Airbnb rentals trigger debate over housing stock

A woman browsed Airbnb. JOHN MACDOUGALL/AFP/Getty Images

Airbnb Inc. made a large slice of its money in the Boston area from properties that were rented for six months or longer in the past year, dwarfing the earnings of small-time casual hosts who are the face of the $30 billion online rental service’s lobbying campaign in Massachusetts, data released by the company show.

Data provided to the Globe show that just over 10 percent of
Airbnb rentals in Boston, Cambridge, and Somerville were occupied by renters for a total of six months or more over a 12-month period through August, but generated 37 percent of revenue paid to Airbnb hosts in that period.

That money was generated by a small rental pool: 766 units, split about evenly between private rooms and entire homes or apartments.
Airbnb didn’t identify the individual units, and it’s unclear how many were already short-term rentals before the listing service came along.

Airbnb did say some fraction of those units were likely boutique hotels or bed-and-breakfast inns, rather than residential homes. The company collects a percentage of each rental, both from the host and the renter.

Still, some local lawmakers have raised concerns that Airbnb and similar services are helping property owners remove permanent housing from an already tight market and disrupting residential neighborhoods.

“When units are being used as virtual hotels, it hurts the housing stock,” said Aaron Michlewitz, a state representative from Boston who has proposed new regulations. “It’s not the only reason, but it’s certainly one of the spokes on the wheel of the housing crisis we have here.”

The Legislature considered several measures targeting Airbnb in its most recent session, including one to impose hotel taxes on its rentals, but those failed to pass. House Speaker Robert DeLeo said this week that taxing and regulating short-term rentals was one of the key issues lawmakers would tackle in the new legislative session that begins in January.

“We’re going to have to get some regulations,” DeLeo said. “Something like this just can’t operate in a vacuum.”

Airbnb has said it is willing to collect hotel taxes on its rentals, and also signaled a willingness to accept some new regulations — so long as they do not deter casual hosts from renting out their homes.

And with the new session just a few months off, Airbnb is trying to soften up legislators with a campaign that includes new television commercials in the Boston area, highlighting everyday homeowners who make extra money renting out their homes.

“It gives us that little income that’s going to keep the city, for us, affordable. For the working people,” a woman named Sherry, whom Airbnb identified as a teacher in Cambridge, says in one ad.

Airbnb said it has supported regulations adopted in other cities, including limits on the length of certain types of rentals and registration for higher-volume properties. But it also doesn’t want legislators adopting rules that would treat professional landlords the same as casual hosts.

“There are certainly difficult issues, and we’re not trying to avoid them,” Airbnb co-founder Nathan Blecharczyk said recently. “But we are asking that we have a conversation about them, so that we can come up with innovative solutions and not simply do things as they were once done, because that will stifle this new economy that’s emerging.”

The company’s data show its largest pool of properties in the Boston area — 4,170 entire homes, private rooms, or shared rooms — were rented for fewer than 31 days in the past year. Those units accounted for 9.7 percent of Airbnb hosts’ rental revenue.

Airbnb also said that a large majority of its Boston hosts “are sharing their primary residence a few days each month and typically make $6,400 in supplemental income each year.”

Asked about possible steps to help protect housing stock, the company pointed to cities such as Philadelphia, where hosts must get a permit if the property is listed for more than 90 days per year, and San Jose, CA, which has placed a 180-day limit on renting out a home when the resident is not there.

Those local rules are part of a surge in scrutiny from regulators around the country, who are taking notice of Airbnb’s increasing presence and its possible effects on the housing market and the hotel industry.

This summer, US Senator Elizabeth Warren and two Senate colleagues asked the Federal Trade Commission to investigate whether commercial users on sites like Airbnb are “taking housing inventory off the market and driving up the cost of rent.”

Boston officials are studying the issue and have requested data from Airbnb about its rental hosts. The Cambridge City Council is considering new regulations that could require hosts to live in the building where they’re renting a unit, aiming to restrict absentee landlords from running short-term rentals in the city.

The hotel industry has also been lobbying the issue, saying the lack of rules for Airbnb and similar services is unfair to competitors and potentially unsafe for consumers.

Paul J. Sacco, chief executive of the Massachusetts Lodging Association, said traditional hotels are not trying to stifle competition. But he said properties rented through Airbnb should have to meet some minimum standards, such as maintaining fire safety equipment and complying with federal standards for accommodating disabled people.

“This is big business, and they need to step up to the plate and pay their fair share of taxes and be regulated,” Sacco said. “I’m not even suggesting they should have the same stringent rules and regulations that lodging establishments have. I’m suggesting they have something.”

Airbnb will likely be ready. Since 2015, its first year of filing lobbying reports with the state, Airbnb has paid more than $100,000 for law firm Nutter McClennen & Fish to argue its case with state officials.

“We’re building a long-term, sustainable business, and so our relationship with government is going to be critical,” Blecharczyk said after a speech at high school alma mater, Boston Latin Academy, earlier in October. “I don’t want the narrative to be that because what we’re doing is new, that it’s somehow in conflict with cities.”