Do You Really Want Your Neighbor’s Pad On Airbnb?

Airbnb-start-1024x798

About a week or so ago, the story came out with such glee: Oak Lawn was the top trending Airbnb neighborhood in the U.S., according to a list released by the super short term lodging app. You know, the one that lets you make a hotel out of your home. It was started by two guys in San Francisco who were trying to pay their rent.

Right after the holidays, Airbnb released its list of the top 16 trending neighborhoods for 2016, based on how much growth the site saw in bookings to those places during 2015. It was cool that Dallas was in the top ranking, because only two other neighborhoods in the U.S. made the list — Kaneohe on Oahu, Hawaii and Poncey-Highland in Atlanta.

(By the way, the top three neighborhoods listed by Airbnb are Chūō-ku in Osaka, Japan; Banglampoo in Bangkok, Thailand and Brickfields, Kuala Lumpur, Malaysia. What do they have in common? Abhorantly high rents.)

Oahu? Wow, that Oak Lawn was up there with Oahu is pretty cool, right?

Well, wrong, actually, if you are a property owner. First of all, most of the area that is so highly sought after is really Uptown, not Oak lawn, where all the condos are. But no matter whether it’s Uptown or Oak Lawn, we are talking condos. And that has some homeowners blazing mad. Why? They don’t like that the tenants coming in and staying for  night or a week at someone’s condo are getting gate security codes and all to be let in.

In other words, they are worried about SECURITY:

Dear Candy:

I am the HOA Board President of two small condo associations in the Oak Lawn area, both in the 50-ish unit size.  Both complexes are older 60s construction converted in the early 80s and they are high density so information and rumors spread fast.  It was recently brought to my attention that one of the complexes has two units (different owners) that are being used for short-term rentals through Airbnb.com and similar web sites and my own quick web search confirmed that.   Owners and tenants are beginning to grumble about the transients even though there have been no problems with the short-term guests… yet, they say.  Both complexes are gated so the access codes are given out to each guest so security is the number one concern among residents.  The grass roots consensus is in opposition to allowing such rentals and the Board will address this at our next meeting.

My question to you and your rich supply of knowledgeable followers is if any other HOA Boards in the Metroplex have had to address this, their opinions on allowing or disallowing it, any City of Dallas zoning laws that may apply, or any HOA specialist attorney’s take on this concern.  Our bylaws only state that a unit’s use is not for “hotel and transient use” without further definition, but that’s our obvious first line of defense to regulate or prohibit this activity.

I have Googled the daylights out of this subject and the nationwide consensus for HOAs allowing these rentals is overwhelmingly against it.

I know one thing: you had better well check with your homeowner’s insurance policy before you turn your home into an Airbnb hotel. The company started providing secondary insurance coverage a few years ago, and now provides (as of October 22, 2015) primary liability insurance coverage with a list of exclusions:

  • The Host Protection Insurance program does not apply to liability arising from (1) Intentional Acts including: (i) Assault and Battery or (ii) Sexual Abuse or Molestation – (by the host or any other insured party), (2) Loss of Earnings, (3) Personal and Advertising Injury, (4) Fungi or Bacteria, (5) Chinese Drywall, (6) Communicable Diseases (7) Acts of Terrorism, (8) Product Liability, (9) Pollution and (10) Asbestos, Lead or Silica.

Do you have a neighbor who is making a little extra income by leasing out his home? Does that make you uneasy? If condo by-laws state that a unit’s use is not for “hotel and transient use”, is that enough to put a stop to Airbnb rentals OR should language be tougher? Anyone out there have any experience with this in their condo association? The lines are open! By the way, a proposition to control Airbnb short term rentals was on the ballot in San Francisco last November, and it was shot down, 55% yes to 45% no. The prop would have limited all short-term rentals to 75 days a year. “Currently the limit is 90 days when the primary resident isn’t present, and unlimited if the home is occupied by the host at the same time. It also would have required hosts to show proof a unit was authorized for short-term rentals, and then submit quarterly reports on occupancy.”

“Tonight, in a decisive victory for the middle class, voters stood up for working families’ right to share their homes and opposed an extreme, hotel industry-backed measure,” said Airbnb in a statement.

Sharebetter SF, a coalition supporting Prop F, said in a statement losing was a disappointment, and that the the measure would not have been on the ballot if “Airbnb were only about people renting spare rooms.”

“The fact is rampant abuse of short-term rentals is taking much needed housing off the market and harming our neighborhoods,” the group said.

Launched in 2008, Airbnb  is valued at $25 billion, one of the most valuable private companies in the world. The company spent nearly $8 million to defeat the San Fran proposition, according to the San Francisco Ethics Commission. Supporters of the prop, such as Sharebetter SF, raised less than a million dollars.

Screen-Shot-2016-01-13-at-1.37.46-PM

22 Comment

  • We successfully took care of this problem in our Uptown HOA. I would be happy to share my experience with the HOA president quoted here.

  • I detest Airbnb. It was admittedly started by people who weren’t paid enough to afford the rent. I bet if wages hadn’t stagnated over the past 30 years, there’d be no Airbnb (full of underpaid people needing extra cash their “jobs” won’t pay while likely skirting the taxes hotels pay). My building has an Airbnb poison pill in the rules that was inserted at a time when the term was “boarding house.” “A Co-Owner may lease his/her Apartment-Home for the same purposes set forth in Section 6.01 (a private dwelling), provided that such lease transaction is for a term of at least twelve (12) consecutive months. No rooms in an Apartment-Home may be rented and no transient tenants accommodated.

    • Just curious, Jon – have you ever used Airbnb from a non-owner perspective? Just curious what you “detest” about it? As I said in my other comment, I understand being apprehensive about wanting random people in your building and more power to HOAs that make that decision to explicitly prohibit it, but I’m not understanding the disdain for the business model itself.

      • No, I’ve not used Airbnb in any capacity (nor Uber or Lyft). As a tech analyst I am not a fan of the “sharing economy” which seems like a way to generate profit on the backs of underpaid people scraping by for a few extra bucks. I find it parasitic and reminiscent of pawn shops, but instead of grandma’s silver, the sharing economy pawns living arrangements and minutes in your car — all for a tidy sum without the responsibilities of being an actual employer.

        • I think it’s a bit unfair to lump Airbnb in with an Uber or Lyft. While with ride sharing there have been reports of underpaid drivers making pennies on the mile, the Airbnb model is a bit different (and more fair) from a homeowner perspective. There are always going to be issues that arise with disruptive concepts like this (taxes, fair wages, safety, etc.), and over time I think those issues will be addressed (be it with Uber drivers suing Uber for higher wages, like is happening now, or with additional rules and regulations that cities and HOAs are considering for Airbnb). But to just call the whole thing parasitic and detestable seems rather shortsighted.

          • mm

            I still ask, would most Airbnb hosts be doing it if their regular job paid better? If the answer is, “No, I wouldn’t be inviting strangers into my home if I had more money” then that’s the answer. I reserve the right to change my mind as the “kinks” are worked out…as any intelligent person would.

  • I live in a very small condo community in Deep Ellum. I’m not aware of any others in our building using Airbnb, though I admit I’ve thought about using it in the past. However, I don’t think the cost-benefit would be enough for me to accept the burden of having someone else in my home (though I suspect peak times like Texas OU weekend could allow me to jack up the price, if desired).

    I know we don’t have any specific provisions about Airbnb, just the generic ones that you mention. On the one hand, I can understand the security concerns, but on the other, I feel that some of it is a little overblown. I’ve used Airbnb from the visitor side many times – and the nice thing about it is being able to give reviews of guests and decide whether or not you feel comfortable renting to that person.

    So if you ask me, I would not want a specific provision banning Airbnb altogether, but perhaps provisions that would inflict penalties for abuse of the system or neglecting safety concerns with those they rent to. I know that’s very subjective, but it would be hypocritical of me to want to use Airbnb around the world, then get all NIMBY when it hits close to home.

  • Absolutely not and my HOA has had a rule going back at least a decade saying that owners are prohibited from renting or leasing their unit for a period less than 30 days. I was trying to find the exact language because it is more complicated than that but we went through it when we were afraid people would lease their units for the Super Bowl and then revisited it with AirBnB and came to the conclusion that any AirBnB use was prohibited under our existing rules.

  • Let me put on the gloves my dearest Jon. I have used Airbnb EXTENSIVELY. As a single working mom schlepping her kid to auditions all over the country it saved my life. I could never have afforded the outrageous hotel rates in places like LA and Miami where I took my son for college auditions. Without it I’d be in debt up to my ears just from the audition trips. Airbnb arose out of a need and that need is huge. The folks that use Airbnb would simply NOT travel otherwise. These are not the same people that would stay in hotels. These are people like me who can now actually go places because there is affordable lodging. I’d much rather pay a young couple needing the money for their mortgage or an older couple subsidizing their almost non existent social security than a greedy corporation that doesn’t give a damn about your comfort. I’ve had very few hotel experiences in my life that match the care and kindness I’ve experienced in Air bnb’s.
    It’s not parasitic at all, the shared economy is the wave of the future and it’s working. Change is never comfortable for many but it’s an absolute necessity.

    As for Uber, it’s so much better than taxis! You cannot get a reliable decent taxi service in Coral Gables or in Dallas two places in which I’ve had plenty of experience. It’s a local joke. Uber has saved countless parents from worrying about their kids driving, most likely prevented a ton of accidents when folks choose Uber over driving drunk and been a Godsend for people that can no longer drive. People CHOOSE to drive for Uber. There will always be bad stories about any company but the good are never reported! That’s the problem! Every single Airbnb owner I know of, and I know plenty, LOVES being a “host”, loves meeting people from all over the world and showing off their town. These are both services that offer tremendous benefit to both the host/driver and the end user. Ok now lets get a cocktail : )

    • mm

      Sure, let’s get a cocktail. We’ll go online and see if anyone is renting a pair of chairs in their living room and offering reasonably priced for drinks…because the host/bartender hasn’t gotten a raise in 10 years, nor do we have enough cash to go to a bar. 🙂

      • As a dues paying member of my HOA and a hard working school teacher, I resent the Airbnb owner who has given her guests carte blanc permission to use my pool and tennis courts. I am on this like a dog on a bone and would appreciate any advice on here.

        • That AIRbnb HOST is paying their dues just like YOU! And they should be able to let someone use their condo perks in their place. Geez you people are such snobby little aristocrats aren’t you? Just like the precious prudes who pay more to have a window apartment right next to the pool and yet complain the most because of NOISE from said pool. It’s too bad that People can still be so selfish!

    • It doesn’t make sense to single out the “sharing economy” as evil because it’s used to supplement what might be unfair wages in general. Should we stop people from taking on part time jobs too? I’m sure you will find the majority of the people renting their homes are not doing it out of some desperate last attempt at making ends meet. Like Karen says, most people I’ve rented from take pride in sharing their homes and their cities with visitors – and if there’s a system that will ensure it is done in a safe manner while earning fair compensation, then even better.

      I just hope the next time I rent an Airbnb I don’t go somewhere with judgy neighbors.

      • Good. Then don’t come to my development because that is exactly what is going on. This person was almost a year in dues arrears and then comes up with the money via Airbnb, renting out OUR amenities.

  • With over 30 years of property management experience, including two years of HOA experience, I know how difficult it can be to manage property and people! I am not an attorney and can’t give legal advice but my own personal opinion is that hotel and transient use would certainly be the same as a short-term rental. People stay at a hotel overnight, or for a short period of time. A short-term rental is the same thing. David asked about opinions of Airbnb, not Uber or other things. Airbnb, hotels, transient use, short-term rentals, are all the same thing. If your bylaws state, “No hotel or transient use” there is your answer. It is not allowed.
    Homeowners have a very valid concern when it comes to security, gate codes, etc. What happens when someone enters with a gate code and rapes someone? It happens, let me tell you! What happens when someone stays in a condo, using Airbnb, and later sells the gate code to someone who burglarizes several of the units? This is the world we live in today! If someone really wants to rent out a room to someone through Airbnb, great! They should buy a house and only put themselves at risk. Don’t risk the safety of 50 to 100 people just to make a few bucks!

    • M. Lind – Thank you for addressing the question that I was asking. All of the concerns that you stated are the same as the residents. The details that I was trying to get from other HOAs was, for example, what minimum time periods do they place on shorter-term leases. For example, one of the units is also listed on a corporate rental web site so it could be possible have lessors for say, one to three months. Would most HOA Boards and the residents consider that acceptable? Over and over again I’ve read stories where a 30-day minimum lease is adopted as the shortest lease allowed. We need to define “transient”. I was curious as to whether other Boards imposed their restrictions within the rules & regulations or if they amended the bylaws (which requires a vote of the membership, attorney’s fees, and a great deal of money spent).

      Your input will be appreciated.

      • Please be reminded that I am not giving legal advice and I am not an attorney, so please seek the advice of an attorney regarding the legal exposure. However, I will give you my opinion. Honestly, how could you allow corporate one-month rentals and not allow transient rentals? Both are very short term. In many years of managing apartments and condos, short-term leases were six month leases and nothing less was allowed because of the turnover expense to the owner. All corporate leases that were allowed, still required every occupant age 18 or over, to fill out an application and undergo a criminal background check and credit report. If you are going to allow corporate leases that aren’t too short-term, you could still require the criminal background and credit check at the very least. If a corporation balked at this type of screening, then think twice about doing business with them! These days, you can’t be too careful! You have a fiduciary responsibility to the owners that you manage the HOA for, to make every reasonable policy to help preserve the asset. How can you help preserve a property where the reputation has suffered because of violent acts against the residents or one where there are safety concerns? Of course you can’t promise safety or security, but making a diligent effort to help keep the property as safe as is possible, is what will help preserve the property in the long run. You have to ask yourself if this is a place where you would feel comfortable living if short-term rentals were allowed? Many corporate leases don’t ever tell you “who” is living in the corporate unit. Why take the word of someone with the corporation that they are all good people, or that they had to undergo a criminal background check before the company would hire them? That is what I see as allowing yourself or your management company to be put in a very liable position. If your HOA wants to allow a short-term rentals, everyone has to define what “short-term” is and how is that different from transient? Is the risk worth the reward? Also, we used to periodically change the gate code every three months, just so that if someone did get the code and had ill intent, they would not always have access to the property. Of course, the turnover in the apartments is higher than in condos so your HOA would have to decide how often is appropriate. Hopefully, the way that we handled this issue in the past, will help you in going forward. I wish all the best for you! 🙂

    • Gated communities are a false sense of community. It’s too easy for anyone to wait a minute and drive in behind someone else, plus how often are the gates broken and left open in every place I’ve seen? Gates around apartment communities are a big joke and people who believe they are any safer because of them are deluding themselves. All these arguments against airbnb are people that simply never thought to use it themselves and prefer to find negative things to complain about rather than think “Well hmm.. how can we make this work or benefit from this?”
      Air bnb tenants are BETTER than most any tenants you could ever get in a normal apartment because they have a reputation to maintain and they leave their spaces as clean as when they found them to not get a bad review. I’d gladly rent to them over random strangers that apply to rent my property directly PLUS AirBnB insures everything in your property for around $1,000,000 if anything should go wrong. Nothing beats that!

      • mm

        Don’t they rate the tenants just like the tenants rate the rental?

        • Of course as a Host you rate them and they rate you. You then get a chance for one reply back if they wrote something negative. Eventually you become a Super Host and get more perks. Airbnb gives people so much more control over their property. It brings much more value to the property too. You can also use Airbnb to pay for new additions and even extravagant ideas like Treehouses nice enough for guests to stay in. You have so many choices now for how to use our property. Now they have “Experiences” too which let us all become tour guides if we want to create a packaged experience of something we know a lot about in our cities and want to share them. It’s created all kinds of jobs for people with talent and knowledge about their cities.

  • I understand the concerns raised in this article and in several of the comments, and I think they are valid. However, I feel obliged to tell you my wife and I have used AirBnB five times in the last thirty months, and our experiences have been absolutely delightful. (None of our stays have been at condominiums.)
    We do not use AirBnB to save money on our vacations, we use it to get out of the “hotel districts” and into the neighborhoods where real people live. We have met very friendly hosts who have treated us as “new friends who are visiting briefly.” Frankly, these experiences have done a lot to restore my somewhat jaded view of human nature.
    An AirBnB host always writes a review of each guest. When that guest asks a second host to let him visit, the host has the opportunity to read the reviews before he says yes or no. (The guests write reviews of the hosts as well.) This gives a some measure of protection for hosts, guests, and next-door neighbors.
    Ken with RE/MAX