Real Estate Platform – Memphis Daily News

FLIGHT. 9 | NO. 49 | Saturday, December 3, 2016

Airbnb is revolutionizing the hospitality industry, forcing lawmakers around the world to scramble to regulate it, but Memphis City Council is drawing the attention of states and the country for its hands-off attitude.

The debate in Memphis between the local tourism industry and the Airbnb community continues, with the two sides meeting regularly until a deal is struck that everyone could live with – at least for now.

City of Memphis new short-term rental ordinance requires rental platforms like Airbnb to pay 3.5% rental fee tax and $ 2 charge per room per night directly to the city from Memphis.

If a rental host is not a member of a platform, they are individually responsible for remitting these taxes and fees to the City of Memphis. When it comes to noise, garbage, and parking ordinances, the City of Memphis requires short-term guests to obey laws that are already in effect for all citizens.

Diane Sable, a Memphis-based Airbnb superhost who has been renting space in her home for two years and was on the original Memphis Short Term Rental Alliance steering committee, says she is generally happy with the new ordinance.

“Six months ago we were in a very different place from where we are now,” said Sable. “(The hotel and tourism industry) started about a year ago trying to control this. “

Various ideas were put forward, such as charging taxes only if rental prices were above a certain amount and requiring business licenses and operating permits, but that would mean hiring employees to endow a commission. permits and appeals and create a layer of red tape and bureaucracy at the city level.

“The $ 250,000 that they were going to raise from us was going to go into wages to make it work,” Sable said.

Memphis City Council Chairman Kemp Conrad said he believes the city “has struck the right balance in ensuring that Airbnb residents are on a par with hotels from a point of view. tax and tariff without over-regulation.

“At the end of the day, VRBO, Airbnb, Uber, and Lyft… they’re all self-regulating,” Conrad said. “If someone has a bad experience, they won’t get good reviews and they’ll end up getting kicked from the platform. We don’t need a 1970s approach to regulate this.

As Airbnb explodes around the world, Memphis has been slower to enter the market.

“Currently there are 486 listings in Memphis,” said Conrad.

Comparatively, in Nashville there are 3,277 and in New York, before a new law, there were over 41,000 registrations.

Conrad believes the ordinance is the right fit for the number of short-term rentals in Memphis right now, but he leaves the door open to revisit it in the future.

“The ordinance and the law can change as the industry evolves,” he said.

Kevin Kane, CEO of the Memphis Convention & Visitors Bureau, said he never intended to blow the Airbnb industry through a bunch of hoops.

“We just think they should pay the appropriate taxes,” he said. “Some of them don’t agree with that, but they benefit from the marketing that we do for the city. People don’t come to Memphis by accident. People come for a reason and it’s largely something that we did or triggered to get them here.

With a signed deal that everyone seems happy with for now, Kane is eager to help Airbnb hosts and other rental platforms across the city become experts in what Memphis has to offer and be good ambassadors for the city. city.

He says CVB is working on training seminars for rental platform hosts that will be announced after the first of the year.

“It’s here to stay,” Kane said. “There are more Airbnb rooms in this country than InterContinental hotels (which own the Holiday Inn brand) have in their overall inventory. They are a force to be reckoned with and we recognize that they serve a good role in the market. We look forward to working with them and we want to help them put Memphis forward. “

AIRBNB TRENDS IN OTHER MARKETS

Regulatory barriers are not unique to Memphis. Airbnb strives to find its place in the hospitality landscape as policymakers around the world complain the company is doing everything from breaking local laws to raising prices in the rental market long-term.

“Ultimately, it’s something new that has come up with tech like Uber and Lyft, and governments are scrambling to try to regulate it because there are no laws in place,” he said. said Mark Cunningham, spokesperson for the Beacon Center of Tennessee, a resident of Nashville. think tank based.

Nashville has had a high-profile battle with Airbnb hosts, enacting a law that a Tennessee judge ruled unconstitutional in its vagueness. The city ordinance, which was recently enacted, requires a short-term rental permit and, among other things, limits the amount of rentals not occupied by the owner to 3% per neighborhood.

“Nasvhille has overstepped his limits,” Cunningham said. “The Memphis settlement is a much fairer way to regulate.

“Local governments are just trying to figure out how to define it and tax it while preserving the rights of owners,” he said. “If they can’t do that, the state government (in Tennessee) has considered regulating it at the state level so that local governments don’t go overboard.”

San Francisco, the hometown of Airbnb, recently voted to allow Airbnb hosts to rent their homes for up to 60 days per year, in hopes of tackling the rise in the number of properties occupied by non-owners. in the city, causing some people to fear that this will affect things like schooling.

CNN Money reported that in July, a new rule went into effect in San Francisco that requires all hosts to register in person with the city and pay a $ 50 registration fee. And instead of fining hosts, the city would fine rental companies of up to $ 1,000 per day for each unregistered listing, placing the responsibility for compliance on rental companies.

New York City has banned Airbnb completely, and the company is involved in various stages of legislative action in most major cities.

But Airbnb seems prepared for the assault. In August 2015, the $ 30 billion company hired Chris Lehane, a former advisor to Bill Clinton, to guide the company in navigating public policy in the many markets in which it operates. This includes all countries in the world except Iran, Syria, Sudan, Crimea, and North Korea.

In addition to regulation, Airbnb has had to tackle issues of discrimination reported on its platform. In a statement released late last month, Airbnb founder Brian Chesky apologized for delay in addressing some reported issues, but pledged to tackle discrimination head-on with concrete policies .

As of November 1, Airbnb asked all members of the Airbnb community to sign a new declaration of discrimination before booking an ad or sharing space on Airbnb. The company has a new program called Open Doors, which handles all complaints and promises to help with reservations if someone feels they’ve been discriminated against.

Airbnb also aims to have one million people signed up by January 1 for the instant booking option, which doesn’t require host approval to get the reservation. Additionally, the company will provide anti-bias training and publicly recognize all hosts who complete the training.

THE ECONOMY OF SHARING

Another reason why Airbnb and other short-term rental platforms like VRBO have taken off, aside from affordability for both hosts and guests, is that it’s a different way and more personal to discover a destination.

“People who come to visit and stay at an Airbnb are people who want to see a different side of Memphis than what you can see by staying in a hotel,” said Chooch Pickard, a local preservation architect and new Airbnb host who helped the Short Term Rental Alliance navigate the legislative process.

Pickard has been renting his three-bedroom house to supplement his income since September and has been full almost every weekend since signing up. He says the new ordinance will make it easier for entrepreneurs to become hosts without all the hurdles other cities have faced.

Griffin Elkington, a local residential real estate developer and property manager, got involved with Airbnb when he came across a unique duplex property in a great location. There is plenty next door where he and his partner plan to build, but they weren’t sure what to do with the duplex.

“I kept hearing about the (Airbnb) market in Nashville, but not much here,” Elkington said. “We thought this property was perfect for this so we just listed it two weeks ago. The response has been phenomenal. The two teams are reserved on the left and on the right.

Airbnb hosts are just as diverse as their guests, and they are in the business for many different reasons, some for extra income and others just because they like it.

“It’s the world’s best-kept secret,” said Patrick McCabe, a retiree who rents the backyard of his Midtown home on average 20 nights a month for a flat rate of $ 79 a night. “I am a retired military man and have lived all over the world and have stayed in many local family places like Airbnb.

“It’s fun,” he said. “Talking with a local for recommendations makes the overall experience better for travelers, and it keeps the money in Memphis, which I love too. I send all of my guests to local establishments only to the hotel. except Bass Pro Downtown.

McCabe did a personal survey and estimates that Airbnb customers who stay with him spend an average of $ 300 per day, including his rental rate.

“Just me, $ 300 for 20 months, 20 days a month… that’s a lot of money and multiply that by the number of Airbnb listings in town and you’re talking millions thanks to keeping Airbnb right here in town . “

Airbnb superhost Sable agrees, saying Marriott owns 12 different brands and the money they take in Memphis is not going back to the community.

“When you stay with Airbnb, you live like a local and you support the locals,” she said.

Sable cites Airbnb statistics that say Airbnb guests typically stay two more days and spend $ 200 more than hotel guests.

In addition to Airbnb generating income that stays in the community with both local hosts and dining and shopping establishments, the reviews are essentially free advertising for the city.

“These are not just reviews for the hosts, but for the city,” McCabe said. “It’s global advertising.

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