Lowering the Boom on Airbnb

Kari Travis

Carolina Beat

Oct. 22nd, 2015

In the age of Uber, Lyft, and numerous other “concierge”-style services that use technology as a business base, there is Airbnb — the online bed-and-breakfast rental option.

Think of it like a normal B&B. Except for the fact that Airbnb relies on local residents to rent out rooms in their private homes. This means that, with just the click of a button, a complete stranger can pay to stay at your house. It’s a modern system in which the transactions are personal and the rates are competitive. And it’s growing more and more prevalent in cities across the U.S.

There’s just one catch: Airbnb’s popularity is raising questions — and eyebrows — among city officials.

In North Carolina, Airbnb rentals are not yet legal in cities such as Raleigh and Asheville. But while Asheville responded to its 900 Airbnb users by jacking up penalty fines to $500, Raleigh is working on rules that would both legalize and regulate Airbnb for roughly 500 rental owners around the city. But that’s not to say Raleigh isn’t also concerned about the implications of “short-term residential rentals.”

So what’s behind the mixed reactions to Airbnb? Glad you asked.

While online rental operations have been legalized in several U.S. cities, local governments are still cracking down. And here’s why.

Cities like Asheville and Raleigh — and, outside of North Carolina, cities like Los Angeles and Louisville, Ky. — are concerned about the impact of Airbnb on housing prices, as well as its effect on overall property values. In short, cities don’t want big businesses sidestepping other regulations and buying up a bunch of properties that can be run via Airbnb as hotels or vacation homes.

That’s why the Los Angeles city council decided to regulate 80 percent of Los Angeles’ Airbnb rentals out of business. And it’s not the only U.S. city to tighten restrictions on short-term rentals.

But despite such efforts to keep misuses of Airbnb in check, enforcing regulations isn’t so easy. In Louisville, officials who legalized online rentals now say that holding people to the rules is a real pain.

“This is a nightmare,” said Louisville assistant county attorney Paul Whitty during a July 22 committee meeting. “I wish we would have never done it.”

Whitty went on to say that regulating Airbnb is too expensive, especially since enforcers have to be proactive about constantly checking in on short-term renters. The problem has been compounded by the fact that the city expected to receive about 200 applications for short-term rental permits.

It got over 1,000 instead.

Raleigh officials, who have been talking since last year about how best to establish rules for Airbnb users, say they share concerns similar to those of other cities that struggle to enforce regulations. At-Large Council Member Russ Stephenson says that some Raleigh residents are already worried about the city’s ability to enforce existing rules. That’s why he wants to make sure new rules can work with those already on the books.

“We actually have a regulation that’s hard to enforce, [that says] a maximum of four unrelated people living in any single residence,” Stephenson said. “So then the question is: How many rooms can you rent out to Airbnb? And eventually you get to this four unrelated people rule, because that really is a citywide rule for any single residence — you can only have four unrelated.”

This collision between startup innovation and government regulation is just another in a list of trendy growing pains shared by cities across the map. And these chaotic discussions about how to control — or slow — the increase of Airbnb rentals are just a little ironic, according to Nathan Blecharczyk, one of Airbnb’s co-founders.

“When we started, everyone thought you’d be crazy to allow strangers to stay in your home,” said Blecharczyk to the Los Angeles Times. “Now all the fear is that everyone is doing it. It shows the power of this concept, and the opportunities here.”

Kari Travis (@KariLynnTravis) is an associate editor of Carolina Journal.

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