Air BnB

[englishteacheralex]

Neat post today about a young woman who made a mint hustling through Air BnB. I always admire a good hustle.

But...Air BnB is very controversial where I am, here in Hawaii. In HCOLs Air BnB is often considered a scourge that reduces affordable housing options for renters and increases undesirable transient populations (i.e. tourists, which are great for the economy but pretty terrible for most other things).

I have two friends who own houses in Kailua, a gorgeous beach community that is not zoned for hotels and has made short term rentals illegal. Both friends have rental units attached to their houses. One of the friends made a mint off AirBnB for six months, until a sting operation fined them and they turned the rental into a long-term situation (they were very sad about that because it was not as profitable, and they loved the hospitality aspect of the enterprise). The other friend was too wary of being fined and never even tried to do AirBnB, although it certainly would have been hugely profitable compared to the long term tenants they have.

I lived in Kailua for eleven years, starting in 2003, and was finally forced out by the skyrocketing rent. I wound up buying a relatively inexpensive condo in a neighborhood that has no tourist appeal whatsoever and that would be an extremely tough sell on Air BnB. I have to say I'm fairly resentful of Air BnB, although I LOVE using it on vacation, which I realize just adds to the problem.

I haven't seen many comments on the blog post acknowledging the controversial nature of this hustle! Any opinions that, like mine, are a bit skeptical and irritated about lauding someone making a mint off Air BnB? Or am I just a grouchy troll...?

[calimom]

I think Airbnb is a very shades-of-gray enterprise. Agreed, when you hear stories of one person or entity taking multiple apartments off the market in high-demand cities like San Francisco or New York, depriving actual residences of the cities housing, it's not so great. And not so great for the neighbors who often contend with boorish, loud tourists. If they wanted to live in a hotel, they likely would've moved into a Marriott :p

And I think for some travelers it is really a great thing. Getting to experience "living" in an area, as opposed to a sterile hotel experience. It can be awfully nice to have kitchen access and avoid restaurant food all the time. There are lots of options for singles and groups of people. For a homeowner, like your Kailua friends, having the host experience and being able to make additional money is a pretty sweet mix.

A few months ago I stay with my children and another family with kids in an Airbnb in a destination halfway between our homes. The house had a nice kitchen (we prepared all our own meals), a swimming pool, kid rooms, more grown up rooms, lots of games and books. There was Netflix but no one turned the TV on the whole visit. We realized it was the regular home of a mom with kids; they simply move out for a week or weekend when there are guests. Boyfriend? Family? Cheap motel? Who knows. But it probably helps her stay in her house, so it's pretty hard to find fault. While (I'd like to think) our group was relatively quiet and easy on the house and neighborhood, it would not be a stretch to imagine a group of loud partiers in the pool all night, or leaving a mess. People can find their way around reviews and recommendations.

It just doesn't seem like any one thing with Airbnb, like Uber. There really are plusses and minuses depending on how you're looking at it.

[Raenia]

This article bothered me quite a bit, for many of the same reasons already mentioned.  In addition, they completely glossed over the illegality of what she was doing in the beginning.  In particular, this line:

So some of this stuff (renting out rooms from within a rented apartment) is a gray area.

Um, no, that's not a grey area - that's illegal.  She broke the terms of her lease, as she found out when she was kicked out for it.  It didn't "turn out" to be a violation of lease policy, most leases explicitly state that subletting is not allowed without prior written approval.  I've never seen a lease that didn't explicitly address subletting.  So, she either didn't read the terms of the lease she signed, didn't bother to ask about a clause she didn't fully understand, or didn't feel she had to abide by the legal document she signed.  Seriously?  She's lucky the landlord didn't sue her for the income she was making off his property without authorization.  Additionally, depending on the local laws where she was, she was probably breaking zoning laws by running a business out of a non-commercial property (AirBnB is on the edge here, but running a massage practice out of your living room almost certainly counts).  In fact, it's possibly she's still in violation of local zoning laws by using what are zoned as single family homes as short-term rentals/hotels.

I'm all for entrepreneurial spirit and side-hustling, but let's try to keep it within the law here.

[englishteacheralex]

This article bothered me quite a bit, for many of the same reasons already mentioned.  In addition, they completely glossed over the illegality of what she was doing in the beginning.  In particular, this line:

So some of this stuff (renting out rooms from within a rented apartment) is a gray area.

Um, no, that's not a grey area - that's illegal.  She broke the terms of her lease, as she found out when she was kicked out for it.  It didn't "turn out" to be a violation of lease policy, most leases explicitly state that subletting is not allowed without prior written approval.  I've never seen a lease that didn't explicitly address subletting.  So, she either didn't read the terms of the lease she signed, didn't bother to ask about a clause she didn't fully understand, or didn't feel she had to abide by the legal document she signed.  Seriously?  She's lucky the landlord didn't sue her for the income she was making off his property without authorization.  Additionally, depending on the local laws where she was, she was probably breaking zoning laws by running a business out of a non-commercial property (AirBnB is on the edge here, but running a massage practice out of your living room almost certainly counts).  In fact, it's possibly she's still in violation of local zoning laws by using what are zoned as single family homes as short-term rentals/hotels.

I'm all for entrepreneurial spirit and side-hustling, but let's try to keep it within the law here.

YES! That bothered me a lot, too. Nobody pointed that out in the comments when I read the post yesterday. I was reading along, thinking...yeah, that's great that she worked so hard and had such a great attitude, but she totally screwed that landlord over! I'm kind of a pinko commie, and something about the "sharing economy" tends to get me very angry when I read about it anywhere.

It just seems like this glossed over, great-sounding term that actually means companies that employ people are looking for ways not to compensate them fairly or take care of them in a humane way (Uber!), and the lack of full-time, fair-wage employment seems to encourage people people scrambling and hustling at employment opportunities that aren't ideal or strictly ethical for their communities (Air BnB!)

There's a reason zoning laws exist...

[WoodStache]

I don't think people should break the rules of their lease or local laws for their city/state. Her success story was surprising to see in that regard.

But I don't find anything morally wrong or unjust about AirBnB as a whole. There's a subset of people that find the idea of land lording at all as morally unjust and I think this type of thinking goes down that path. Not to sound too callous, but I don't think it's any individual's concern if their rentals raise the overall market.

If a city decides as a group to make it illegal then people should abide by that.

[tooqk4u22]

Breaking rules.  Effectively utilizing/leveraging another persons assets to create gain for yourself and potential liability for the landlord is not a fair game unless the landlord has consented to it, and in some cases they do. 

I applaud the creativity and effort but it is not representative of a true FIREe as it sounds like she has CF with limited effort now but little assets so if the rules/landlords catch up with her it could end her.   If they really wanted to the could sue her or fine her for everything she earned off of the rentals, but it is easier just to evict and terminate the lease.

This shouldn't be promoted and a I am surprised and disappointed that MMM didn't call attention to this and worse he added a referral link....somewhat of a monetization whore approach I guess and that is what blogs are for.

This article bothered me quite a bit, for many of the same reasons already mentioned.  In addition, they completely glossed over the illegality of what she was doing in the beginning.  In particular, this line:

So some of this stuff (renting out rooms from within a rented apartment) is a gray area.

Um, no, that's not a grey area - that's illegal.  She broke the terms of her lease, as she found out when she was kicked out for it.  It didn't "turn out" to be a violation of lease policy, most leases explicitly state that subletting is not allowed without prior written approval.  I've never seen a lease that didn't explicitly address subletting.  So, she either didn't read the terms of the lease she signed, didn't bother to ask about a clause she didn't fully understand, or didn't feel she had to abide by the legal document she signed.  Seriously?  She's lucky the landlord didn't sue her for the income she was making off his property without authorization.  Additionally, depending on the local laws where she was, she was probably breaking zoning laws by running a business out of a non-commercial property (AirBnB is on the edge here, but running a massage practice out of your living room almost certainly counts).  In fact, it's possibly she's still in violation of local zoning laws by using what are zoned as single family homes as short-term rentals/hotels.

I'm all for entrepreneurial spirit and side-hustling, but let's try to keep it within the law here.

It just seems like this glossed over, great-sounding term that actually means companies that employ people are looking for ways not to compensate them fairly or take care of them in a humane way (Uber!), and the lack of full-time, fair-wage employment seems to encourage people people scrambling and hustling at employment opportunities that aren't ideal or strictly ethical for their communities (Air BnB!)

There's a reason zoning laws exist...

I think it has evolved to that but that's all a function of its success.  Uber and AirBbB were founded more as a way to make some extra money by monetizing a idle asset and not strictly as means to provide full time predictable income.   Think Uber....its one thing to be going from your house to the library and picking someone up along the way and similar route vs. picking up people anywhere anytime for a fee (sounds a lot like a taxi). 

[K-ice]

If you want an example of AirBnB shadiness what if you are a politician, rent an apartment near your place of work, get a housing allowance refund from the government for that rental, and then turn around and rent it out when you are not there?

http://edmontonjournal.com/news/politics/finance-critic-derek-fildebrandt-rents-downtown-digs-on-airbnb-while-claiming-housing-allowance

Fun story! 

I do find AirBnB a good concept but I haven't yet used it as a visitor or landlord.

[WoodStache]

If you want an example of AirBnB shadiness what if you are a politician, rent an apartment near your place of work, get a housing allowance refund from the government for that rental, and then turn around and rent it out when you are not there?

http://edmontonjournal.com/news/politics/finance-critic-derek-fildebrandt-rents-downtown-digs-on-airbnb-while-claiming-housing-allowance

Fun story! 

I do find AirBnB a good concept but I haven't yet used it as a visitor or landlord.

I guess I'm not sure I have a problem with that.

If my job gave me a car allowance I don't think there would be anything unethical about offering it on a ride sharing site on the weekends. This to me sounds like the same thing.

[KelStache]

If you want an example of AirBnB shadiness what if you are a politician, rent an apartment near your place of work, get a housing allowance refund from the government for that rental, and then turn around and rent it out when you are not there?

http://edmontonjournal.com/news/politics/finance-critic-derek-fildebrandt-rents-downtown-digs-on-airbnb-while-claiming-housing-allowance

Fun story! 

I do find AirBnB a good concept but I haven't yet used it as a visitor or landlord.

I guess I'm not sure I have a problem with that.

If my job gave me a car allowance I don't think there would be anything unethical about offering it on a ride sharing site on the weekends. This to me sounds like the same thing.

I don't even like this guy, but I have no problem with it either.  I don't know why people are freaking out about it.  A housing refund is part of his salary, and allows him to have a residence near his work.  It's still *his* home, and I think he should be allowed to do whatever he wants with it.  Hypothetically if he made his adult children who live with him pay rent is that unethical?

[K-ice]

If you want an example of AirBnB shadiness what if you are a politician, rent an apartment near your place of work, get a housing allowance refund from the government for that rental, and then turn around and rent it out when you are not there?

http://edmontonjournal.com/news/politics/finance-critic-derek-fildebrandt-rents-downtown-digs-on-airbnb-while-claiming-housing-allowance

Fun story! 

I do find AirBnB a good concept but I haven't yet used it as a visitor or landlord.

I guess I'm not sure I have a problem with that.

If my job gave me a car allowance I don't think there would be anything unethical about offering it on a ride sharing site on the weekends. This to me sounds like the same thing.

I don't even like this guy, but I have no problem with it either.  I don't know why people are freaking out about it.  A housing refund is part of his salary, and allows him to have a residence near his work.  It's still *his* home, and I think he should be allowed to do whatever he wants with it.  Hypothetically if he made his adult children who live with him pay rent is that unethical?

Both of these are a fine line. With your own car I don't see a big problem because on weekends you are only hurting your long term resale value by adding miles. If it is a company car that would be a problem.

For the apartment let's say you rent a place for $1000, have a roommate who pays $500, and you claim expenses of $1000.  I have a problem with that & this is basically what he did. If he were to rent out his own house in his home town I see less of an issue.

The allowance is not a flat amount, like a per-diem, and you decide how to frugally spend it. It is to cover actual expenses to a max.

[Linea_Norway]

In Norway there was just an article on the news about a small village at the coast in the far north. People from eastern Europe have been buying up houses for good prices and rent them out in the summer through airBnB. They advertise with fishing trips. Every day they take their customers fishing in a boat, catching a great lot of fish. The guests bring all their food and beer from home. The local shop doesn't earn a cent. The houses are not used for half the year. And the housing prices have been driven up so that local young people cannot afford to buy a house. Now the village want to introduce the rule that you need to live in your property yourself. This is a rule that many villages along the Norwegian south coast have had for years. I think "living there" is defined as living more than half the year in a place.

[SpreadsheetMan]

This article bothered me quite a bit, for many of the same reasons already mentioned.  In addition, they completely glossed over the illegality of what she was doing in the beginning.  In particular, this line:

So some of this stuff (renting out rooms from within a rented apartment) is a gray area.

Um, no, that's not a grey area - that's illegal.  She broke the terms of her lease, as she found out when she was kicked out for it.  It didn't "turn out" to be a violation of lease policy, most leases explicitly state that subletting is not allowed without prior written approval.  I've never seen a lease that didn't explicitly address subletting.  So, she either didn't read the terms of the lease she signed, didn't bother to ask about a clause she didn't fully understand, or didn't feel she had to abide by the legal document she signed.  Seriously?  She's lucky the landlord didn't sue her for the income she was making off his property without authorization.  Additionally, depending on the local laws where she was, she was probably breaking zoning laws by running a business out of a non-commercial property (AirBnB is on the edge here, but running a massage practice out of your living room almost certainly counts).  In fact, it's possibly she's still in violation of local zoning laws by using what are zoned as single family homes as short-term rentals/hotels.

I'm all for entrepreneurial spirit and side-hustling, but let's try to keep it within the law here.

YES! That bothered me a lot, too. Nobody pointed that out in the comments when I read the post yesterday. I was reading along, thinking...yeah, that's great that she worked so hard and had such a great attitude, but she totally screwed that landlord over! I'm kind of a pinko commie, and something about the "sharing economy" tends to get me very angry when I read about it anywhere.

It just seems like this glossed over, great-sounding term that actually means companies that employ people are looking for ways not to compensate them fairly or take care of them in a humane way (Uber!), and the lack of full-time, fair-wage employment seems to encourage people people scrambling and hustling at employment opportunities that aren't ideal or strictly ethical for their communities (Air BnB!)

There's a reason zoning laws exist...

Yes, I found that quite an uncomfortable article too. The "sharing economy" doesn't benefit everyone - apart from the platforms of course...

[fdhs_runner]

There's a reason zoning laws exist...

Sure, but after reading the book Happy City I have to question if it's a good reason.

[WoodStache]

Both of these are a fine line. With your own car I don't see a big problem because on weekends you are only hurting your long term resale value by adding miles. If it is a company car that would be a problem.

For the apartment let's say you rent a place for $1000, have a roommate who pays $500, and you claim expenses of $1000.  I have a problem with that & this is basically what he did. If he were to rent out his own house in his home town I see less of an issue.

The allowance is not a flat amount, like a per-diem, and you decide how to frugally spend it. It is to cover actual expenses to a max.

For any of these, I do not support breaking either local laws or company/private contracts, as I said before. But beyond that I just say do you. To me, you do incur $1,000 of expenses. Not net expenses/profit, but expenses nonetheless. The fact that you're giving up your sole use of the apartment in exchange for $500/mo is immaterial in my personal opinion.

That said, I wouldn't have done it were I the politician only because you have to realize the optics look bad, and optics is everything in his life.

[ariapluscat]

i think there's the landlord's concern about squatting beginning through an (unauthorized and largely un-vetted) airbnb rental. with things like this 90% of ppl are great and i've done airbnb. but one bad actor can get you in serious trouble and cost.

[domo]

I live in New Orleans and we have recently banned AirBnB in the French Quarter. I think placing restrictions on short-term rentals benefits the local rental market and protects the local hotel industry. Both of these things are good from a residential standpoint. Lots of people work downtown, but when AirBnB blew up they were forced to move further and further away, making traffic terrible and parking impossible to find. Hotels were unable to stay full even in the busy season, since AirBnBs didn't have to pay our expensive hotel taxes. People were laid off, apartments and condos were going for a million+, it was a bad scene. You can still rent out a room in your house, you just can't rent out an entire apartment or house in one small part of the city. In fact, once we are done with our renovations, we are thinking about renting out our guest bedroom.

I agree that being a decent member of your community should come before making money. There are lots of ways to make money. If you can't think of a way to make money that doesn't hurt your city, you lack imagination.

[plantingourpennies]

Some litigation in Canada about this topic-

https://www.cbc.ca/news/canada/toronto/condo-rentals-airbnb-investigation-1.4560076