US experts dismiss impact of Airbnb on housing market

Brexit. Donald Trump. David Bowie. 2016 has been a year of hotly debated subjects that reach around the world. One of the other controversial topics of conversation is Airbnb.

A growing number of cities are starting to clamp down upon the site, as well as other short-term rental services, due to concerns over the rise of the unregulated sector – and what its expansion means for supply and affordability. Berlin, Barcelona, Vancouver and New York are just some of the markets that have introduced tighter rules on the use of Airbnb by both homeowners and investors.

However, experts in the US generally appear unconcerned about the impact of short-term home renatals. A new survey from Zillow reveals that only 5 per cent said the sector, represented by sites such as Airbnb and HomeAway, has a large impact on housing affordability. Instead, half of the experts surveys said the impact is meaningful, but small, with over 40 per cent saying the impact is not meaningful.

Nonetheless, cities across the USA are debating the role short-term rentals play in housing affordability. One view suggests short-term rentals subtract from the supply of long-term rental homes and contribute to rising rents. Others argue short-term rental units give homeowners an additional source of income, allowing them to more easily afford a monthly mortgage payment.

“Cities across the country are grappling with housing affordability issues, especially in places with rapidly rising rents and home values,” says Zillow Chief Economist Dr. Svenja Gudell. “In some hot West Coast markets, it’s not uncommon for renters to spend 40 percent or more of their income on a monthly rental payment, when historically that number was much lower. Inventory plays a large role in this affordability crisis; there simply aren’t enough rentals on the market to keep prices low. Clearly experts aren’t convinced that short-term rentals are the cause of our problem.”

Only 7 percent of homeowners rent out, or are planning to rent out, all or a portion of their primary residence, according to the Zillow Group Report on Consumer Housing Trends.

Overall, the experts surveyed – which include economists and researchers — said they expect home price appreciation to be at almost 5 per cent by the end of 2016, and slow down to 3.6 per cent by the end of 2017. Zillow forecasts rents across the US to appreciate 1.6 per cent from October 2016 to October 2017.

 

Airbnb sues New York as another city cracks down on short-term lets

29th October 2016

Airbnb is suing New York, following legislation by the city to crack down on illegal short-term lets.

The flat-sharing website has been one of the rapidly rising stars of the web in recent years, bringing the sharing economy mentality that has fuelled companies such as Uber to the travel accommodation sector. However, the largely unregulated service it offers has sparked controversy among other sectors, from the more regulated hotel industry to officials concerned about housing supply in crowded cities where affordability is already a problem.

In the last year, Barcelona, Berlin and more have sought to tighten regulations surrounding short-term lettings, generally in the form of a register that requires people to sign up for renting their home out, subject to specific conditions. In the last week, New York has joined the club, signing into a law that was first passed in June.

There are already restrictions in place upon renting out certain housing in the city – most apartments cannot be rented out for less than 30 days – but while those doing so could have faced a hefty fine, the new legislation makes it illegal to advertise them on sites such as Airbnb.

Renting out a spare room, or one of two units, in a property remains legal for the company’s 46,000 hosts registered in the state. Nonetheless, Airbnb has filed a lawsuit against the city of New York, Attorney General Eric Schneiderman and Mayor Bill de Blasio, saying that the new law violates the company’s rights not to be held accountable for content published by its users.

The lawmakers, meanwhile, have countered that they had these rights in mind when drafting the new law, which imposes fines on the hosts responsible and not on the site itself.

 

Airbnb fights back against claims that it is driving up house prices

29th September 2016

Airbnb is fighting back against claims that it is driving up house prices in London, Vancouver and other cities.

The home-sharing website has boomed in recent years, but its rapid rise has also sparked a backlash from both the travel industry and property pundits. Indeed, the short-term rentals sector is in its infancy, compared to the more established hotel and B&B sector, which means that those offering temporary holiday accommodation are subject to far less regulation, whether that’s in terms of tax or health and safety.

As a result, the tourism industry has called for more regulation, while cities have also sought to deter people buying homes just to rent them out on Airbnb, theoretically exacerbating housing shortages in densely populated markets. Berlin, Barcelona, Andalusia and more now require people to register their homes before renting them on Airbnb, with fines in place for those who illegitimately use the site. Greece is also looking at introducing a tax on short-term rentals.

Olivier Grémillon, the Europe managing director of Airbnb, though, has spoken out against claims that rising London property prices are caused by its rental system.

“There have been a few studies done by academics which said no, it doesn’t really increase the price of housing,” he told the press today. “There is a housing shortage in London, [but] is it because of Airbnb? No. There are a lot of other reasons why prices are high.”

Indeed, the company regularly analyses data to determine how Airbnb affects local economies.

Research by the company found that in Vancouver, only 320 Airbnb hosts rent out their homes often enough to make money than they would from long-term renters – 0.11 per cent of the almost 300,000 housing units in the city.

“Just over 8,500 listings – about 3 per cent of the Vancouver housing stock – participating in occasional homesharing is not a material driver of housing prices,” concluded Airbnb’s head economist, Peter Coles, who wrote the report.

“We look into the data, we see if there [is] something there and if there is, we try to address [it], whether it’s on the tax side, whether it’s on the regulation [or] the communication of the regulation,” Grémillon told the UK media.

“The fact that it creates a reaction is normal, [but] I don’t think the regulation will be tightened or should be tightened,” he added.

 

Berlin estate agents welcome new court ruling on Airbnb ban

17th August 2016

Berlin’s initial ban on Airbnb-style rentals was based on concerns that such arrangements are limiting housing stock for locals and driving up rental prices.

The ban prevented home owners and tenants renting out entire apartments utilising portals like Airbnb, but allowed them to rent out single spare rooms to tourists.

Three complainants from Rostock in northern Germany, Italy and Denmark, who have second homes in the city, sought to challenge the ban, on the basis that they use their properties regularly and they have not been purchased solely as a buy-to-let investment. Ruling in their favour, the Court judgement added that there was no evidence of an abuse of the law by any of the complainants in wanting to rent out their homes while not in use. In this case, “private interest outweighs the public interest in keeping the properties vacant”.

This landmark decision, that renting out a second home – which would otherwise be left empty for certain periods – does not create a loss of living space, has huge implications for the international property market in Berlin.

The Airbnb ban has been controversial and many people have filed against it or ignored it, continuing to use sites like Airbnb to let their properties. Those advertising on such sites without proper authorisation faced fines of up to €100k. While the new ruling is not a complete overturn of the ban on Airbnb-style rentals it sets a precedent and paves the way for other people to use their second homes in the city in the same way.

Black Label Properties’ Relocations Consultant, Clive Gross, comments: “In terms of the availability of housing in the city, leaving a secondary home empty while the owner is away makes no sense, as these properties would not be available to long-term tenants in any case. The new court ruling appears to get the balance right between the City authorities’ attempts to reduce the number of properties being purchased simply to rent out to tourists and second home owners who want to create a small income from their properties when they are not using them.”

The City has taken several steps to retain its diversity and prevent it becoming like London and Paris with unaffordable rents in the city centre – including a cap on rental increases to no more than 10 per cent above local average – and the Airbnb ban is similar to measures introduced in other European cities, such as Barcelona.

Black Label Properties Co-owner Achim Amann adds: “We support measures that help keep our city affordable and diverse – that is one of the main reasons Berlin is so popular and so many people decide to move here each year. Unlike many other major European capital cities though, Berlin still has a huge amount of brownfield land suitable for development, and we work with many developers who are seeking to bring this type of land back into use.”

New York joins cities cracking down on Airbnb

29th June 2016

New York has joined a growing number of cities cracking down on Airbnb.

The city is planning to introduce legislation that would issue fines to those who rent their homes on a short-term basis without living in the property at the same time.

The bill, which has been approved by the state, awaits approval by the state governor, Andrew Cuomo. It marks a growing turn of tide against the flat-sharing website, which has seen a wave of people around the world taking to the web to rent out their homes directly to tourists.

New York already prohibits short-term rentals if the home is left absent by the owner, but Airbnb was not explicitly barred from the practice. The new law, though, would fine first-time offenders $1,000 for doing so, with repeat offenders potentially facing a fine of $7,500.

If follows similar laws introduced in Berlin and Iceland.

Mark Tanzer, chief executive of ABTA, speaking at its annual Travel Matters conference this week, said these moves are needed to reduce overcrowding and to level the playing field between Airbnb and traditional tourist accommodation, such as hotels and B&Bs.

“We’re not trying to stop it or throttle it or penalise it,” he is reported as saying by The Telegraph. “I think people are increasingly becoming aware that you can’t have a completely unregulated approach to the sharing economy whether it’s from a safety point of view or tax point of view.

“The big cities are starting to act.”

Berlin Airbnb ban is here to stay

10th June 2016

berlin-sign

Berlin’s Airbnb ban is officially here to stay, following a verdict in the city’s court that rejected a legal challenge to the rule.

Four property managers jointly lodged the first legal complaint against the ban, which came into force from 1st May 2016.

The ban (“Zweckentfremdungsverbot”) requires people letting more than half of their apartment on a short-term basis on sites such as Airbnb must register first for a licence. Landlords can still let out individual rooms,if they use at least half of the apartment for themselves. They can also swap apartments for a period of time with another apartment owner. Otherwise, without a permit, they could be fined up to €100,000.

The Guardian, meanwhile, reports that officials plan to reject 95 per cent of permit requests, with a site even set up to anonymously report other people using Airbnb illegally.

The ruling comes as a growing number of cities are becoming concerned about Airbnb’s rising popularity, because of housing supply or the site’s impact upon the traditional hotel and tourist accommodation industry. Indeed, Airbnb is already facing opposition in Barcelona and Paris. Will any other cities follow?

The court’s verdict was attributed to the need for short-term holiday apartments to be used for the city’s normal rental market, which is placed under increasing strain, thanks to a population that grew 80,000 in 2015.

Rautgundis Schneidereit told the newspaper: “The availability of affordable housing is severely threatened in the entire city of Berlin and the regulation therefore justified.”

Berliners banned from Airbnb

3rd May 2016

Berliners have been banned from listing their whole properties on Airbnb and other short-term holiday rental sites.

The new rule, which came into force on 1st May 2016, requires Berlin homeowners to hold a permit to rent out their whole partment to tourists.

Berliners can still rent out individual rooms in their property without a permit, but if they are found to be renting out their whole property without a permit, they can face a fine of up to €100,000.

The legislation was actually passed several years, as part of 2014’s Zweckentfremdungsverbot bill. It makes the German capital the latest in a string of cities to introduce specific laws governing the use of Airbnb, as the site becomes increasingly popular among homeowners seeking extra income and holidaymakers seeking cheap accommodation.

German officials worry that the trend will exacerbate the city’s limited property supply, with investors holding on to their homes to use for short-term lets, rather than selling them or housing long-term tenants. Indeed, Berlin saw ts rents rise 56 per cent between 2009 and 2014.

Andreas Geisel, Berlin’s head of urban development, calls it a “necessary and sensible instrument against the housing shortage in Berlin”.

A spokesperson for Airbnb told The Daily Mail: “Berlin’s housing law is complex and unclear, and the government has released conflicting and confusing statements on how it will be implemented. This is bad news for Berlin and regular locals who occasionally share their homes to afford living costs in the city they love.”

“We will continue to encourage the government to listen to the people of Berlin and follow the lead of other major cities that have introduced clear, simple and progressive rules to support regular local residents who share their homes to pay the bills,” added the company.

Indeed, a growing number of cities have rules relating to short-term tourist rentals in place. In Barcelona, homeowners most register to rent out their home to tourists, facing big fines if found to be listing an unregistered property on Airbnb.

London, however, has moved in the opposite direction, introducing a tax break in the 2016 Budget for those who rent properties out for up to three months a year, with no need for permits.

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