Evidence is emerging that the ‘Airbnb effect’ on travelling is driving up property prices and breaking up neighbourhoods in globally attractive CBDs. But it seems to be a ‘win’ for customers/travellers and probably for businesses, if not for governments. What should we do? Let’s look at the different perspectives on this ‘Airbnb Effect’.
The Renter’s View: cheaper prices, great locations, personal feel
When I was involved in renting an apartment through Airbnb in Berlin this year, it was a first for me, because I’m a late technology adopter. And the experience was very mixed indeed! When we met the landlord, after an enthusiastic welcome, she insisted that we make ‘No Noise’ after 10pm, because the neighbours had complained. So there we were – seven OAPs (Old Age Pensioners) as our German guide semi-jokingly referred to us as – experienced, senior business people from five different countries on our annual global get together, being asked to keep the noise down. We were shocked. We’d paid our money. We wanted to have our (talking and drinking) fun!
We paid an exorbitant total price but a good price per person for our 4BR apartment. It was pretty basic frankly (said to be for 10 people, 7 was already a squeeze), it was a bit hip/cool (whatever the current terms are) in design and in a great location in a semi-suburban area. I had a single bed – not what I would get in a hotel – the furniture was uncomfortable, the lighting poor. But we were all in the one place, the landlord was friendly, welcoming and personal.
The Landlord’s View: high investment returns
We calculated the landlord would be making an enormous return from a year of Airbnb renting, compared with a regular long term rental. No wonder she was so friendly. All she had to do was present the place well on Airbnb, keep renters and surrounding neighbours reasonably happy and count the money.
The Surrounding Neighbours’ Views: reduced sense of community; disturbed routines
Clearly they were not happy, from the warning we were given. Indeed, on the second night we had a knock on the door and were warned that we were too loud for the babies upstairs – this at 9pm! (Strange thing is, we couldn’t sleep very well because the people living in the apartment above walked around heavily all night, while those in the courtyard outside our window talked at all hours as they used their bicycles. They complained about us/Airbnb…but we complained that we were the ones who couldn’t sleep!)
Other Airbnb Effects: more travellers; higher property prices; different user types; less tax paid
Zanderzee argued recently in The Guardian Australia that Airbnb had driven up property prices in Amsterdam, Berlin and other attractive cities, making it unaffordable for young families. Our Amsterdam friends agreed. To get a bigger house, they will have to move to another city! Clearly high Airbnb rents enable short-term tourists to outcompete long term residents and create a different market.
Zanderzee also argued that having a large percentage of tourists in buildings and locations reduced the sense of community. Friends in a Melbourne apartment building corroborated this, particularly about apartments being used for wild parties by young groups on weekends.
Another effect – which most of us don’t really want to address – is that Airbnb seems to be a significant tax avoider, like most of the new tech and disrupter organisations. As a renter and perhaps as a landlord, this is ‘good’ as it keeps prices low, but it isn’t really fair. Should I support an organisation which I know doesn’t pay its fair share of taxes?
From Airbnb to Fairbnb?
The Airbnb phenomenon won’t go away. It ticks lots of boxes with lots of people. But there are losers. So how to ‘manage’ it?
One key is to regulate Airbnb subletting. Local governments need to know how many locations are renting out their places and find a way to set a reasonable limit on this, so that the number of tourists accommodated in the area is known and managed. Licensing particular buildings (and not licensing others) or licensing a ratio per building could work (but what if your apartment missed out on the ratio…?)
Another key is addressing the tax issue. Many landlords are not declaring the income, so it becomes tax free, cheaper, more in demand and much more valuable. Governments need to find a way to normalise/legalise Airbnb without being heavy-handed. Will Airbnb (and landlords) become fair-minded and realise that, as business operators, they should be fair tax payers, rather than tax avoiders.
All my friends use Airbnb, but my travel is to visit and stay with friends, so I don’t have the same need. I’m sure though that I will seek out Airbnb again. I hope next time though that we OAPs are able to enjoy ourselves as mature adults and not be treated as children.