Coexistence with Airbnb May Be on the Horizon
By Les Shaver
This is the sixth article in Chief Executive Outlook, our series predicting industry trends in 2018.
Some CEOs do not want AirBnb in their buildings, but others could see scenarios where the online marketplace and hospitality service could coexist with apartments.
In 2017, Airbnb frequently found itself in the headlines. Whether it was litigation with Aimco or launching its own, new community in Orlando, the short-term rental provider was a steady disruptor.
Airbnb has come to some agreements with apartment operators such as Veritas Investments in San Francisco and Virtu Investment in Denver, which allow its residents to list their apartments on the website, however not all executives welcome Airbnb’s business model.
“We do not want AirBnB in our buildings,” says Greg Mutz, Chairman and CEO of AMLI Residential. “We are worried about [short-term guests] changing the culture and dynamic of the property and the amenities. We are a strong, ‘No’ on Airbnb. If our residents are caught listing their apartments on that site, their lease is terminated.”
Others see potential for the home-sharing service.
“I believe Airbnb will become part of the rental housing industry, but not until they can address the liability side of the equation, do a better job with qualifying and screening guests, have a legally binding relationship with the occupant and have its occupants better adhere to community rules,” says Jay Hiemenz, President and COO of Alliance Residential Company.
Ansel says management can take steps to maintain peaceful coexistence. For example, some put decibel meters into apartments to measure whether noise reaches inappropriate levels.
“I know folks who are doing things, such as allocating one floor of a community to Airbnb [to help create a buffer],” says Gables CEO Sue Ansel. “I think people will find a happy medium at some point.”
In high-cost markets, communities that allow Airbnb could have a competitive edge in luring residents who want the chance to earn extra income by subletting their apartments.
“We have to be open-minded because short-term rentals are becoming more popular,” says Ken Valach, CEO of Trammell Crow Residential (TCR). “As a firm, we need to figure out how to make it work.”
MAA CEO Eric Bolton says the Airbnb model is here to stay.
“It’s likely it will be accepted over time,” Bolton says. “It will be more prolific in the bigger coastal markets that tend to attract more tourism and more of a short-term resident profile. Given our footprint, we do not expect to see a significant amount of demand for that sort of rental need”
Read The Chief Executive Outlook Series: CEOs weigh in on Technology, CEOs Tackle the Labor Crisis, CEOs See Opportunities to Incorporate WeWork, Apartment CEOs Pick the Top Amenities for 2018 & Will Apartments Be Worth More in 2018?