Renting out your home –or a room in your home – to travellers is an idea that has really caught on. The hugely popular site Airbnb.com claims a million-plus listings in more thank 190 countries and 25,000,000+ guests. They also have over 160 castles for rent. But is Airbnb a short-term rental or a hotel alternative? And is the model accountable to the communities that host its listings?
The company is making huge profits – it’s been valuated by some at close to $20billion, and those listing their homes or properties are making great income, but not everyone is happy. Hotels don’t feel that Airbnb is fair competition. Airbnb is just a listing site, connecting property owners with people who would be interested in renting or sharing a property for a specified time. Airbnb gets a commission from every rental agreement. In Canada, property owners are not required to collect HST (income generated has to meet $30,000 threshold before HST collection is required). Property owners can charge whatever they want and are unregulated and uninspected – unlike the rigorous regulations hotels must follow.
But they’re not hotels.
Short-term rentals seem more the fit. But again, there are no regulations and no inspections. The potential renter has no idea whether the home meets safety codes, fire codes or health standards. There is no requirement to have management on site, for the benefit of guests or neighbours. Many condo boards and rental property managers do not want to see condos and apartments participate, concerned for the community that this may impact other residents negatively.
A recent report in the Toronto Star is just one example of the disturbance being created by Airbnb guests. With no regulation and no on-site management, noise complaints, parties and bad behaviour are difficult to manage. The neighbourhood has had to endure with parking congestion, garbage and disturbances throughout the night as one regularly rented residence brings to the quiet community a surprise with some of its guests, including a party of over 100 for a prom celebration. Other than police, there really isn’t any recourse for neighbours.
On the plus side, Airbnb is a budget friendly option that allows people to visit the city and live like locals, enjoying communities that may not be hotel friendly. And with extremely tight vacancy rates across Canada, short-term rentals are in short supply, making Airbnb a great solution for temporary stays.
The practice isn’t new. New York – with its famously insane rents – has long seen its residents rent out their apartment to visitors to supplement the rent. The idea for Airbnb actually started because the founders Nathan Blecharczyk, Brian Chesky and Joe Gebbia decided to make some extra money during a conference in San Francisco. With sold out hotels across the city they decided to rent out three air mattresses in their apartment – calling it Air Bed and Breakfast. With this level of organization, sublets and room-renting has become a definite income stream for some, with a host of sites like Airbnb – vrbo.com, tripadvisor.com and homeway.com