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Airbnb: A Good Neighbor?

By | November 5, 2017

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In October 2016, New York governor Andrew Cuomo made it illegal to rent New York City homes on Airbnb for stays of less than 30 days. In fact, the bill went so far as to make it illegal to advertise such homes for rent. Similarly, San Francisco lawmakers attempted to curb the usage of Airbnb by capping the number of days hosts can share their homes to just 60 per year. Much like in these two cities, metropolitan areas around the world, from Boston to Barcelona, are considering regulations on the popular short-term vacation rental platform due to fears that it leads to gentrification, deteriorates the character of neighborhoods, and steals business away from the traditional hotel industry.

While these new laws are marketed as community-oriented, they are often backed by moneyed interests. Marriott International, Hilton Worldwide, and Hyatt Hotels–corporations that have each been surpassed by Airbnb in terms of market value and number of rooms–are members of the American Hotel and Lodging Association. The Association has claimed credit for various anti-Airbnb legislative advances and has outlined a formal plan to combat short-term rentals by “[ensuring] comprehensive legislation in key markets around the country.”

In these municipal debates over residents’ legal authority to rent their homes on Airbnb, few voices have been more absent than those of actual Airbnb hosts. By listening to the experiences of hosts, it is possible to see how Airbnb can catalyze equitable economic growth, strengthen neighborhood identity, boost local business, and even promote better maintenance of buildings.

Making City Living Affordable 

Guests choose Airbnb over hotels “definitely because of the low cost,” says Victoria Chang, who spoke to the HPR about her experience hosting Airbnb guests in the Dorchester neighborhood of Boston. In most cases, the prices speak for themselves. The average nightly rate for a Boston hotel has soared past $250, while the average base price for Boston Airbnb listings is just $134. In London, hotels more closely rival Airbnbs with average prices of $151 and $107, respectively. In Manhattan, however, the average price of a hotel room is more than three times the cost of an Airbnb at $390 compared to $121.

“With Airbnb you can get an amazing place with a high possibility of more amenities for a fraction of the price,” says Michael Okosi, another host from Dorchester who spoke with the HPR. Many listings provide access to full kitchens, living rooms, and knowledgeable hosts, most of which cannot be found in a standard hotel room.

Not only do these lower prices and attractive amenities encourage more exploration from well-to-do travelers, but Airbnb’s more affordable price range also opens up traveling opportunities to new demographics. Rather than simply stealing business away from the hotel industry, Airbnb likely broadens the tourism market by allowing people on smaller budgets to afford to spend their free time visiting new locales. In fact, a study conducted in Texas found that a “1 percent increase in Airbnb listings corresponds with only a 0.05 percent decrease in hotel revenues.”

It’s not only guests who can better afford to stay in urban areas, however. Since 52 percent of all Airbnb hosts earn low to moderate incomes, the service can significantly improve their ability to afford housing. More than half of hosts surveyed by Airbnb actually reported that additional income from hosting has helped them to afford their homes. This sentiment was echoed by Ms. Chang and her husband Tim Reppert, who acknowledged that “Without the extra income, we [wouldn’t] be able to own this house at this location.”

Of course, there are some aspects of Airbnb that experts claim harm local housing markets. In a recent truTV episode of Adam Ruins Everything, comedian Adam Conover was joined by Roy Samaan, a research and policy analyst at the Los Angeles Alliance for a New Economy who is critical of Airbnb. According to Samaan, landlords are using the service to run illegal hotel chains–taking out leases on large quantities of rooms and filling them year-round with Airbnb guests. The practice raises rents for locals by decreasing the availability of housing.

However, statistics from Airbnb seem to debunk the notion that the service is rife with shady practices. According to the company, 80 percent of hosts simply rent out part of the home that they currently live in. Furthermore, a portion of the other 20 percent of hosts rent out second homes that might otherwise remain empty.

The illegal-hotel-chain argument may be rooted more in fear (stoked by the hotel industry) than in fact. In their 2016 plan, the American Hotel and Lodging Association laid out their intention to tarnish the reputation of Airbnb–funding new research and initiating paid campaigns to advance the narrative that Airbnb is dominated by large corporate landlords who do not care about the wellbeing of tenants or of their cities. The existence of the Adam Ruins Everything segment on Airbnb confirms Association’s success at keeping this negative portrayal ever-present in news media.

Although Airbnb may just be a convenient scapegoat for the lack of affordable housing, cities are still exploring significant tax hikes for hosts. Boston, specifically, is considering rate increases of up to 18 percent.

“If tax rates were to increase significantly, I would probably stop doing Airbnb as the time I invest in providing this service to guests would just not be worth it anymore,” explains Airbnb host Carrie C. Ryan, who hosts in South Boston. Ryan has noticed a serious lack of hotel rooms in the city, especially during conferences and events. He urges officials to understand that higher taxes “would limit the supply of Airbnbs and thus increase costs for guests and limit the amount of visitors Boston as a city might see.”

Ms. Chang, on the other hand, supports an increase in taxes but only for listings of entire homes that are not also occupied hosts.

Before cities move forward with increased taxation, they must analyze Airbnb’s true influence on rising housing prices. Even if some hosts do contribute to a rise in the cost of living for others, cities cannot ignore the fact that Airbnb is what enables many guests and hosts to live in urban neighborhoods in the first place.

Living Like a Local

Not only does Airbnb benefit individual hosts, but it can also put the authentic culture of these hosts’ broader communities on display. According to data released by the company, 74 percent of all listings are not in “main hotel districts.” One possible reason for this is that 91 percent of users want to “live like a local,” perhaps in less touristy, residential areas. This new style of tourism effectively disperses visitors throughout a more varied set of neighborhoods, spreading the influx of consumer dollars to places outside of downtown cores.

The Boston neighborhoods of Dorchester, Roxbury, Mattapan, and Jamaica Plain are home to only 8 percent of Boston’s hotels, but host 20 percent of Boston’s Airbnb guests. With the exception of Jamaica Plain, these neighborhoods have some of the lowest median household incomes in the entire city. However, the proportionally large number of Airbnb guests traveling to these destinations shine a new light on the previously overlooked neighborhoods.

Ms. Chang and Mr. Reppert recounted the story of a guest from another part of Massachusetts who stayed in their Dorchester home to get to know the area better. Ms. Chang recalled, “[the guest] told me afterward that our Airbnb made him want to find housing in our neighborhood.”

Dorchester is so attractive to guests because it is “a historic, diverse neighborhood,” explains Mr. Okosi. Beyond just affordability, Dorchester’s true identity as a diverse and authentic neighborhood is exactly the characteristic that wins over the guests who want to “live like a local.”

Amy, the creator of The Abundant Host (an online resource for Airbnb hosts), noted that guests want to stay in a home and location with its own “soul.”

Airbnb helps neighborhoods like Dorchester embrace and even advertise their soul and culture. Mr. Okosi suggests that bringing guests from all over the world into his community may even “strengthen the culture of accepting different cultures and backgrounds.”

Staying With a Friend

In addition to providing its guests with authentic experiences in communities around the world, Airbnb is known for fostering a community of its own. Mike C., a host from New Jersey told the HPR, One of the things about Airbnb I’m most proud of are the friends I made while hosting.” Indeed, these friendships and interactions can act as motivation for hosts. Amy humorously illustrates, “Maybe [the guests are] taking silly Instagrams of themselves in my living room. Maybe they’re starting a fire in the fireplace and drinking the best wine they’ve ever had. Maybe they’re using my juicer for greens and loving how amazing they feel in their bodies. These real human connections are what keep me inspired to host on Airbnb.”

“Airbnb is like staying at a friend’s place…you have someone to help you with directions, give advice on where to go sightseeing, what restaurants to dine [in], pretty much [how to] make the most out of your stay,” continues Mike. Although this advice may not be as sophisticated as that of hotel concierges, hosts have the advantage of being able to recommend local favorites and hole-in-the-wall establishments that might remain hidden to traditional tourists.

Moreover, compared to other travelers, Airbnb guests reportedly spend twice as much in the neighborhoods they visit, meaning the benefits of good relationships between hosts and guests also spread to local businesses. While the hotel industry may categorize Airbnb as harmful to the local economy, Mr. Okosi observed that “local businesses around my house are very supportive of Airbnb. It’s good for the community and the businesses get more customers.”

In this way, hosts earn money for more people than just themselves. They can act as liaisons between guests and neighborhood commercial establishments and become boons to local business.

Can Airbnb Regulate Itself?

Unfortunately, news reports about Airbnb tend to feature uniquely negative interactions between hosts and guests. For example, there are many stories of guests damaging property or of hosts providing lackluster, and at times dangerous, living conditions. In fact, there are even websites devoted to such horror stories. In response to these fears, cities are considering mandating health inspections and other safety regulations for Airbnb listings.

“There’s already building codes for residential properties to be rented, so it seems like inspections would just be a weird addition of bureaucracy for something that already is regulated,” says Jane, a Los Angeles host.

Ryan deems the inspections unnecessary. “[They] represent an additional cost for the city and additional time costs for the hosts. If a room is dirty then Airbnb’s rating and review system will reflect this.” Indeed, Airbnb has a review category just for cleanliness, a factor that guests also consider when giving an overall rating. If a listing receives less than a 4-star overall rating, it can be shut down.

Through reviews, guests can keep hosts accountable for consistent cleaning and maintenance. Many of the hosts already described themselves as “neat freaks.” In fact, Ms. Chang warns that “people who aren’t tidy or don’t know how to clean should not try to be hosts…It’s really hard work!” Other hosts admitted that they improved their cleaning habits when they began hosting in order to receive higher cleanliness ratings.

The review system, of course, works both ways. Guests must be mindful of their actions in hosts’ homes in order to receive positive reviews and more easily book places to stay in the future. Despite his many horror stories, Mr. Okosi asserts that “Airbnb allows the building to stay more maintained, as guests are encouraged to treat the property with respect as if it were their own place.” This argument is consistent with the “live like a local” mentality of many guests who are willing to abide by local customs, norms, and house rules.

In addition to promoting better maintenance of home interiors, Carrie explains that Airbnb has also pushed her to “pay more attention to the curb appeal and [better] maintain the outdoor garden space for [her] guests to enjoy.” With hosts like Carrie, Airbnb can also contribute to an improved neighborhood atmosphere by encouraging hosts to upgrade the exterior appearance of their homes.

Carrie wishes “The city saw Airbnb hosts as ambassadors of the city and encouraged hosting rather than [seek] to curb it through increased regulation and taxes.”

Skeptics and industry rivals will always resist new-age products and services. But cities cannot let the mischaracterization of Airbnb by big hotel chains and corporate lobbyists blind them of the good that the platform can do for their communities. Whether or not government intervention limits Airbnb’s future success, the online platform has already demonstrated that travel and downtime can be harnessed to strengthen and improve a city’s economy and culture.

 

Image Source: Flickr/opengridscheduler

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