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Allow Airbnb? Some Residents Say ‘No’

Airbnb

When the apartment industry was introduced to the idea of working with Airbnb during a November industry conference, attendees voiced strong opinions from both sides about having such a relationship with the short-term housing rental site.

Melanie French, Executive Vice President, Operations at Cortland Partners in Atlanta, was among those who challenged the room of about 150 attendees to consider the possible benefits that such an arrangement could have for both apartment operators and residents.

Speaking on behalf of Airbnb, its Vice President of Landlord Relations JaJa Jackson shared basic concepts about how the arrangement could work during last fall's NMHC OpTech Conference.

An ongoing topic among apartment industry professionals ever since, Cortland Partners decided to ask its residents about how they feel about allowing short term rentals at their communities. In January, Vice President, Resident Experience, Brian Ericson, sent a six-question online survey to more than 14,000 Cortland Partners residents and received 1,153 responses.

The company, which operates nearly 35,000 units in 95 communities, primarily in the Southeast, Texas, and Ohio, learned that 43 percent of residents surveyed are “strongly” opposed to allowing Airbnb rentals, compared to only 12 percent who “strongly” support Airbnb rentals.

In total, 52 percent are opposed to Airbnb rentals, compared to only 18 percent who are in favor; 30 percent of respondents were measured as neutral. The survey also showed that by allowing its residents to become Airbnb “hosts” it could negatively affect retention rates.

“[In November], my first thought was that this is a popular travel website that some residents at high-end communities are already using,” French says. “Airbnb is here to stay, so what can we do to get out ahead of it and set guidelines while also driving revenue? Instead of fighting it, would this be something we should try?

“We thought about experimenting by offering it in a few designated units--much like corporate housing--versus simply opening it up to all residents. But our understanding is that Airbnb’s system doesn’t work like that right now with apartment communities. We were not able to block some units in a community and only allow specific ones we controlled.”

The survey results provided Cortland Partners with a good starting point about what its residents value and what is important to them in their home community. Based on the survey’s results, Cortland Partners will continue to watch and closely monitor multifamily relationships with Airbnb, but has no plans to allow residents to lease their homes or rooms in their homes at this time.

Airbnb Violates the Lease

French says her company regularly monitors Airbnb to see if residents are advertising their apartments on the site The standard apartment lease forbids residents from subletting their apartments or from operating a business from within their apartment. Typically, Airbnb hosts
sublet their housing unit for one night, a weekend, or a few days which technically violates the lease agreement.

“We’ve terminated the leases of residents who are hosting their apartment on Airbnb,” French says. “While infrequent, we have discovered at least one resident who had rented two apartments in one building, with the sole intention of using these as a business by advertising on the Airbnb site.”

As mentioned by many who attended the November conference and who have commented since, one primary concern about Airbnb “guests” is that they lack background checks or credit checks. Jackson said in November that Airbnb will not and cannot guarantee that 100 percent of guests will be screened per the Fair Credit Reporting Act (FCRA).

Jackson touted Airbnb current process--a five-step algorithm process requiring the input of guests’ or hosts’ name, email address, photo and other forms of identification--as a better alternative. Based on the company’s track record, bad incidents are uniquely rare, he says.

French says that this aspect will continue to be a concern for reputable management companies who run background checks as a part of the screening and approval process for new residents. Survey comments from some Cortland Partners residents confirm that these residents care who their neighbors are and find comfort in knowing that all residents go through a screening process. They do not want to live adjacent to a unit where they never know who is living in the home next door.

Nearly Half Unfamiliar With Airbnb

French says the survey shed interesting light on the subject of short-term rentals, in general. It indicated that Airbnb is relatively unknown with Cortland Partners’ resident base, despite the media hype—44 percent of residents say they are “not familiar at all” with Airbnb, and 87 percent have never used Airbnb.

The survey revealed that less than 1 percent (seven respondents) have been Airbnb hosts and only 5 percent indicated they would be “very likely” to become an Airbnb host if that was an option in their community compared to 68 percent who said they were “not likely at all.”

The survey showed that more than half of residents (55 percent) reported they would be “less likely” to renew if Airbnb rentals were specifically permitted, including 39 percent who would be “significantly less likely.” By comparison, only 9 percent would be “more likely to renew” as a result. The retention information was most concerning to Ericson.

Similarly and surprisingly, Ericson says, “Even those who have previously used Airbnb as travelers (13 percent; or 146 residents) had largely negative feelings about Airbnb in their communities; 43 percent of this ‘Airbnb User’ group were opposed to Airbnb rentals, and 43 reported that they would be less likely to renew.”