Should we worry about Airbnbs?

A recent study of Airbnb impacts on the District of Columbia is prompting legislators to crack down on the use of housing stock for commercial “tourist” rentals.

The growth of the commercial STR [short-term rental] market has serious negative implications for housing affordability and quality of life for D.C. residents. While the District grapples with a serious housing affordability crisis, the widespread conversion of residential units into short-term rentals makes it even harder for families to find affordable places to live. Commercial short-term rental operations may be pushing steeper rent increases across the District. Moreover, regulators have not exercised enforcement of health, safety, zoning, and rental housing laws on short-term rentals.

Read the D.C. Study

San Francisco is also trying to manage the housing impacts of short-term rentals. In 2015 and 2016, San Francisco rolled out rules requiring that all short-term rental hosts register with the City. In addition, hosts may only rent out their permanent residence, an entire home may not be rented out for more than 90 days per year, and no one may rent out more than one unit. Despite those rules, the city found that 75 percent of short-term rental hosts continued to operate illegally. Under a recent legal settlement with San Francisco, two major short-term rental companies, Airbnb and Home-Away, will actively participate in monitoring and enforcing the registration requirement.

While of course Palo Alto is not D.C. or San Francisco, the D.C. study shines light on concerns shared by many Palo Alto residents and San Francisco’s experience provides insights into the feasibility of various controls. As we confront our own housing affordability crisis, shouldn’t Palo Alto be asking the same questions?

  • To what extent are short-term rentals impacting the availability of housing units for residential use?
  • Is the short-term rental market contributing to higher residential rents?
  • Will new in-law/granny units be used for housing or vacation rentals?
  • Are hosts renting out their primary residences or serving as property managers for multiple units?
  • What is the impact of a growing short-term rental market on Palo Alto’s quality of life?

A search of Airbnb’s website on July 22, 2017, showed 306, “entire-home” Airbnb listings in Palo Alto. The average price per night for an Airbnb home in Palo Alto:

  • Zero or more bedrooms = $276
  • One or more bedrooms = $306
  • Two or more bedrooms = $402
  • Three or more bedrooms the average price jumps to $600 per night.

Click here for Airbnb data for Palo Alto and East Palo Alto by analytics firm AIRDNA

Visit our Check the Facts page for more info to put Palo Alto’s challenges into context.

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