Connect with us

Business

Cities Tell Airbnb To Make Room For Affordable Housing

Published

on

[ad_1]

WASHINGTON — One of the most crowded and expensive cities in the country, D.C. is cracking down on the number and type of housing units that can be offered as short-term rentals, through companies like Airbnb, in the name of protecting affordable long-term housing.

New York did too, earlier this year, along with San Francisco and a host of other pricey cities that put new measures on the books recently. It’s the latest front in the battle between the short-term rental companies and their adversaries — hotels, traditional bed-and-breakfasts, labor unions and affordable housing advocates — that in the past largely focused on hospitality taxes.

Airbnb officials and representatives of short-term housing platforms argue that there’s room for all kinds of accommodations — short-term, long-term, traditional and innovative. But that coexistence is uneasy at best.

Hotels argue that Airbnb and similar operations cut into their business and compete unfairly because they don’t have to adhere to the same regulations regarding safety and commercial property.

Airbnb landlords complain that neighbors unfairly attack them as a nuisance while they are just running a nice little business. And, increasingly, affordable housing advocates worry that the short-term rentals are displacing long-term tenants.

There’s even a dispute between small “mom and pop” short-term landlords, who rent out a room in their basement or spare sleeping spot in their primary residences, and investors who may buy up premium properties in urban areas for the sole purpose of renting them out on a nightly basis.

Municipal officials are left trying to walk the line between the burgeoning short-term rental industry and competing constituencies. Short-term rentals have grown more than 80 percent over the past five years, worldwide. Traditional housing and hotel industries have struggled to adapt.

Consumers are caught in the crossfire, according to Christopher Elliott, head of Elliott Advocacy, a nonprofit based in Arizona that advises and advocates for consumers. Renters, he said, don’t usually ponder the impact their vacation stay is having on affordable housing.

“Most consumers don’t think about the effect of their rental when they are going somewhere. They are just looking for a cheap place to stay,” he said. “They don’t think about ‘who may I be displacing.’”

“There is still a market for both sides,” he said, referencing owner-occupied rentals and investment rentals. “I’m uncomfortable with the move toward professionalism on the Airbnb platform. These are actually not mom and pop, they are professionals who are using the Airbnb platforms. There is a much stronger argument to be made that they need to start playing ball with the affordable housing folks.”

The proposed D.C. ordinance under consideration this year is aimed at addressing that specific concern — the line between the professional renters and owner-occupied temporary rentals. It would outlaw renting second homes on a nightly basis and would limit homeowners who are absent from their residences to renting for 90 days or fewer a year, a practice known as a “vacation rental.”

Hosts at home would not be limited from renting a spare room. The council vote a couple of weeks ago was preliminary; a second vote is scheduled in November. The measure would not affect traditional long-term rentals.

U.S. home prices in June were at their least affordable level since 2008, according to ATTOM Data Solutions, a company that keeps track of property databases. In D.C., it takes an hourly wage of $34.50 to afford a two-bedroom rental home, according to the National Low Income Housing Coalition.

In New York City, a study this year from McGill University estimated, Airbnb and similar nightly rental companies increased long-term rents by 1.4 percent “over the last three years. This implies that the median renter household looking for a new apartment will pay $384 more per year because of Airbnb’s recent growth.”

Affordable housing advocates were out in force at the D.C. Council this week, backed by Unite Here union members in bright red T-shirts. Unions representing hospitality and hotel employees have been supporting the restrictions on Airbnb-type rentals, which they say cut into their business.

“It’s about affordable housing and middle-class jobs,” said John Boardman, executive secretary-treasurer of Unite Here Local 25, who led a rally outside the D.C. Council chambers in favor of the bill. “That’s what they are fighting for — the ability to live in this city.”

Troy Flanagan, vice president of government affairs and industry relations for the American Hotel and Lodging Association, said his group supports the D.C. bill and others like it.

“We think that it not only will level the playing field with these hosts that are essentially running illegal hotels, but also with other groups” like affordable housing, he said. He added that the coalition is made up of several constituencies, with the same target in mind — updating existing regulations governing the short-term rentals.

The travel industry research group Skift reported in July that worldwide short-term rentalsgrew more than 80 percent from $46 billion in sales in 2012 to $83 billion in 2017. In the same period, hotel rooms increased 27 percent, from $404 billion to $512 billion.

Affordable housing advocates also maintain that stocks of traditional rental housing are being hurt by the growing short-term rental market. The McGill report found that “Airbnb has removed between 7,000 and 13,500 units of housing from New York City’s long-term rental market.” The more Airbnbs in a city, the higher rents get for local residents.

Protesters gather in New York City, which joined the crackdown on short-term rentals to protect affordable housing for long-t


Frank Franklin II/The Associated Press

Protesters gather in New York City, which joined the crackdown on short-term rentals to protect affordable housing for long-term tenants.

But some supporters say they doubt that short-term rentals are having that much of an impact on affordable housing and traditional rentals.

“We’ve yet to see studies in any market that point to short-term rentals as a large factor in affordable housing issues,” said Matt Kiessling, vice president for short-term rental policy for the Travel Technology Association, which hosts and promotes short-term rental platforms such as Airbnb, and similar companies including VRBO and HomeAway.

He noted that affordable housing is a decades-old issue, particularly in urban areas, and that many factors affect it. “In all of these large urban cities, the number of short-term rentals is so minute,” he said, “that it’s really hard to look at a couple of thousand short-term rentals in a market and say this is having a meaningful impact on the millions of homes that make up that inventory.”

Kiessling said the restrictions on short-term rentals are more about protecting the hotel industry than they are about protecting urban neighborhoods.

Lauren Windsor, executive director of American Family Voices, a progressive national advocacy group that is part of the coalition calling for the D.C. restrictions, said her organization doesn’t claim that the short-term rentals are “causing the problem exclusively — it’s a complicated issue — but it’s exacerbating the issue across the country.”

“Do you list your own home? We’re good with that. That’s true home-sharing,” Windsor said. “But when you are running a commercial enterprise because this platform allows you to skirt the regulations of others in the lodging space — bed and breakfasts or the hotel industry — that’s not fair to the other players in the industry and not fair for residents of D.C. as well.”

Spreading Rules

New York City Mayor Bill de Blasio, a Democrat, in August signed a bill that requires short-term rental sites to provide city officials the names and addresses of hosts in the city. The new regulation is aimed at cracking down on people who rent out apartments and rooms when they are not on-site.

New York state law makes it illegal to rent out an apartment for fewer than 30 days unless the permanent resident is there. The new bill is aimed at enforcing that law.

A similar measure implemented this year in San Francisco cut the number of Airbnb-type listings by half, the San Francisco Chronicle reported.

Boston is putting together rules to take effect in January that would ban many rentals for more than 30 days and require owners to be registered. It is modeled on rules in nearby Cambridge, Massachusetts, that require short-term hosts to register with the city and limit rentals. But a dispute between the Democratically controlled Massachusetts Legislature and Gov. Charlie Baker, a Republican, is preventing new regulations from going into effect at the state level. The state law might pre-empt the city rules, also leaving them in limbo.

While states have been dipping a toe into the short-term rental industry, most regulation has come at the city and local level. New Orleans, Chicago and San Diego are implementing or considering regulations.

Meanwhile, Airbnb — which was founded in 2007 in San Francisco when two roommates, Brian Chesky and Joe Gebbia threw air mattresses on the floor and rented them out to friends — has expanded to a $31 billion company. Airbnb vigorously fights the regulations everywhere they are proposed.

“Airbnb was started to help [pay] the rent and we have made clear that we want to work with cities to address their specific concerns and craft smart rules that work,” Nick Papas, spokesman for Airbnb, said in an email.

D.C.’s chief financial officer, Jeffrey DeWitt, said the bill would cost the city about $100 million over four years because it will reduce the number of short-term rentals and revenue assessed on the booking services that host the rental sites. A dispute over those numbers this week delayed final action on the bill.

[ad_2]

Source link

قالب وردپرس

Business

11-Step Guide to Buying A House

Published

on

By

Purchasing a home is likely going to be one of the largest purchases you will make in your lifetime, which is why it is so important to follow the right steps when starting on your home-buying journey to ensure that the entire process goes smoothly from start to finish!

We’ve put together a step-by-step guide to buying a home, to help you get off on the right foot when it comes to buying a home. Click the download button below to download these steps in PDF form.

1. Decide to buy a home

Make sure you are ready both financially and emotionally!

2. Get Pre-Approved

Work with a mortgage broker or your bank. They will work with you on what you require to submit an application. Once approved, this will determine how much you can afford to spend on a home.

3. REALTOR® Consultation

Work with a RE/MAX agent to help guide you through the process. The right agent will discuss your price range, ideal locations, current market conditions and much more!

4. Start Your Search

Your REALTOR® will get you information on new homes that meet your criteria as soon as they’re listed. They’ll work with you and for you to ensure you find your dream home.

5. Current Market Conditions

Your experienced RE/MAX agent is a valuable resource as you consider different properties. They will be there when you have questions regarding the homes you’re interested in – they can tell you what is a good deal, and when to walk away.

6. Make an Offer

Your REALTOR® will help create your offer tailored to your needs including the right subject clauses down to the closing date that works best for you.

7. Negotiate

You may receive a counter offer but don’t be worried! RE/MAX agents will negotiate for you to ensure you get the best possible price for the house you love!

8. Accepted Offer

It’s crunch time! The next few weeks are busy as you need to schedule and remove every one of your subject clauses by the specified date. You’ll likely need to schedule an inspection, appraisal, financing approval, and several others. You will also need to provide a deposit to put down on the home. The deposit will be a pre-determined amount given in-trust to your REALTOR® to show the sellers you are committed to this home. Don’t worry, that money goes towards the purchase of said home if all goes well! This is a busy time but be sure to reach out to your RE/MAX agent if you have any questions or are unsure about next steps.

9. Subject Removal

Once you have completed all your subject clauses, and everything went smooth, it is time for you to sign on the dotted line and consider your new home to be yours (almost!).

10. Official Documents

You will need to provide your RE/MAX agent with your preferred lawyer or notary to have the official title transferred into your name. You will meet with the lawyer or notary in person to sign all the legal documents before you move in. This typically happens a few days before you take possession of your new home.

11. Move In!

Congratulations, you are officially a homeowner! The date pre-determined by you is your move-in day! You can now move into your new home. Your RE/MAX agent will be there ready and waiting to hand you the keys. Enjoy!

Continue Reading

Business

Know When to Rent ‘Em, Know When to Buy ‘Em

Published

on

By

We’re told it’s always better to buy than rent. Everyone—from our parents to the banks to the government—encourages us to buy, buy, buy our homes.

But times have changed, and I dare say that these authority figures might be slightly out of touch. The jaw-droppingly high cost of real estate in big cities is encouraging millennials to rent instead of own, causing homeownership rates to drop. At 30 years old, 50.2% of millennials own homes versus 55% of baby boomers at the same age. As a millennial homeowner, I can’t help but wonder if I’m generationally displaced.

There’s an old misconception out there about renting that needs to be addressed. You’re not “throwing away your money” if you’re renting. While that familiar axiom might be true sometimes, there are plenty of circumstances in which it does actually make more sense to rent than buy.

You Might Choose to Rent If…

…You Invest What You Save

Renting tends to come with lower carrying costs than owning. Typically, all you’ll have to worry about paying as a renter is, well, the rent (clearly) and perhaps a share of utilities. This leaves you with extra monthly cash to invest, which can ultimately put you on even financial footing or better with a homeowner.

As always, there’s a familiar caveat here: You need to be financially disciplined for this strategy to pay off. One mistake I see a lot is that those who rent tend to fall prey to something called ‘lifestyle inflation.’ Rather than investing what they save as renters, they just rent nicer apartments, eat at fancier restaurants, and put more money into their wardrobe than their RRSP. But this money vacuum can be easily avoided by:

1. Budgeting to find out how much you have left over to invest each month after factoring out all your expenses, then;

2. Funneling that leftover money directly into your investments. Some robo-advisors, like Wealthsimple, allow you to do this automatically via pre-authorized contributions, which set recurring transfers from your chequing account into your investment portfolio, at whatever amount and interval you choose.

…You Have Rent Control, aka the Urban Holy Grail

Depending on where you live, you might be lucky enough to benefit from the urban miracle known as rent control. That means your landlord can only increase your rent by the rate of inflation, which in turn keeps your cost of living way down and leaves you with more money to invest. In Canada, rent control is now implemented in most big cities like Toronto and Vancouver (although not in Montreal).

…You Have a Mobile Lifestyle

Renting makes it easier to move; if you’d like to relocate it’s usually as simple as giving your landlord 60 days written notice. But when you own a home you’re more tied down, and the obligation to be near your property may prevent you from chasing new adventures in faraway lands. I once turned down a fantastic job opportunity in Dallas, Texas for this very reason.

…You’re on a Tight Budget

Renting tends to be more affordable than buying in big cities like Toronto and Vancouver. I know, I know, renting is still unreasonably pricey in certain neighborhoods. But buying in those same areas can be arm-and-a-leg expensive.

When you rent, all you have to come up with is the first and last month’s rent; no need to scrimp and save to pull together a massive down payment on a house, which, incidentally, will take you two to four times longer to save than it did your parents.

And homeownership leads to a lot of other costs aside from mortgage payments. When you buy real estate, you’ll need to pay closing costs, which typically add up to between 1.5%–4% of the property’s purchase price and can include a home inspection fee, real estate lawyer fee, land transfer taxes, and homeowners insurance (sometimes you’ll have to fork over an entire year’s worth of home insurance as one lump sum).

There’s also the elephant in the room that nobody likes to speak about: repairs and maintenance. Homeowners are responsible for paying the big bucks for costly home repairs, such as a new roof and furnace, and are advised to set aside 3–5% of a home’s value toward home repairs and maintenance each year. Renters, on the other hand, can just call their landlord whenever they need repairs (provided the landlord actually picks up). Still, it’s important that tenants know their rights when renting to be aware of which fees do and don’t fall under their responsibility.

Continue Reading

Business

A Montreal Real Estate Broker Answered 5 Qs About Buying A Property To Rent Out

Published

on

By

You’ve probably heard that Montreal’s real estate market is on fire. But how can you get in on the action? According to Alex Marshall, a local real estate broker, buying a property as an investment for the purpose of renting it out is a great way to go about it.

Marshall, who’s part of the Keller Williams Prestige team, sat down with us to explain why and how to purchase an investment property. These types of properties are also known as revenue properties.

Why do you recommend buying a revenue property?

Marshall used personal experience to highlight the advantages of owning a revenue property. He’s currently renting out the Saint-Henri loft he bought in 2010.

“Not only is my tenant paying off my mortgage, but I’m making a couple 100 bucks a month as well,” Marshall said.

Marshall was also able to take out a line of credit on the property, he said, and use the equity to buy an additional property.

“You actually don’t need to live in the property that you buy. I’m seeing clients who are in apartments with low rent [who] don’t want to move but have got the money right now … and are looking for smart ways to invest,” he said.

What are some tips to help people save up for a revenue property?

When Marshall was saving up to buy his first property, he said he worked a second job. 

“There’s a lot of value to having that side hustle … even if it’s at Subway or it’s at a landscaping company on Saturdays. It will add up significantly in the long run,” he said.

He gave the example of adding $5,000 to your annual income.

Marshall said you can qualify to borrow roughly four times your annual salary for a mortgage so $5,000 could actually provide you with an extra $20,000 of buying power.

“That might get you a second bedroom, that might get you a parking spot, that might get you a larger space,” he said.

The pandemic, Marshall said, has also helped some of his clients save extra funds.

“You can’t travel, you can’t go to the restaurant, you can’t go to the theatre, you can’t go to the bar. So a lot of people right now are finding themselves with almost a disposable income,” he said.

Marshall also recommends looking into Canada’s Home Buyers’ Plan program, which allows you to withdraw up to $35,000 — — tax-free — from your registered retirement savings plan (RRSP) to put toward buying or building a qualifying home. 

Continue Reading

Chat

Trending