Tag Archives: home sharing

SF’s Airbnboom

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Brian Johnson & Dane Kantner

The Christian Science Monitor quoted me in San Francisco Votes Down Airbnb Limits: Can Competing Interests Be Balanced? It reads, in part,

A defeated ballot measure in San Francisco, which would have imposed further restrictions on users of Airbnb and similar websites, is a sign of how the issue of short-term housing rentals is vexing city governments in the United States and beyond.

From Fort Lauderdale, Fla., to Los Angeles, lawmakers and residents alike are struggling to balance the power of technological change with the many critics of the home-sharing industry: homeowners who complain about deterioration in the quality of life in residential neighborhoods, hotels that fret about lost revenues, and activists who say that short-term housing is stripping the marketplace of affordable long-term units.

Yet even some of the trend’s most ardent critics suggest that more restrictions are not necessarily the answer. Better enforcement of current laws would go a long way toward balancing the conflicting interests, they say.

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On the other coast, just as many cities are struggling. New York City is still up in the air about how to handle the sharing economy, says Brooklyn Law School professor David Reiss, who has followed Airbnb’s evolution.

This week, Airbnb promised to provide detailed data to the New York City Council, he notes. “The company is doing this in part to fend off [legislation] that would severely limit their reach in NYC,” he says via e-mail. One piece of proposed legislation increases penalties for violations of existing laws, and another mandates that the city track illegal apartment conversions, according to Professor Reiss.

Still, the sharing economy is with us for the long term as consumers continue to vote with their wallets, he says. “The bottom line is that we are in a period of transition. And while it is unlikely that we will return to the pre-sharing economy, it is also unlikely that we will have a sharing economy that is driven just by market actors, without government regulation,” he adds.

Money on Airbnb

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I was quoted in Money magazine in an article about Airbnb, Thinking About Renting a Room to Travelers? Here’s What You Need to Know. The article reads, in part,

Of all the categories shaken up by the sharing economy, few are as transformed as lodging. For travelers, ditching the hotel for Airbnb can be a more affordable way to go. And on the flip side, offering your own home or apartment to vacationers can earn you cash—$100 to $150 a night on average, according to Airbnb, much more in some popular destinations.

That can be fairly easy money. Unless something goes wrong, in which case it can be a disaster. You need to protect yourself from legal and financial risks. Here’s what home sharers should know.

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Play It Safe

Don’t just rely on the home-sharing site’s standard insurance plan, because the coverage is generally too ambiguous, says David Reiss, research director for the Center for Urban Business Entrepreneurship at Brooklyn Law School. Your existing homeowners policy may cover you for a single rental of less than two weeks, but call to ask.

More than that and you’ll need to switch to a commercial policy, which covers paying guests and typically costs an additional $500 per year, says Scott Wolf of CBIZ Property & Casualty.

Or try home swapping. For a small annual fee, sites such as HomeLink and HomeExchange connect people who want to visit each other’s location; because no money changes hands, you may avoid tax and liability issues. Still, check with your insurer—and of course, you need to be extremely cautious about who you let into your house. As a rule, none of these sites conducts background checks, so do your own by Googling guests and searching their social media accounts.

“Five years from now, the laws and the insurance policies will have caught up with the sharing economy,” Reiss predicts. “For now, though, it boils down to how risk averse you are.”