Seattle’s low supply of real estate inventory is nothing new to us in 2016, but an added roadblock has been brought to light. For those of you who aren’t familiar with Airbnb, they provide an outlet for hosts and travelers to connect and “book unique accommodations anywhere in the world.”
According to the company’s website, travelers can search for entire homes, apartments, private rooms, and shared rooms to temporarily live in.
Gaining popularity, many homeowners are using Airbnb while they’re away, in order to create cash flow in their absence. Unfortunately for the housing market, an added 1000 units are being used as Airbnb rentals by people who do not reside in them.
Putting this into perspective, 2,817 whole houses or apartments were listed on Airbnb for Seattle in April 2016. That same month, 1,353 private or shared rooms were also available for booking.
Out of the total Seattle Airbnb rentals, 36% of these units (1,003 total homes or apartments) were unoccupied and listed by hosts who did not live in them. You read that correctly, 1,003 units have been taken off the market to temporarily house vacationers rather than Seattle renters.
Why? Simply because it is more profitable for these hosts to house short-term tenants.
According to the Seattle Times, some people have turned Airbnb rentals into a full-time job, managing 16% of the total Seattle listings.
The outcome? There are buildings and apartment complexes that are being turned into hotels.
To combat this trend, Seattle Council-member Tim Burgess and Mayor Ed Murray have proposed new regulations limiting short-term rentals to 90 nights within a year. However, if it is your primary residence that you are trying to rent out, you be allowed to exceed the proposed 90-day rule.
“‘We must protect our existing rental housing supply at a time when it is becoming harder for residents to find an affordable home in Seattle,’ said Mayor Ed Murray. ‘
This proposal ensures that apartments and houses are not being used exclusively as short-term rentals, while still providing a means for homeowners to earn some extra money by occasionally renting out their property.’”
Despite the good intentions of these proposed regulations, people still spoke out against them.
Those opposed shared stories of sick relatives who only needed their houses for half of the year, and thus could not be converted into long-term rentals. Others had downsized their homes, but were still using their earlier residences as Airbnb rentals to pay off their new mortgage.
On the other hand, supporters of these regulations pointed out how consistently unoccupied homes would affect their neighborhoods and vote participation for local elections.
Although a decision about the proposed regulations won’t be made until August, it is clear that some sort of limitation or compromise needs to be implemented.
From September 2015 to April 2016, whole Airbnb units listed in Seattle increased by 31%, totaling 665 units. Half of the units listed during this time period were hosted by people who were renting out multiple properties.
“‘The scale of short-term rental housing in Seattle to date has not been that big of a problem,’ [Henry Greenwich, a senior policy adviser at the housing-advocacy group Puget Sound Sage] said. ‘
It’s really the growth we’ve seen in the last year, and what we’re projecting going forward. Once you get up over 1,000 units, it begins to affect the market — that’s where it’s at now, and it’s going to get bigger.’”
*Created for Heaton Dainard Real Estate