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Airing It Out: Short-Term Rental Homes Spark Discussion

This fall, lawmakers across the country are debating the merits of short-term rentals and online sites such as Airbnb, HomeAway and Roomorama. The sites let homeowners—especially in popular destinations like Athens—make a little extra cash by renting their houses to football fans or other visitors. They can raise the same issues as any other rental housing in a college town, though: partying and parking in otherwise quiet neighborhoods. And they’re disrupting the hospitality business, much as Uber and other “sharing economy” apps have done for taxis, delivery and other industries.

Several states and cities have put regulations on the books this month, while others, Georgia and Athens-Clarke County included, continue to suss out the complexities. Meanwhile, short-term online rentals continue to grow in popularity. Airbnb, for example, recently listed 158 houses and individual rooms for rent in Athens; prices ranged from $55 per night up to $2,500 for a seven-bedroom Five Points mansion.

An Alternative to Hotels

ACC Commissioner Allison Wright and husband Gene first bought their house in the Five Points area in 1992, and the house behind theirs was a rental. A few years ago, they told the owner they’d like to buy the home if he sold it; he did, in May. They immediately began repairing it for a new tenant but didn’t have it ready for fall move-in and decided to rent the upstairs on Airbnb while they renovated the downstairs.

The Wrights’ guests sound similar to other hosts’ in Athens: A man came to town for a Saturday wedding but also wanted a place to stay for Friday, and most in-town hotel rooms were booked. A professor from Argentina wanted a place for his family to live for 30 days. A couple from Los Angeles needed a place to stay for a month while they looked for a permanent home. Another couple stayed for nine days while they waited to move into on-campus family housing. Neighbors plan to rent the home during the Christmas holidays as a guest house for their family.

“I think these rentals fill a need,” Allison Wright says. “Like the wedding guest told us, all the hotel rooms were full when he needed a room for Friday. And the professor from Argentina didn’t want his family to stay in a hotel for a month. If you have a kid, a hotel barely works for one or two nights.”

As a commissioner, Wright sees both sides—she experiences the benefits of Airbnb but also wants to acknowledge any concerns from Athenians. By next August, she hopes to have a traditional long-term tenant in the home, but she has enjoyed meeting new people and learning about the short-term rental market.

“As a commissioner and on the school board, people sometimes bring forward concerns, and we have to figure out what problem to solve,” she says. “As we’ve seen with state regulations regarding Uber, it’s actually made business more challenging for taxis but not really restricted Uber drivers.”


Photo Credit: Joshua L. Jones

Wright shows off the home she rents on Airbnb.

When Rabbit Box founder Marci White closed her business in 2014, she looked for a way to make extra money and listed her home in the Boulevard district this April. The extra income helps her to afford her ideal in-town spot, where property taxes have increased dramatically since she bought the home 18 years ago.

White notes that larger cities such as San Francisco and New York likely have severe problems with rentals because of an existing housing crunch and high rents that keep moving up. In addition, numerous investor-owned rentals in one spot can change the character of the neighborhood. “Athens is not even close to something like that,” she says. “We don’t have those problems because it’s just not prevalent enough here, and I doubt it ever will be.”

Jessie McClellan, host of WUGA’s “Morning Edition,” decided to list her home off Atlanta Highway near the end of last year’s football season, when she heard some of her friends had success with Airbnb guests. She only rents her home during game-day weekends and travels to nearby cities such as Asheville and Charlotte with her family. “People have asked if I’m nervous about a guest destroying my house or going through my stuff, but the way the world works today, everything is connected to your online presence,” she says.

To sign into her Airbnb account, McClellan uses her Facebook login. In addition, the Airbnb profile calls for both hosts and guests to leave feedback, creating real-time reviews that affect future opportunities to earn money or stay elsewhere. “As a renter, you want to be as honest as possible and make the guests feel comfortable,” she says. “Similarly, as a guest, you want to be as respectful as possible.” At her home, McClellan leaves a note explaining that her neighborhood is quiet and asks guests not to smoke in the house. She also talks to her neighbors about visitors if they seem worried.

“These rentals benefit the local economy, not only through shopping, dining and events but through the homeowners who want their homes to look nice,” she says. “I board my dogs when we rent the house and use cleaning services after each visit.”

Benefits and Drawbacks

There are downsides to short-term rentals, too. In September, crowded Southern California cities such as Santa Ana, Anaheim and Laguna Beach put restrictions on home rentals of 30 days or less, including fees and taxes to cut down on noise, parking and trash complaints by neighbors. Similarly, a group called Save San Diego Neighborhoods is asking the city council to tighten restrictions on who is allowed to rent and how often they can offer their spaces. In Boulder, CO, the council passed a regulation saying only owner-occupiers can profit from their spaces, not second home owners or renters. Closer to home, Austin, TX and Asheville, NC are struggling with the question as well: How can a city support property owners’ rights and welcome visitors yet maintain neighborhood appeal and safety?

Officially, only one complaint has been recorded by the ACC Commission. At the Aug. 4 meeting, a Hiawassee Avenue resident expressed concerns about another Hiawassee home being used as a short-term rental, saying it was illegal because the home was only occasionally occupied by its owners. Commissioner Melissa Link requested a report on Airbnb operations in Athens in relation to the zoning code, which states that bed-and-breakfasts are not allowed in residential zones. However, ACC code doesn’t yet define or regulate short-term rental activities such as Airbnb.

“I know several people who rent their homes out, especially on football game days,” says Link, who also lives on Hiawassee. “It’s a great opportunity to make some money, especially if you live in the part of town where property values have increased 12 percent the past two years.”

Celebrating its seventh anniversary last month, the largest short-term rental site, Airbnb, is now available in 190 countries and 34,000 cities with more than 1.5 million listings. The online accessibility changes the way consumers choose lodging and spend money on dining and shopping, and leaves a mark on the places they visit. Will this disruption of the lodging industry also change the way governments interact with property owners of all kinds? For now, the ACC commission will leave it up to decisions at the state level and focus on ordinances already in place to handle complaints.

“Locally, we do have the right and ability to regulate activity in certain zones,” Link says. “For example, we don’t want more than two unrelated people living in certain neighborhoods, and we already have a long list of activities that are prohibited in single-family zones.”

The State Steps In

The Georgia House Study Committee on Short-Term Rental Providers met on Sept. 22 for the first time to discuss this changing dynamic of the “sharing economy.” Rep. Spencer Frye (D-Athens) is one of five on the committee, which will look at taxes, fees, permits and potential regulations. “I can understand why we would want to look at this,” Frye says. “It’s an interesting time in our lives that we’re seeing this change in technology where person-to-person communication is outpacing our laws.”

A resolution creating the committee passed unanimously earlier this year. It says “short-term rental providers have significantly increased in number in the state,” which may cause “possible issues that need to be addressed, ranging from taxation to public safety concerns.” The group will meet again in October and file a report by Dec. 1. “As a lawmaker, I don’t like making laws just to make laws,” Frye says. “The first step is to see if there are issues we need to fix and then check if existing ordinances already address those.”

During the first meeting, Savannah officials presented their newly created regulations for short-term rentals, which define them as bed-and-breakfast guest units. They expressed doubt about a state law being effective.

From the viewpoint of the hotel industry, short-term rentals are not subject to the same requirements—taxes, a business license, zoning, parking, safety and food service. A state law would create a “level playing field,” says Jim Sprouse, executive director of the Georgia Hotel and Lodging Association. “If a place is renting rooms by the night, there should be some regulations,” he says. “The concern is about the growing number of units available across the country.”

Two Boston University professors who originally studied Airbnb’s effects on the hotel industry in 2013 released an updated paper in May that focused on Austin. They estimated the impact on hotel revenue was about 8–10 percent, and each 10 percent increase in Airbnb listings meant a 0.35 percent decrease in hotel room revenue per month. Also, short-term rental sites tend to affect lower-priced hotels and those that don’t cater to business travelers, causing those hotels to drop their rates.

But on home football weekends, Athens hotels can’t possibly accommodate all the people who’d like to stay overnight. Short-term rentals can help fill that gap. “In places like Athens on game days or Augusta during the Masters, people rely on single-family houses because hotels fill up,” says state Sen. Frank Ginn (R-Danielsville).

Another issue is whether a $5 fee per room per night tacked onto the transportation funding bill this year should be applied to short-term rentals. Right now, the fee doesn’t apply to rental homes or most bed-and-breakfast spots, because the property must have five or more rooms for rent. Frye worries that charging the fee on Airbnb-style rentals will double-tax homeowners, since they already pay income tax on the rents they receive. Some legislators, such as state Rep. Regina Quick (R-Athens), would rather get rid of the fee altogether than expand it. New regulations could distinguish between homeowners who have a single residence and those who invest in several properties and should be treated like hotel owners, Frye says.

Georgia’s question is similar to dozens more around the country. About 60 bills were introduced in 23 state legislatures this year to regulate Airbnb and short-term rentals during the 2015 session, according to a report by the Center for Public Integrity. Of those, seven have passed legislation (including neighboring Alabama and Florida) and two have rejected legislation. The other 14 states’ legislation, including Georgia’s, is still pending.

“How far do we want the state government to get into private business? That’s a question I take extremely seriously,” Frye says. “On the other hand, the business model for hotels has changed. How do we balance the heavily-regulated side of the industry and this other side that is like the Wild Wild West?”

At the city level, Link is hesitant to approve a regulation that would conflict with the current code. If certain businesses can operate in homes, including bed-and-breakfast properties, how would this differ? How would property owners distinguish this from subleasing, which is legal? Do the main concerns deal with noise, trash or parking, which are already covered by ordinances? “I’m of the belief that you should have the right to do as you please with your property,” she says. “If the concern is about affordable housing, maybe a regulation could prevent high-profit investment schemes but still allow people the freedom to welcome visitors.”

In fact, Link knows the couple who rented the Hiawassee Avenue property that drew the complaint in early August. A friend who was moving from another state stayed there while looking at homes. “It’s beneficial to have these options in our neighborhoods,” Link says. “You can’t experience the feel of a community when you’re in a tower in the business district. You truly experience Athens when you’re hanging out in a neighborhood for a few days.”