg see http://www.sfchronicle.com/business/item/airbnb-san-francisco-30110.php http://www.sfchronicle.com/business/item/airbnb-san-francisc... and http://www.csmonitor.com/World/Europe/2013/1230/Berlin-squeezes-Airbnb-on-short-term-apartment-rentals http://www.csmonitor.com/World/Europe/2013/1230/Berlin-squee... ) it's about time something is done about this. Let's stop calling them social sharing companies, and just rename them "loopholes", who make money by assisting others in breaking the law, violating the terms of their lease, and enabling tax evasion whilst denying any type of responsibility for "sharing" my quality of life to pieces... Glad regulation is in the pipeline. Private home owners who reside in their own houses, share away, but keep AirBnB out of apt. buildings. Edit: words/grammar
- esbonsa 12y ago
  use something like http://www.unikey.com/ http://www.unikey.com/ and then you can easily revoke/disable keys
  - rahimnathwani 12y ago
mwsherman 12y ago
Airbnb will naturally drive up rents in places where it’s being used. If a tenant has the capacity to pay (e.g.) $2000 for an apartment, but now can get an additional (e.g.) $300 a month, the tenant’s capacity to pay is now $2300. A savvy landlord or condo association would want to capture this. Because it’s new, it’s seen as a disturbance. A little bit of thinking would reveal that there is now $XXX new money coming in the door (due to better utilization of the property). It’s in the owners’ ultimate interest to figure out how to either a) accommodate this explicitly and safely, and capture some of the new revenue or b) prohibit it because the tenants prefer it, but know that the price of a “non-shared” building will carry a premium. One way a condo association might adopt the idea is to point out that Airbnb’ers $$ might be used for building upgrades or to reduce condo fees.
- notlisted 12y ago
  Good point. I assumed the rents were driven up because fewer apts became available (tenants renting out their old place, or even landlords not signing up new tenants and taking the AirBnB revenue stream without the headaches or leases or evictions) but as you outline, the extra income may allow landlords to drive up the rents without much of a risk of turnover...
- logn 12y ago
  An HOA board which explicitly allows Airbnb listings, and especially one that profits from it, is in for a world of pain. You cannot get financing for a mortgage in a short-term rental community. That will discourage new buyers who can't get financing and drive down re-sale values.
  - mwsherman 12y ago
    Why would a lender be troubled by this? The property, due to a new source of income, is worth more. Seems like more income = less risk from the lender’s point of view.
    - logn 12y ago
      Fannie Mae and Freddie Mac have extensive rules on what mortgages they'll buy. These are known as conforming loans and get buyers the best terms and easiest approval (thus raising sale prices). For condos these rules are especially complex. Any property which has commercial use or rentals is already flagged for extra scrutiny and there are some uses which flat-out get it disqualified. Lenders not only want to be able to have Fannie/Freddie buy their loans eventually, but they also want the home to be easily sold. And traditionally home buyers want the "white picket fence" dream. Once the property turns into a an apartment/vacation/commercial complex, their market of buyers totally changes. There's nothing wrong with that inherently but it means that different people need to be underwriting and making those loans who can properly assess the value.
wyager 12y ago
I think it takes a really fucked up worldview to say "I don't like noisy visitors, so we should just ban AirBnB outright." Really? Is that your first response whenever you don't like something? Just make it illegal! How about you ask for enforcement/introduction of non-subleasing policies for your building? There is absolutely no good reason to screw over everyone else in the process.
- dominotw 12y ago
  you keep repeating the same thing over and over. How do you suggest landlords enforce the policy?
  - wyager 12y ago
    >How do you suggest landlords enforce the policy? Evicting tenants who don't follow it? That's how lease agreements work.
    - sanswork 12y ago
      Have you ever been through an eviction process as a landlord? It's not fast, and its far from easy.
- notlisted 12y ago
  It's not just the noise, it's the security as well. Safety is a real concern. The area still has muggings, drug dealing and even a few murders. Knowing who belongs in your building and who has a key is an important aspect of living in BK.
- pbreit 12y ago
  The problem is that not only is AirBnB not trying to do anything about it, they are actually continuing to push ahead further. Having the building you live in double as a downscale hotel is absolutely craptastic. From all your comments, you seem not to understand this rather simple point.
aerolite 12y ago
So everyone suddenly hates AirBnB, huh?
- notlisted 12y ago
  Nope. Not everyone. I wish. The nasty side-effects of AirBnB in metro areas however are becoming increasingly clear to non-users/non-hosts... and journalists.
chatmasta 12y ago
So what does Airbnb do when a property owner demands Airbnb delist his property from its site? Clearly an owner has more right than his tenant to determine where his property is rented, especially if their lease agreement prohibits short term rentals. If Airbnb received a legal notice from a property owner demanding it delist his property, it seems like they would have to comply. Otherwise they might face a pretty simple case of negligence for listing an owner's property for rent without his approval. The only evidence the owner needs to supply is a signed copy of the lease and public records of ownership. So why aren't landlords doing this? I think the issue is either they don't care, or there's no easy way to do it. Perhaps somebody should set up a service that facilitates this process by reducing it to uploading a copy of the lease agreement and ownership records, then sending a request to Airbnb. If enough property owners use a service like that, it could gain some significant attention.
- notlisted 12y ago
  I did not get this either, until I read https://news.ycombinator.com/item?id=7924005 https://news.ycombinator.com/item?id=7924005 Part of the story here is that the extra income the hosts generate allows them to raise the rents or at the very least reduce turnover.

73 points by lmg643 12y ago

If you want to avoid the moral hazard of tenants subletting their apartment, and the owners being screwed, you need a mechanism for the contract (which disallows subletting) to be enforced. So how do you effectively enforce that? Should the owner have cameras in the hallway? Should the tenants be subject to random checks? some balance has to be found to keep both sides happy. The other question is why are tenants going through the trouble and risks of subletting. And this guy knows why: http://moodyeyeview.files.wordpress.com/2011/08/toodamnhigh.png http://moodyeyeview.files.wordpress.com/2011/08/toodamnhigh.... You might notice Airbnb has virtually no presence (relatively) in countries where the rent is lower, especially in relation to people's income.

sliverstorm 12y ago
It may not matter if the owners catch their tenants subletting anyway. In some places it's nigh-impossible to evict, for any reason.
uptown 12y ago
The rent is too damn high. But it's not being helped by Airbnb. When "spare" housing is converted to short-term rentals then rental units remain near capacity, and rents continue to rise. The traditional scenario is that apartments remained empty, thus increasing the supply of available housing, and putting downward pressure on rent prices.
- wpietri 12y ago
  Yeah, I suspect cities are going to start banning for-profit full-time subletting, especially in cities with rent control. It'd be a shame if more reasonable use cases get swept up in that.
  - notlisted 12y ago
    Of note: in NYC, it is already illegal according to most leases, and short-term leases are illegal for home-owners unless they reside in the home at the same time.
- rcthompson 12y ago
  No, Airbnb isn't helping rent prices, but it is helping people who sublet their apartments via Airbnb pay their rent more easily while making it harder for everyone else. Another negative externality.
- mantraxC 12y ago
  I get your point, but housing isn't like ice-cream. You can't just decide you don't want ice-cream because it's too expensive. The alternative is living on the street, which brings with itself inability to maintain employment and so on down the spiral. It's literally better not to eat for a few days, than it is to find yourself on the street with all your stuff. A point of no return. So the incentive to seek "tricks" is high (whether it be Airbnb, or living with 5-6 other people in a small apartment), and demand is dictated purely by how many people are there needing to rent, versus how much money they have.
  - uptown 12y ago
    Housing isn't an all or nothing decision. You can always opt for something smaller, in a worse neighborhood, or outside the metro area ... requiring a longer commute. The impact that Airbnb has is that transient visitors are utilizing real estate zoned for longer-term residential use instead of booking stays in hotels. Hotels are upset because they're losing business to an entity not subject to the same regulations and oversight they're subjected to. But more-importantly, long-term residents of a city are impacted by a shortage of available real estate because they're looking to sign a year long lease ... not move from Airbnb rental to Airbnb rental from week to week. I understand what you're saying with your ice cream analogy, but I'm not sure I agree that it relates to housing in the way you suggest.
dominotw 12y ago
simple. Like someone suggested here. Have an opt-out for landlords.

jakozaur 12y ago

Yeah, it's happen again and again. I love AirBnB as a customer, used it a few times and have a great experience with it... but I would be worried if somebody rent apartment next to me without they presence at all... ... on the other hand how would you enforce non-subletting policies? Likely only some high-end biometrics access could do that, but that won't happen any time soon in vast majority of the places.

maxerickson 12y ago
Document the violations and terminate the lease. If other tenants are being disturbed, they won't object to a camera at the building access door.
- rahimnathwani 12y ago
  Terminate which lease? Let's say I rent an apartment from landlord A. We are cool. Now tenant B rents the apartment next door from landlord C, and promptly lists it on Airbnb. I am not a party to the contract between B and C, so can't do anything to terminate that lease. My landlord A hasn't done anything to breach our contract, so I have no grounds to terminate that. So I'm SOL.
  - ivv 12y ago
    I'd look into the home-owner association's by-laws that usually regulate renting activity in the building.
  - maxerickson 12y ago
    C might be willing to terminate the lease, especially if it is exposing them to liabilities they don't want. And as the sibling comment mentions, C might need to deal with the situation to live up so some other agreement. But sure, I was thinking from the perspective of the owner, not a neighbor.
jdhopeunique 12y ago
One option might be for AirBnB to have an opt-out policy for landlords.

notlisted 12y ago

Having lived in a BK building where at least 25% (4 out of 16) of the tenants rented out their apt. on AirBnB with regular frequency, I can't wait for this to be addressed once and for all... Strangers with keys to the front door, easily copied because our landlord didn't invest in secure locks. Strangers coming home at 3am on a weekday (Mo-We), inebriated, slamming the doors waking us up and the kid as well, quite often with more raucous strangers in tow for a night cap. Strangers picked up in a bar of our 'gentrifying' hood, who left at 5am after knocking back more beers and/or some boots. I paid rent, for the joy of living in a virtual dorm, they collected monies while affecting my quality of life and safety. The lease specifically forbade short-term subletting. We lived in that place for 13 years, 10 without problems, but the last 3 at times unbearable because of these "good friends from Europe". When we moved, our friendly neighbors across the hall, avowed AirBnB hosts (they came clean), suggested that we renew our lease one more year (rent stabilized) and put our apt. on AirBnB "as a source of income". They would happily "manage" our AirBnB listing (key transfer, cleaning) for a piece of the pie. We declined, we liked our other neighbors too much... With reports from Berlin, San Francisco and other cities showcasing how AirBnB has affected availability of apt's and is one of the main drivers of rising rents ( eg see http://www.sfchronicle.com/business/item/airbnb-san-francisco-30110.php http://www.sfchronicle.com/business/item/airbnb-san-francisc... and http://www.csmonitor.com/World/Europe/2013/1230/Berlin-squeezes-Airbnb-on-short-term-apartment-rentals http://www.csmonitor.com/World/Europe/2013/1230/Berlin-squee... ) it's about time something is done about this. Let's stop calling them social sharing companies, and just rename them "loopholes", who make money by assisting others in breaking the law, violating the terms of their lease, and enabling tax evasion whilst denying any type of responsibility for "sharing" my quality of life to pieces... Glad regulation is in the pipeline. Private home owners who reside in their own houses, share away, but keep AirBnB out of apt. buildings. Edit: words/grammar

esbonsa 12y ago
use something like http://www.unikey.com/ http://www.unikey.com/ and then you can easily revoke/disable keys
- rahimnathwani 12y ago

mwsherman 12y ago

Airbnb will naturally drive up rents in places where it’s being used. If a tenant has the capacity to pay (e.g.) $2000 for an apartment, but now can get an additional (e.g.) $300 a month, the tenant’s capacity to pay is now $2300. A savvy landlord or condo association would want to capture this. Because it’s new, it’s seen as a disturbance. A little bit of thinking would reveal that there is now $XXX new money coming in the door (due to better utilization of the property). It’s in the owners’ ultimate interest to figure out how to either a) accommodate this explicitly and safely, and capture some of the new revenue or b) prohibit it because the tenants prefer it, but know that the price of a “non-shared” building will carry a premium. One way a condo association might adopt the idea is to point out that Airbnb’ers $$ might be used for building upgrades or to reduce condo fees.

notlisted 12y ago
Good point. I assumed the rents were driven up because fewer apts became available (tenants renting out their old place, or even landlords not signing up new tenants and taking the AirBnB revenue stream without the headaches or leases or evictions) but as you outline, the extra income may allow landlords to drive up the rents without much of a risk of turnover...
logn 12y ago
An HOA board which explicitly allows Airbnb listings, and especially one that profits from it, is in for a world of pain. You cannot get financing for a mortgage in a short-term rental community. That will discourage new buyers who can't get financing and drive down re-sale values.
- mwsherman 12y ago
  Why would a lender be troubled by this? The property, due to a new source of income, is worth more. Seems like more income = less risk from the lender’s point of view.
  - logn 12y ago
    Fannie Mae and Freddie Mac have extensive rules on what mortgages they'll buy. These are known as conforming loans and get buyers the best terms and easiest approval (thus raising sale prices). For condos these rules are especially complex. Any property which has commercial use or rentals is already flagged for extra scrutiny and there are some uses which flat-out get it disqualified. Lenders not only want to be able to have Fannie/Freddie buy their loans eventually, but they also want the home to be easily sold. And traditionally home buyers want the "white picket fence" dream. Once the property turns into a an apartment/vacation/commercial complex, their market of buyers totally changes. There's nothing wrong with that inherently but it means that different people need to be underwriting and making those loans who can properly assess the value.

wyager 12y ago

I think it takes a really fucked up worldview to say "I don't like noisy visitors, so we should just ban AirBnB outright." Really? Is that your first response whenever you don't like something? Just make it illegal! How about you ask for enforcement/introduction of non-subleasing policies for your building? There is absolutely no good reason to screw over everyone else in the process.

dominotw 12y ago
you keep repeating the same thing over and over. How do you suggest landlords enforce the policy?
- wyager 12y ago
  >How do you suggest landlords enforce the policy? Evicting tenants who don't follow it? That's how lease agreements work.
  - sanswork 12y ago
    Have you ever been through an eviction process as a landlord? It's not fast, and its far from easy.
notlisted 12y ago
It's not just the noise, it's the security as well. Safety is a real concern. The area still has muggings, drug dealing and even a few murders. Knowing who belongs in your building and who has a key is an important aspect of living in BK.
pbreit 12y ago
The problem is that not only is AirBnB not trying to do anything about it, they are actually continuing to push ahead further. Having the building you live in double as a downscale hotel is absolutely craptastic. From all your comments, you seem not to understand this rather simple point.

aerolite 12y ago

So everyone suddenly hates AirBnB, huh?

notlisted 12y ago
Nope. Not everyone. I wish. The nasty side-effects of AirBnB in metro areas however are becoming increasingly clear to non-users/non-hosts... and journalists.

chatmasta 12y ago

So what does Airbnb do when a property owner demands Airbnb delist his property from its site? Clearly an owner has more right than his tenant to determine where his property is rented, especially if their lease agreement prohibits short term rentals. If Airbnb received a legal notice from a property owner demanding it delist his property, it seems like they would have to comply. Otherwise they might face a pretty simple case of negligence for listing an owner's property for rent without his approval. The only evidence the owner needs to supply is a signed copy of the lease and public records of ownership. So why aren't landlords doing this? I think the issue is either they don't care, or there's no easy way to do it. Perhaps somebody should set up a service that facilitates this process by reducing it to uploading a copy of the lease agreement and ownership records, then sending a request to Airbnb. If enough property owners use a service like that, it could gain some significant attention.

notlisted 12y ago
I did not get this either, until I read https://news.ycombinator.com/item?id=7924005 https://news.ycombinator.com/item?id=7924005 Part of the story here is that the extra income the hosts generate allows them to raise the rents or at the very least reduce turnover.