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Airbnb Courts Apartment Owners/Managers

Reaction Mixed, Survey Finds

By Dave Sorter | Wednesday, September 28, 2016

Most lease agreements state that apartment residents can’t sublease their units without management approval. But the growing popularity of Airbnb and other home-sharing services have motivated many people to make some extra money by renting out their space while they’re on vacation. 

That’s beneficial for the lessee, but it keeps the lessor out of the loop. Unless property managers are actively policing the grounds for rogue Airbnb customers, these short subleases could fly under their radar – and prevent the landlord from receiving its fair share of the proceeds.

Airbnb wants to change that.

The company’s new Friendly Building Program encourages apartment owners to sign up with Airbnb, set rules for home-sharing and, most importantly, take a piece of the revenue pie – about 5%-15% of the proceeds, according to an article in “Fortune” magazine.

Airbnb would also provide information about which residents are using Airbnb and their guests – though property managers would not receive information of who used the service before the agreement was signed, which, the “Fortune” article noted, marks a change from Airbnb’s past policy of not sharing data unless it has to.

The concept, though, has received mixed reviews, according to a National Multifamily Housing Council (NMHC) survey.

  • One-third of the 79 firms surveyed – which include owners and managers of more than 1 million units – said they’d be open to a partnership such as what Airbnb is offering.
  • Another 42% said they were not interested.
  • The other 25% reported that they did not know either way.
  • Only 1% of those surveyed said they already allow unit-sharing.
  • 42% believe their residents are listing their units for home-sharing even though it violates corporate policy and/or local laws.

“The risk currently outweighs the reward,” Rick Haughey, NMHC vice president of industry technology initiatives, told “National Real Estate Investor.” “Currently, there is a little too much uncertainty. Local regulations are now so varied and are changing so rapidly that our members, especially those with national portfolios, often can’t keep up with whether short-term rentals in apartments violate local regulations, in addition to being a lease violation.”

For example:

  • New York properties could not join the Airbnb program, thanks to a state law prohibiting subleases of multifamily units for less than 30 days unless the primary resident is present New legislation awaiting Gov. Andrew Cuomo’s signature authorizes heavy fines for advertising such home-sharing.
  • San Francisco recently passed a new law that would penalize Airbnb for renting a property that isn’t registered in the city. Airbnb is suing San Francisco, as well as Anaheim and Santa Monica, over such regulations, according to the “San Jose Mercury News.”

“The growing popularity of the sharing economy, and home sharing in particular, has brought new economic opportunities along with additional challenges for both the businesses involved and policymakers,” said Kevin Donnelly, NMHC vice president of government affairs, in a statement released with the survey. “We believe that apartment firms have the right to participate in all areas of the sharing economy, if they so choose, in full compliance with existing laws and regulations.”

Airbnb is restricting the program to market-rate units, according to the “Fortune” article, so that residents in subsidized units don’t unfairly profit from home-sharing. The company is also saying that only properties with long-term leases are eligible for the program, to avoid some managers from turning their projects into hotels.

The NMHC asked survey participants to list their three biggest concerns about home-sharing. The results were:

  • Safety issues, 80%
  • Liability and insurance, 74%
  • Quality of life/neighborhood dynamic, 74%
  • Lease violation/subletting without management approval, 50%
  • Violation of local news/regulations, 35%
  • Lack of revenue share, 9%


Dave Sorter

Dave Sorter


Dave Sorter is an award-winning journalist who spent 30 years as a newspaper reporter and editor before joining Axiometrics. He oversees all Axio blogs and newsletters and serves as senior editor of all Axio publications.

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