Commentary: Wild West-like growth of short-term rentals threatens public safety, business fairness
Enter the “sharing” economy, the Airbnb phenomenon where individuals rent their personal residence. A homeowner can raise extra cash to help with the monthly mortgage, while appealing to those who seek a more individualized travel experience.
At the neighborhood level, many homeowners disregard local zoning and use ordinances and mortgage covenants, and create thoroughfares for strangers to come and go throughout the year. Notably, more than 7,000 Michigan residents listed their homes on Airbnb as of August 2018, while another site, Vrbo, listed more than 10,000 vacation rentals in Michigan this year.
And in Detroit, a San Francisco based real estate development company named Sonder announced in October that it will open 168 apartment-like short-term rentals in downtown Detroit. While the development was originally intended to secure affordable multifamily housing downtown, the dramatic about face by Sonder to pivot the property to short-term rentals has exacerbated an already tense issue. The result has not just been more unfair competition in the lodging sector, but also a dearth of affordable housing and the erosion of longstanding neighborhoods.
My colleagues and I at the Detroit Restaurant & Lodging Association are working with stakeholders to level this playing field in the interest of our guests and of community stability. We are working with Councilwoman Janeé Ayers, who has sponsored a common-sense city ordinance to maintain the integrity of our neighborhoods and the safety of our guests by properly regulating the industry.
She starts by very adroitly recognizing the right of Detroit residents to pursue revenue through the occasional sharing of their home. The ordinance, therefore, allows their principal residence to be rented up to 90 days per year. To prevent the onslaught of multi-unit illegal hotels, however, she limits the existence of short-term rentals to not within 1,000 feet of another registered property. It is a balanced approach that preserves individual rights and neighborhoods alike.