AirBnB a Pandora's box of nightmares

10 Replies

Back in 2008 when the real estate market took a dive, many of my clients were upside down and risked losing their properties.  I began to offer them an alternative means to keeping their properties viable, short term renting.  I now have five properties and have dedicated the past four years in building a short term management company.  All of my properties are listed on VRBO and Homeaway.  About two years ago, when I first starting hearing the reference Airbnb, I listed my properties on their website as well.  Have done next to no business with Airbnb as the original Airbnb model was for a sofa in someone's living room, or a spare bedroom.  All of my properties are privately owned condo's that range in price from $175-$300/night.  All the Airbnb inquiries were for backpack type travelers looking for stays under $100/night.  I've kept my listings on Airbnb simply for the exposure and marketing value.  Now, Airbnb has become a nightmare.  It first started in NYC with the very public media exposure linking Airbnb to illegal rentals.  It then again became a problem in Portland Oregon and now, San Francisco. San Francisco just passed a regulation mandating that Airbnb collect all TOT fees from homeowner's and submitting to the city.  In addition, SF subpenaed Ab&b for owners private information; contact info, email address, physical address, phone numbers, etc.  In San Francisco, Ab&b has now become the Time Warner of short term rentals, which is bad in every way.  Ab&b is the new kid on the block and has monopolized the entire industry.  I have no issue with anyone making money, but I have issue with any one entity becoming a monopoly.  Now, they have introduced an off-shoot Airenvy, the property management side of Airbnb.  Again, there are many property management companies out there to choose from.  One only needs to do some research and get referrals from other property owners.  However, Airenvy is saturating the market.  Click on any google search and more than likely the first thing you'll see is a banner ad for Airenvy, even if you're googling fracking, or best Italian restaurant in your neighborhood, etc.  Doesn't matter what you are googling, Airenvy will be there.  Today, there was a posting on my FB feed for Airenvy, however, this one really got my goat as it stated under the beautiful picture of a couple in the mountains, "New service for VRBO."  It's not a new service from VRBO.  As a matter of fact, Homeaway, the VRBO parent company is suing San Francisco over it's decision to make AB&B a monopoly.  After attending a meeting last evening, the LASTRA - Los Angeles Short Term Rental Alliance, we are going to aggresively lobby the city of LA as we don't want our city to place regulations based on any one entity be it AB&B, VRBO, etc.  In short, this used to be a quiet, cottage industry largely operating without much fuss.  Thanks to AB&B, there are now city's across the country implementing and in some cases, banning short term rentals altogether.  They have opened Pandora's box for so many and seem to be skating on by to ultimately dominating the short term rental industry.  I for one, am not a happy camper!

@Paula Samuel  ,

I think there will continue to be disruptions in the short term furnished rental market, both through technology, legal changes, etc., and I don't think that's stopping any time soon. It's natural to be unhappy when the status quo that provides someone a living is shaken up. But it was bound to happen at some point, so time to adjust!

Do you have a portal to drive your own traffic?

Do you benefit enough from Airbnb's traffic to use them, despite how you hate how they "monopolized" the industry?

(naturally, through their own innovation and critical mass - not through twisting your or someone else's arm).

I don't think winding back the clock is an option, so time to find a solution going forward. And it looks like you're justifiably focusing on lobbying, if it's a big business for you..

Good luck!

This brings to mind one of my favorite quotes from one of my favorite authors:

“There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary public interest. This strange doctrine is not supported by statute nor common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back, for their private benefit.” – Robert Heinlein - 1939

Change happens and scares many people/companies. They want things to conform to what they already know.

Air BnB is a great idea and seems to have an overall positive outcome for those involved. Of course it seems that this country is all about new taxes and regulations with or without due process. It seems that New York and San Francisco are trying to make Air BnB and other space sharing companies fit into a mold that they are familiar with instead of gathering information and finding a way to benefit both sides of the issue.

Just so that you know Paula, there will be a whole bunch more of Pandora’s boxes opening up as people innovate and create new products and ideas.

Google knows you are interested in airbnb so it keeps following you around on the internet. This is an option for google advertisers...it gets annoying quick but I think that is whats going on for that part of the story. Others who type in fracking will get whatever advertiser is following them around. Facebook originally started this web ad trolling method I think. Thanks, Matt

In short, this used to be a quiet, cottage industry largely operating without much fuss. 

A quite cottage industry that was operating under the radar of city officials and regulators has now become a much bigger and more visible industry.  Hard to fault anyone for noticing there's a money-making market and moving into it.  And some of these officials have notice this industry is operating at least partially outside the law, something that was most certainly happening on VRBO all along.  Adapt or die.  Its the way of business.

Great quote, @Paul Granneman  

Hey @Paula Samuel  Welcome to Bigger Pockets.

AirBnB portrays themselves as "connecting people", and building community. If you look at the source of their revenue, it's largely from people operating like a business.

Incidentally, Airenvy is not directly owned by Airbnb. 

-Evan

Originally posted by @Jon Holdman :
In short, this used to be a quiet, cottage industry largely operating without much fuss. 

A quite cottage industry that was operating under the radar of city officials and regulators has now become a much bigger and more visible industry.  Hard to fault anyone for noticing there's a money-making market and moving into it.  And some of these officials have notice this industry is operating at least partially outside the law, something that was most certainly happening on VRBO all along.  Adapt or die.  Its the way of business.

Great quote, @Paul Granneman  

 For sure the cities are adapting to a new reality. My brother had to get approval infront of some sort of board Inyo county, and got it for 2k and a 4 to 1 vote. Vegas now is $500 and your in. Big Bear has this down to a science with placards denoting occupancy and parking limits. LA I think it is 5 units or more and your in biz. Outside of the HOAs areas, it seems the comprises are slowly coming to a legal fruition.

Thanks,  matt

Originally posted by @Paul Granneman :

This brings to mind one of my favorite quotes from one of my favorite authors:

“There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary public interest. This strange doctrine is not supported by statute nor common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back, for their private benefit.” – Robert Heinlein - 1939

Great and relevant quote. Guaranteed private enterprise profits are not "supported by statute"? No kidding. Nor should they be.

I love airbnb and vacation rentals and the sites that support them.  But I'm way more supportive of muni regs to protect the public (and collect taxes).   Offering housing/accomodations to the public is and should be a public health concern IMO.  

Originally posted by @Evan R. :

Hey @Paula Samuel  Welcome to Bigger Pockets.

AirBnB portrays themselves as "connecting people", and building community. If you look at the source of their revenue, it's largely from people operating like a business.

Incidentally, Airenvy is not directly owned by Airbnb. 

-Evan

I think this idea of "connecting people" comes from the media spin on the  "sharing economy" and building community. The internet is helping us all "connect", as in.....find each other.  It is not eliminating muni oversight and taxation,   Get a grip people.  

I love that Portland requires a permit and safety inspection. Bedrooms should have smoke detectors and a safe exit point. The inspections ensure that. I also love that AirBnB collects and submits the taxes.  That'll be less work for me.  Portland is actually considered to be short-term rental friendly because this cottage industry is being regulated instead of banned.  

My experience of AirBnB is a little different. A couple of summers ago, I travelled around Europe for two weeks and every single night except one I stayed in an AirBnB house.

Back in the early 1990's, I lived/worked in Europe for a few years, including a lot of travel, but found it extremely difficult to make any but the most superficial contact with local people. (Granted, working 80 hours/week didn't help...)

Compared to that, the AirBnB trip was absolutely amazing in terms of *being* in the culture. I was able to carefully choose my stays using the profiles and was able to meet and spend time with a priceless variety of people: people with cats, people with awkward teenagers or adorable tantrum-throwing urchins, people who lived in semi-restored historic ruins, bohemian weirdos with artsy communal lifestyles, widowed intellectuals with priceless antiques and hours to spare patiently correcting my grammar, people who forced me to eat and drink meals worth 3x what I was paying them, all of whom didn't speak (or agreed not to speak) a lick of Anglais. 

I've quietly viewed enough churches and paintings already; my goal was to break the insurmountable barrier of politeness and actually make contact with regular people, people who aren't trained in the hospitality-industry art of being efficient and polite. It took some work, but with a lot of "screening" beforehand I managed to arrange some unforgettable experiences.

My understanding of the origins of AirBnB is that this was precisely the kind of experience the creators had in mind - real people sharing their homes and lives.  Maybe not, but I have a rather gullible and idealistic nature and refuse to believe otherwise....

What irritates me the most about AirBbB today is that, because of it's success, that type of experience is becoming harder to find. Now it seems  swamped with commercial-minded property owners seeking to cash in on their dull, anonymous real estate investments. (And as a dull, anonymous real estate investor I can understand this...)

If I could suggest (or impose!) a change on AirBnB it would be to improve the social media/personal profile/search tools so that the face-to-face, life-sharing kind of experience I had would still be available.

Maybe the authorities just neet to tax the €¢£$ out of them so only the selfless idealists bother....

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