Commerce Is How It Will Pan Out
The Ocean Beach Rag reports from California. “Short-term vacation rentals are on the minds of a lot of people these days, especially with those who live at the coast in San Diego. The two sides are in contention, for example, over how many of the Airbnb listings in San Diego include the entire residence. The Short Term Rental Alliance of San Diego claims: ‘AirBNB has over 3,490 listings in San Diego alone. The majority of these listings are individuals sharing a portion of their home and go largely unnoticed to neighbors.’ In response, the Save San Diego Neighborhoods says: ‘Data obtained by Inside Airbnb on June 22, 2015 shows that the majority, 65% (2,283 out of 3,530), of Airbnb listings in San Diego are ‘Entire Homes or Apartments’ being rented out in their entirety.”
“We’d have to say, according to our research, by far most vacation rentals are advertised as an ‘entire place,’ as for example, recently for Mission Beach, Airbnb has 349 rental units where 330 – or 95% are for the entire unit.”
“The Voice of San Diego found: ‘Most of San Diego’s short-term rentals are run by property managers who don’t live on-site — not by homeowners renting out a room or two. … Twenty of the city’s top short-term rental management companies operate about 40 percent of those units, with each operating between 20 and 109 rental units. Another 22 percent of the registered short-term rentals are run by small companies and individuals who list at least three units. That leaves a little more than a third of short-term rentals registered with the city run by individuals who list just one or two units.”
“A July study of Airbnb and the units they have available for OB showed that on July 8, 2015, they advertised 212 rental spaces, of which 157 were the ‘entire place’ (74%), 51 were private rooms and 4 were a shared room. Another review of Airbnb in August showed that the company for OB had 198 rentals, of which 141 were for the entire place – 71%.”
24 East in New York. “Summer with its whirlwind of festivities and fun can also be time of consternation for those who feel the sting of rentals gone awry. The growing demand for website-driven summer rentals like vrbo.com and airbnb.com has rankled some neighbors and nicked the lodging business in Southampton Village. Adding a layer of complexity to the issue, some of these rentals are houses in foreclosure. Owned by banks, these homes are essentially being ’squatted in,’ said Southampton Village Mayor Mark Epley. Making matters worse, banks occasionally deny owning them, making it difficult for the municipality to know whom to cite for grievances.”
“Former Southampton Village Trustee Harald Steudte, who has been legally renting a house he owns on the corner of Hill Street and Tuckahoe Lane, was fielding complaints from his tenants that their next-door neighbors were being loud and disruptive. Mr. Steudte found the house listed on Airbnb, and eventually discovered through public records that Chase Bank has been listed as its owner since 2011, when the previous owners presumably defaulted on their mortgage.”
“After the village cited Chase for a new fence on the property that was 2 feet over what the code permits, a lawyer for the bank denied owning the home in court, and the case continues to be adjourned, according to Mr. Steudte. ‘This is an Airbnb house owned by Chase Bank,’ the former village trustee said. ‘If I were running a house of ill repute, would they keep adjourning this in court? No!’”
“‘It was on Airbnb for two times in the beginning of the season and then it was taken off,’ said Charles Regensburg, who claims he owns the home through a limited liability corporation. The contract to purchase the house was finalized in February of this year, but Mr. Regensburg is waiting for Chase to transfer a clear deed to the LLC, as it has several judgments against the title, he explained. The house had been rented through the website toward the latter part of July through an independent booking agent, but ‘I realized it really wasn’t fitting the criteria of the neighborhood and who I was renting to, and I disengaged from it,’ Mr. Regensburg added. The house no longer appears on the website.”
The Australian. “The sharing economy. It’s not, is it? Sharing, that is. The billionaire owner of Uber isn’t doling out dollars on the street. The chief of Airbnb isn’t housing the homeless. The sharing economy is not run by the Pope, it’s not owned by the people doing the exchanging, and none of us are getting in on the initial public offerings.”
“But we should not be alarmed. Our inability to nail this new economic force with an appropriate title simply reflects the fact that it is so alien. It’s so radical that it’s mucking up our MBA lexicon. It’s so next century that spellcheck doesn’t yet recognise the words.”
“So, we improvise. We use expressions such as: this business is the Airbnb of office space, or the Airbnb for live music. Or we describe new operations as the Uber for boat owners, the Uber for pets or the Uber for pot (a delivery system linking dope smokers with suppliers). Or we say Hipchat will do to email what the internet did to the post office. Or the GoPro drone will be the selfie for estate owners. Or simply, get Netflixed. We make the early innovators the generic expression for a whole industry.”
“But the great appeal of these expressions is that they sound human. They are more social than economic. And in the beginning it felt like sharing. It felt like a socialist utopia. It felt fresh and revolutionary and a little big naughty. We didn’t want to pay exorbitant credit card fees in taxis; we wanted to bypass sterile hotel experiences; we didn’t want to pay for music when we could rent. We liked going straight to the source — and shaking hands with them.”
“Sharing is how it felt. Commerce is how it will pan out. But it’s a lot of fun along the way — if you’re not a legacy business with a big building, a wage roll and an attractive profit margin.”
‘the beginning it felt like sharing. It felt like a socialist utopia. It felt fresh and revolutionary and a little big naughty. We didn’t want to pay…’
Nobody likes to pay. Let’s say I get a Yellen buck mortgage for a little coastal shack that I’m told is valued at $5,000 more every few months. Put it up on a website and net $100 a night. What am I gonna do? Buy another and another.
‘Twenty of the city’s top short-term rental management companies operate about 40 percent of those units, with each operating between 20 and 109 rental units. Another 22 percent of the registered short-term rentals are run by small companies and individuals who list at least three units.’
Socialist utopia my a**.
“Let’s say I get a Yellen buck mortgage for a little coastal shack that I’m told is valued at $5,000 more every few months. Put it up on a website and net $100 a night. What am I gonna do? Buy another and another.”
Yes! VALUED at $5,000 more every few months because it is PRICED at $5,000 more every few months. And it is priced at $5,000 more every few months because the value goes up by $5,000 every few months.
A true f*king miracle!
AirBNB isn’t “sharing” — it’s just an internet application that enables zoning violations by making it easy for homeowners to operate illegal hotels in residential neighborhoods.
I’m all for zoning violations, personally. The codes and government overreach have become absolutely oppressive.
To a degree, I see your point — especially HOA’s. But I’m thankful when zoning regulations keep the junkyard or the meat rendering plant from operating next door.
HOA’s are fine. You buy into them at your own risk. What I’m talking about are building/zoning codes which are implemented by the government with zero input from the people and designed with one thing in mind: FEES and FINES.
Cna you give an example?
In my neighborhood, it is against code to disrupt the flow of water in the swale. The helps everyone by keeping the streets from flooding into homes.
Like that?
‘Muggy, Can you give an example?’
You have a water heater in your house and it goes out. You have to get and pay for a permit to re-install a new one. Oh, it meets all code (strapped down, etc). Nope it doesn’t–you need to buy and install a water trap for the gas line.
You buy a preowned house that has passed all prior inspections. Oh wait, all those working toilets have to be replaced with new toilets. Every room now has to have ugly smoke detectors added.
You want new cabinets in the kitchen. Did you get a permit from the city. Oh wait, you did? The building inspector comes in and tells you that there are not enough electrical outlets (new codes) and he tells you where they need to be installed and how high off the floor they have to be. Oh wait, now he goes through the house and tells you that you have to install smoke detectors in every room. Did I tell you the victim was 91 yrs old and is hospitalized several times a year.
“Cna [sic] you give an example?
In my neighborhood, it is against code to disrupt the flow of water in the swale. The helps everyone by keeping the streets from flooding into homes.
Like that?”
No, not like your silly example at all. See salinasron above. Or, how about some of these:
-Requiring “use permits” to camp on your own private rural property, with a maximum allowable number of days per year, forcing people who live in an RV move it into a registered park (RV resorts and campgrounds lobbied for this).
-Not allowing the construction of a shop on a rural parcel which does not already have a house, forcing the owner to pull a permit and build a house if they want to construct a shop.
-Mandatory fire sprinkler systems in new construction, lobbied for successfully by fire sprinkler industry.
-Minimum square footage requirements for new construction which increases the tax base and greases the palms of everyone in the REIC.
-Permits required to set shipping container on property.
-Maximum allowable grass height in rural areas with fines for non-compliance, nevermind the fact that the property is way out in BFE where nobody could ever see it.
Should I go on? I could all day. All of this is designed to funnel money to special interests and the government. Property rights are eroding at an alarming rate.
It’s far cheaper to operate illegally, which keeps costs and prices down.
All those clowns crying about being priced out in OB are their own worst enemies. It really doesn’t matter what the council does on the issue, they are going to be priced out anyway since the border remains wide open to any and all new comers from every corner of the planet. Everyone wants to live on Bay Watch. The irony is those retards will be championing no growth while supporting unlimited immigration the entire time. You can’t fix that kind of stupid. Price will be the only moderator in this debate.
More like a crony capitalist investor’s utopia…
I had the plan on VRBO three months per year on the central or Northern California coast. But these places are going for about $300 per night. And they might be good if you have several adults also chipping in. But if you intend to go alone like I do, well not cost efficient. I checked Mendocino and noticed I could just as well stay in a hotel in Fort Bragg at lower cost.
I am thinking of simply taking a pickup truck and shell with a mattress and just camp out in the truck at campgrounds in Northern California. Would bring an electric blanket too.
Just got back from Kauai. Been going there for over 10 yrs. n. Shore. They are now going to treat it like Disneyland and only allow so many tourists in a bus at a time. Done.
I’ve never been to Hawaii. Sounds like I missed my window. Oh well…
It’s next to impossible to manage the resources of Hawaii to anyone’s satisfaction. I’ve been snorkeling off the Na Pali coast and they only grant a tiny number of permits for people to even touch the sand. You have to stay off shore and there are patrol boats that come by to fine anyone who dares to swim to shore. To get to the beach you need a hiking permit and to camp overnight you need another permit.
They are now going to treat it like Disneyland and only allow so many tourists in a bus at a time.
Not sure I follow how that makes it anything like Disneyland, nor how it would reduce your enjoyment of the place.
Care to elaborate?
Disneyland is enjoyable when your kids are little and you want”managed” fun. Once everyone is older Mexico, Tequila, and the natural outdoors is fun. Kauai has always been kind of an adult Disneyland. now you may need a blue bracelet to enjoy
in 2007 we were there for a week. Had a lot of fun. It is an outdoors enthusiasts place. Too bad the crowded world is now shut off from there. One by one, crowded spots are becoming hostile to the overpopulated world. Yosemite was one of the earliest areas to discourage visitors.
An aspect that is not thought of by those who are worried about any birth dearth. IMO, a declining world population by choice is not a disaster to economic growth. New discoveries to help the human condition are not going to stop.
Quality matters in everything. Not quantity. Same with humans. Same with cars. Substance over style. Ask an urban truck owner how often the bed of his pickup is empty. Or ask the Audi owner how often he takes his car over 100.
We in America are so over regulated that we can hardly go out our front doors without committing a felony. This is not just because the voters wanted big government. It is more than that. They wanted big government to have more rules to make living become more miserable.
50 years ago when Americas population was half that of today, paradise was obtainable.
Freedom and population density are inversely proportional.
Beautiful post, truly resonated with me. Particularly the Yosemite bit - first time I went, I was enchanted. But then I noticed all the crowds. Second time I went, it was unbearable. No interest in going back again.
Their is a reason that Uber & AirB&B are so successful….Taxis & motels got so nasty that it opened the door to these alternatives…I vividly remember the last taxi ride I had from the airport…You walk out and get the next dude in line…I got in the back seat and I wanted to vomit it stunk so bad…Ditto with many motels…
They are losing money hand over fist. There’s not much of a barrier to entry so copy-cats are pouring in. It’s just cannibalizing existing businesses by cutting out the governments, etc. In the case of uber, you had local governments getting greedy and setting up mini-monopolies. OK, take that pie and cut it up into smaller and smaller pieces. When the first “fleet” of new Prius’ start wearing out, these drivers will realize it’s not so profitable after all.
We’ve already seen how airbnb plays out with craigslist. Eventually people that live there get feed up and complain until the local governments shut it down. And when house prices are falling these speculators will run like the wind.
I cannot imagine allowing a stranger into my house unless it had a separate locked entry.
“unless it had a separate locked entry.”
…but then they’d still be in your house.
If it’s a separate entry unit like a mother-in-law, fine. I’m talking about letting strangers in to sleep in the basement, etc. That’s nuts.
Like I said, AirheadBNB will morph into 2hr room rentals for hookers and johns. Anything illegal? Use AirheadBNB. And the empty pocketed home debtors in Californica will establish the trend. Washing sheets, disposing condom wrappers and cleaning toilets. Yep…. You’ve really come a long way.
AirHeadBNB…. poster child for a money losing failed business.
I’m a de regulationarian
Uber will cause other gov rigged games to collapse
Good !
As to its valuation
Ba)h)hhh
There was a story in Dallas paper about only 2 of the 500 or so Airbnb owners actually paying the occupational city tax, hotel tax.
And none of it is properly insured. They are just getting lucky for now. Just like pizza delivery drivers. They never tell their insurance company they are using the car for commercial. They also don’t account for the wear and tear on the vehicle.
Just like debt donkeys don’t account for $2-$3/square foot per year depreciation year after year after year on their three sided shanties.
“And when house prices are falling these speculators will run like the wind.”
This will be beautiful entertainment, and fodder for many future HBB posts.
‘Washington insider Chris Lehane to head global policy as the home-sharing app continues its steady march toward a global expansion marked by often hard regulatory tussles. Besides working for the Clinton administration, Lehane also worked as Al Gore’s press secretary leading up to the 2000 election. The New York Time recently described a horrifying account by an American teenager who was assaulted while staying at an AirBnB-rented flat and complaints by his mother about the company’s lapse in security measures.’
‘Jessica Santillo, the former White House assistant press secretary who handled much of the Healthcare.gov meltdown response, was the most recent to arrive, now to be a spokeswoman at Uber, along with White House director of strategic & message initiatives Jordan Burke, associate director of intergovernmental affairs Kellyn Blossom and assistant to the deputy White House chief of staff Sarah Fenn. President Obama’s former campaign manager David Plouffe went to Uber, the ride hailing company, last year.’
‘Lehane, who has been a consultant to AirBnB, will take over policy and public affairs from David Hantman, who will no longer work full-time for the firm. While Lehane will lead the team of policy experts assembled by his predecessor, he said he expected his team to grow as the company does. It also offers its service in more than 34,000 cities across 190 countries, each of which has different regional policymakers and regulations that require local expertise to navigate.’
‘This suggests that Lehane’s strategy will be presenting Airbnb as a resource for middle class San Franciscans to earn extra income and stay in their homes – a message the company has already been fine-tuning, as an ad from June indicates. Along with New York, Airbnb has faced crackdowns in worldwide cities such as Berlin and Barcelona.’
http://www.ledgergazette.com/airbnb-hires-clinton-s-master-of-disaster-to-handle-backlash/51200/
Sounds expensive.
Novato, CA Housing Prices Dive 8% YoY; Housing Demand Craters Statewide
http://www.movoto.com/novato-ca/market-trends/
‘Zhou Xiaochuan, governor of China’s central bank, couldn’t stop repeating to a G-20 gathering that a bubble in his country had “burst.”
‘It came up about three times in his explanation Friday of what is going on with China’s stock market, according to a Japanese finance ministry official. When asked by a reporter if Zhou was talking about a bubble, Japanese Finance Minister Taro Aso was unequivocal: “What else bursts?”
http://www.bloomberg.com/news/articles/2015-09-04/china-s-zhou-kept-repeating-the-bubble-burst-at-g-20-meeting?cmpid=yhoo
‘G-20 Binds China to FX Peace Pact for Post-Bubble Cleanup’
‘The Chinese delegation’s presentation was the main focus of the two-day meeting, Spanish Economy Minister Luis de Guindos said.’
“There’s been an excess of investment and an excess of indebtedness — it will take time to clean up those excesses,” Guindos told reporters. “They are heading to a new normal situation for them, which will be growth around 6 or 7 percent.”
http://www.bloomberg.com/news/articles/2015-09-05/g-20-binds-china-to-currency-peace-pact-for-post-bubble-clean-up
SOP:
1. There’s no bubble.
2. There is no bubble.
3. Dang, I’m glad that bubble is over. Now, let’s print some money and spend it!
I guess china is unloading treasuries to buy yuan and defend its currency.
U should back up the truck and buy some treasuries.
‘Finance Minister Lou Jiwei said that central government spending will rise 10 percent this year, more than the 7 percent growth budgeted at the start of the year, according to a statement late Saturday on the People’s Bank of China website. China will raise dividend payments from designated state-owned enterprises to make up for any shortfalls.’
‘China can no longer rely on policy supports to achieve 9-10 percent growth, as it may already take several years to digest excess industrial capacity and inventories, he said. It will go through “labor pains” in the next five years as it aims to complete main structural reforms by 2020, Lou added.’
http://finance.yahoo.com/news/china-emphasizes-stability-g20-fiscal-040928803.html
Let’s print some money and spend it. Policy supports? No, the globalists handed you that 10% growth and you pissed it off.
Two things: all of a sudden I’m finding quotes about no jobs in China. And notice that there’s lots of bubble talk regarding their stock markets, but nothing about the real estate.
“several years to digest excess industrial capacity”
Malinvestments cannot be “digested”. They can be torn down, recycled, bulldozed and defaulted on.
“Around 6 or 7…”
AlbqDan weasel words
Loose lips
Sink ships.
Unless the ship has already sunk,
in which case I guess it doesn’t matter.
Sarasota, FL Housing Prices Plunge 20% YoY
http://www.zillow.com/sarasota-fl/home-values/
Realtor Arrested On Molestation Charge
http://fox40.com/2015/07/15/real-estate-broker-accused-of-taking-pictures-of-minors/
‘If you get money from boarders, roommates or accessory apartments the new “HomeReady” program from Fannie Mae seems like very good news. The reason the Fannie Mae program is so different is that lenders have traditionally refused to recognize income from roommates and boarders except in very restricted circumstances.’
‘For example, Federal Housing Administration (FHA) guidelines say that income from roommates can’t help borrowers qualify for a mortgage. The story with boarders is different: Money from a boarder counts but only if the boarder is “related by blood, marriage or law.” The U.S. Department of Veterans Affairs (VA) has an even stricter policy for loans it backs: it simply won’t count income from boarders or roommates when qualifying borrowers.’
‘There is some practical basis to these restrictions: Many communities use zoning to ban in-house apartments, the income from boarders and roommates may not show up on tax forms and thus can be difficult to verify, and money from home sharing is traditionally not regarded as stable and ongoing.’
‘Now, finally, there’s an effort to align mortgage standards with housing realities: Fannie Mae has announced that it will soon offer the new “HomeReady” mortgage product, a loan with as little as 3 percent down. “For the first time,” says the company, “income from a non-borrower household member can be considered to determine an applicable debt-to-income ratio for the loan, helping multi-generational and extended households qualify for an affordable mortgage.”
‘Okay, but what about those long-standing restrictions related to non-family members? It turns out that such traditional limitations are hokum. “Research indicates that these extended households tend to have incomes that are as stable or more stable than other households at similar income levels, positioning them well for homeownership,” said Fannie Mae.’
‘The HomeReady program will allow mortgage applicants to include income from non-occupant borrowers such as parents as well as in-house rental payments from such things as basement apartments.’
http://www.realtytrac.com/news/mortgage-and-finance/new-fannie-mortgage-recognizes-it-takes-a-village-for-some-homebuyers-to-qualify/
Heck of a job Mel.
Governments version of AirHeadBnB. Government FlopHouses.
Illegal immigrant households with three families under one roof are celebrating the new Funnie Mae research findings.
“After the village cited Chase for a new fence on the property that was 2 feet over what the code permits, a lawyer for the bank denied owning the home in court, and the case continues to be adjourned, according to Mr. Steudte. ‘This is an Airbnb house owned by Chase Bank,’ the former village trustee said. ‘If I were running a house of ill repute, would they keep adjourning this in court? No!’”
So Chase Bank is in on the Discrete Personal Services industry.
Who’d've thunk?
This is interesting:
https://www.airbnb.com/s/85016
It’s the area I’m going to shoot video in today.
I love the narratives that define the current housing bubble.
* The Chinese all-cash buyers didn’t exist last time around
* Airbnb means you can buy a more expensive house and then rent it out
* Tech is hot! Didn’t you know that tech is hot? Everyone is a multi-millionaire in tech
* Banks do a better job a qualifying mortgage applicants this time around
* Millennials will continue to want urban living
* If the economy goes into recession, it probably won’t affect housing as much this time
What else am I missing?
This is all true. I’m a millennial who has been saving for a downpayment for a house for years and years. But I was also studying economics the first time around saw it all go down. And all of us here on this blog know that something is going down pretty soon.
BUT it seems like RIGHT now in 2015 before the economy tanks, everyone (realtors, parents, peers, lender I talked to, etc.) are pressuring me to buy ASAP. It’s like a conspiracy to destroy my finances.
I seriously just need to bunker down and avoid people until this is over.
Lowering loan standards is helping out minorities?