The Housing Bubble

KPCC reports from California. “Los Angeles officials will hold citywide meetings on short-term rentals in the coming weeks as they move toward regulating the rapidly-growing industry. Sebastien De Kleer was among the handful of professional short-term rental operators who spoke. De Kleer noted his 80 LA properties have generated more than half a million dollars in lodging taxes in the city in recent years. That’s ‘money that I love to spend, money the city and residents desperately need,’ DeKleer said.”

“Dozens of Airbnb hosts showed up to defend the site and their right to home-share. Many said that income generated from renting out a room has allowed them to do things such as pay the mortgage and send their children to college. Councilmember Mike Bonin, who authored a motion for regulations with Council President Herb Wesson, said he didn’t have a problem with home-sharing. His motion aims to allow people to rent out part of their primary residence. But he said the ‘bad’ kind of short-term rental is proliferating throughout his district, which includes tourist magnet Venice.”

“‘Real estate speculators are coming in and buying up entire apartment buildings and using them as rogue defacto hotels in our neighborhoods,’ Bonin said.”

From Seattle Weekly in Washington. “Alice doesn’t have a job—not in the traditional sense, anyway. She’s self-employed. Instead of working nine to five, Alice is a host for Airbnb. Alice (who asked to be identified by a pseudonym) operates two apartments as full-time Airbnbs. ‘I started to realize that there was a huge number of people coming into Seattle, and realized I could pay off my student debts a lot faster if I could host more than just a couple times a month,’ Alice explains. ‘And now I have two [apartments] in the city that I do full-time for Airbnb.’”

“Alice rents a third apartment for herself, and works as housekeeper, booker, and concierge for the Airbnb units. ‘I rarely meet my guests,’ Alice says. ‘Getting into the building is pretty automated. Everyone just kind of helps themselves.’”

The Citizen Times in North Carolina. “In Asheville, short-term rentals mean homes rented out for less than 30 days - typically to tourists - when the owner or a main resident isn’t present. Council members voting for the high fine spoke in unusually impassioned language about why they were against short-term rentals despite pleas from some residents. They said there was a very real possibility that businesses would buy up chunks of neighborhoods, turning once residential areas into defacto hotel districts.”

“Vice Mayor Marc Hunt and council member Gordon Smith said ‘organized money’ was already appearing on the scene. Despite a local housing crisis, long-term rentals that had housed locals were being turned into more lucrative short-term rentals for tourists, they said. ‘What I don’t want is for predatory investors to come in and gobble up our neighborhoods and housing stock,’ Smith said. ‘That is exactly what is happening in other cities around the world. So let’s not pretend it can’t happen here.’”

The Boston Globe in Massachusetts. “The vast majority of people who advertise Boston homes on the online rental website Airbnb list just a single property — presumably to occasionally rent out their home or an extra room. But 15 percent have posted multiple listings, according to a Globe review. Airbnb acknowledges that some people are not renting out their own homes. A survey of its Boston users released by the company last year found that while 82 percent of users were renting a primary residence, 8 percent were renting an investment property, 6 percent were renting a secondary residence, and 4 percent were renting an in-law unit attached to the primary residence.”

“One Everett landlord said that he and his business partner recently converted 13 of the 100 apartments they own across Boston, Everett, and Chelsea from standard yearlong rentals into short-term rentals, and then listed them on Airbnb. ‘It’s more profitable for us . . . and we don’t have to deal with the hassle of a regular tenant,’ said Jose, 25, who asked that his full name not be published because he fears that officials would try to shut his operation down. ‘You can easily triple the income going through Airbnb, compared to a regular rental.’”

The Arizona Daily Star. “Hundreds of Tucson-area homeowners were surprised to learn this year that their properties had been reclassified as commercial. The move by the Pima County assessor targeted people who rent their houses, guesthouses or condos as short-term or vacation rental properties for profit. For some people who own vacation and short-term rentals, the move feels like a government money grab.”

“‘What they did was slam us with twice the property tax,’ said Chris McGuire. He and his wife, Shana McGuire, at one point owned two vacation rentals in Oro Valley but decided to sell them after the assessor notified them of the changes. The reclassification changed their property tax payment ratio from 10 percent for residential to 18 percent for commercial. ‘I’m trying to make a little bit of money and trying to make the mortgage,’ Chris McGuire said. ‘It just wasn’t worthwhile.’”