Airbnb ban or regulation
I traveled for over six months, staying at various Airbnbs along the West Coast. Searching for a cheaper place to live, a Seattle native who lives with gentrification and skyrocketing rents. Traveling to short-term rental areas has become an option and a good way to explore cities. In the beginning, Airbnb was a great way to experience modern nomadic life by staying in short-term rentals in different cities. Airbnb’s model is to live like the locals by matching a traveler with a host in an apartment or house at a monthly rate. Sounds easy, doesn’t it?
The roommate experience was not easy. I had encountered a few bumps with other Airbnb guests and hosts along the way. It wasn’t until I stayed in a small town called Summerville that I really considered moving to Nevada for good. I arranged a meeting with a local real estate agent, Stormy Ingersoll, to get more information on the local housing market. Stormy explained that it can take a while to find something in my price range. I informed Stormy that I was staying on an Airbnb monthly stay when Stormy broke: “Airbnb is bankrupting agents! I bet the host you have now has at least three houses. If I was just buying a house to turn it into an Airbnb, I would have to research how Airbnb is contributing to the rise in house prices in the area. I was shocked because I had never used Airbnb before, and honestly, I didn’t know much about the home sharing economy. I took his advice and researched Airbnb to see if my Nevada host had multiple listings. To my surprise, he had almost ten different homes. I do not believe it. I was curious when the change to extended stay started. Did Airbnb know what was going to happen? During my research, I found that Airbnb, before the pandemic, was doing very well with the majority of their short-stay listings.
Airbnb announced its IPO with shares opening at $ 146 on December 19, 2020, with the intention of going public. Then, in March 2020, the coronavirus started sweeping across the United States, causing massive customer cancellations leading to a 40% drop in the U.S. Airbnb market for the following year.
After laying off twenty-five percent of their staff, to desperately appease shareholders and prevent hosts from removing ads or switching to other competing vacation rental platforms. Airbnb founder Joe Gebbia has launched a global campaign for long term stays for Covid -19 responders such as healthcare workers and rescue workers dispatched to various cities via airbnb.org. Many Airbnb hosts wanted to donate their accommodation to aid workers, but they weren’t keen on switching to a monthly stay program. However, Airbnb was willing to offer account discount incentives, additional financial assurances, free marketing, and a dedicated host support team.
In just a few months, Airbnb has been successful with increasing revenues in many cities. As a result, the tech company has radically changed its business models to keep profits high, appease investors, and make long-term stays a permanent part of the platform. In a press release, Airbnb CEO Brian Chesky explained that Airbnb’s real vision is to expand beyond short-term vacations, due to the large inflection point caused by the pandemic. . Chesky claimed that millions of people live on Airbnb listings month to month, mainly because they no longer need to live and work in the same city. The Airbnb Quarterly 2021 report revealed a shift from the traditional traveler industry to local customers booking a monthly stay in their own communities.
Chesky said Airbnb represents a new future for the rental market where customers don’t need to prove income, check credit, or pay down payments, and Airbnb is a safe model to support. Resulting in the migration of Airbnb to the housing market without any regulations, restrictions or taxes that hotels or long term owners would be required to do business.
Most importantly, who would want to live in Airbnb permanently on long-term accommodation with legal protections and rent control. I have always considered my stay on Airbnb to be temporary. So I started looking for an apartment in Nevada with plans to move into permanent accommodation if buying a house takes longer than a year.
I wanted to speak with other customers residing in the same Airbnb rentals, as most appear to be locals. We often met in the common area to discuss the neighbors’ hypersensitivity to the five-bedroom house turned into an Airbnb rental with an absent owner. While I was there, neighbors sent letters threatening to call immigration and deport us if we didn’t keep the noise down. This happened even though there were no parties in the house during my stay.
I met the guest in room # 2, Kendra, who arrived about 30 days ago and seemed to be on the phone constantly with her social worker looking for permanent residence. Since Kendra has been on disability for several years, she was on a fixed income. She was eventually billed out of her apartment due to a significant rent increase. She said Airbnb was easy and cheaper than a weekly hotel and safer than staying in a shelter. Kendra has been a guest on over 50 local bookings for about 2 years. “It’s better than a shelter, but it’s a bit expensive because after a month, the price can go up to a hundred dollars due to an increase in cleaning costs, or simply a increased room charges. That’s why I only stay a few months and then find a cheaper one to move to. Kendra hopes to find some soon, but she’s on the social housing list and hopes to open up a spot on one soon.
Kendra and I are using the Airbnb Long Term Stay as a temporary option for permanent accommodation within our community, which is positive. The concept of a prepaid monthly stay has some advantages, but it should not be the primary business model that generates the majority of Airbnb’s revenue. It is not difficult to see that it is not sustainable when a community has too many empty houses and apartments contributes to the housing crisis.
First-time homebuyers like me are competing directly with financial top real estate investors. Without regulation, the number of homeowners absent on Airbnb contributes to the low stock of housing in the rental market and increases the cost of living. People like Kendra who need low-cost housing are billed with no other options to meet that need. So why can’t Airbnb embrace a sustainable business model and make money? Instead of a ban on Airbnb, regulation may be the best option for communities to financially rebuild communities for residents and travelers.
Image featured by Photo by Blake Wheeler on Unsplash