Your Neighbors Run an Airbnb: Will it affect your home value?
Over the last few years some of the most innovative startups have created what has been coined a "share economy." Whether it's bikes or bedrooms, people are sharing their resources and saving money in the process. Airbnb and Uber have perhaps been the most notable -- if not controversial -- aspects of this new economy. While Uber has brought a sudden and dramatic change to the taxi industry, Airbnb has impacted not only real estate, but the hotel industry as well. While hotels might feel a little squeeze from those looking for cheaper and less restrictive options while on vacation, real estate prices are what really get affected.
There are obviously major positives to Airbnb. Homeowners looking for supplemental income can rent out an extra room in their house or apartment or they can fund their own weekend vacation if they decide to Airbnb their whole house for the time they're away. Those who rent on Airbnb have a cheaper option on their vacations instead of chain or luxury hotels. Airbnb is also particularly useful in newly popular neighborhoods that don't have many hotel options, like Chicago's Logan Square neighborhood.
There are, however, some negatives. With the massive profits some Airbnb owners have made, especially in downtown areas, some developers and landlords are choosing short-term renters over long-term. This is most prevalent in areas with already expensive and sparse housing markets, like San Francisco, New York, and Portland. There have even been examples of long-term renters being evicted by their landlords who want to turn their properties exclusively into Airbnb rentals. One might think that a rotating set of neighbors throughout the year would decrease house values, but so far it seems to be the opposite.
A home that has become exclusively a short-term rental only limits the housing options in a neighborhood. A crowded market only does one thing: increase rent and property values. According to Slate.com, the vacation town of Marfa, Texas has at points had up to twenty percent of its housing market used for short-term rentals. All that does is squeeze out long-term residents and locals who can't afford or simply can't find housing.
That hasn't stopped communities from worrying about short-term leasing lowering their property values, especially in urban cores or popular subdivisions. A key issue is that hotels and long-term residences operate on different zoning laws, which Airbnb owners don't have to comply with, even if they're using a home specifically for short-term renters. There certainly have been examples of renters trashing an Airbnb and the property around it and there is an obvious risk when your neighbors change every week. Fortunately, as of yet, there's been no direct link between Airbnb and lower property values, but that doesn't mean you shouldn't be wary.