Airbnb, Multifamily Owners and Managers Try to Open a Discussion

Posted on December 21, 2015

Representatives of home-sharing giant Airbnb addressed apartment experts and property managers at Optech, the annual conference held this November in San Diego by the National Multifamily Housing Council (NMHC).

“It’s only natural that we engage in these conversations,” says Chris Nulty, spokesperson for Airbnb, the website where every day thousands of people rent their homes and apartments to visitors who stay a few nights.

The apartment business, municipal officials and housing advocates are struggling to come to terms with the growing business. Some cities have considered banning home sharing. Apartment companies, meanwhile, are unsure whether companies like Airbnb represent a problem or an opportunity.

“The initial feedback we received from our members was that this was a problem… though the industry is surprisingly open to a discussion,” says Rick Haughey, vice president of industry technology initiatives for NMHC.

In fact, apartment complex landlords Equity Residential, Avalon Bay Communities and Camden Property Trust have reportedly been holding negotiations with Airbnb executives in recent weeks about an arrangement where they would allow tenants to rent out their units through the site as long as the landlords themselves got a cut of the profits.

Friend or foe?

Nevertheless, some property managers believe that Airbnb’s business violates the terms of their lease agreements with residents. Many leases forbid tenants from subletting their apartments to other renters. “There are members of our organization who believe renting an apartment out to someone else, bringing a stranger into the apartment community—that’s a lease violation,” says NMHC’s Haughey.

Airbnb claims that sharing a home through a site like Airbnb is very different than subletting an apartment. “Renting a place for a couple of days is different than signing a lease and collecting rent every month,” says Nulty. The matter has not yet been decided legally.

Housing officials also worry about home sharing websites. Some local laws explicitly prohibit apartment tenants from offering their homes for short-term rentals. Advocates for affordable housing worry that in cities where rental housing is scarce, apartments that would normally be offered as rentals may instead be offered throughout the year as informal, unregulated hotel rooms by investors who do not even live in the apartments themselves. That could make scarce rental apartments in prohibitively expensive markets even harder to find and afford.

Airbnb has released a “community compact” that lays out the ways that it wants to work with cities—especially those that suffer from a shortage of housing. “We are really focused on primary residents, in housing-constrained markets,” says Nulty.

The company is not planning to police itself. Different localities define “primary resident” in different ways. But as lawmakers in cities including New York and San Francisco consider regulating or restricting home sharing, Airbnb encourages these cities to write rules that leave room for primary residents to share their homes.

Safety first

Property managers have also worried that Airbnb allows people into their apartment communities who have not gone through the property managers’ own process to screen residents, which often includes full background checks. Airbnb’s promise to focus on “primary residents” may allay some of those fears. Primary residents are sharing their homes, including their furniture and appliances, when they rent their units through Airbnb. They are likely to be motivated to take care as they chose their visitors. The site gives hosts tools to help them decide who they allow into their homes, according to Airbnb.

Possible partnerships

While Airbnb is considering partnerships with property owners and managers, including potentially sharing revenue from fees, so far, the company has not announced anything formal. The company has, however, signaled its intention to negotiate by hiring a “Head of Landlord Partnerships,” Jaja Jackson.

To date, a few firms, including the Related Cos., have taken a firm stand against home sharing. In contrast, Equity Residential, AvalonBay Communities and Camden Residential Property Trust are reportedly negotiating with Airbnb over potential plans to share revenue.

Property owners and managers could also potentially negotiate with home sharing websites and their own residents about setting some limits to the practice.

“What if we are allowed to set how late people can arrive? How many days people can stay?” asks Haughey. “This is opening a discussion.”