This is our blog–The Odell House News, Spokane Washington.
http://www.odellhouse.com is our website.
This post is about the Air BnB Spokane Scuffle 2014
News: “Somebody” is trying to shut down the small short term lodging hosts in Spokane. Because the complaint (s) were made anonymously–which is a subject of some strife in itself–it is hard for all those who got notices from the city to get a bead on what the actual problem is or was. This just in, from a reliable source, but not yet absolutely for sure: apparently a loud party generated by some Air BnB guests was staged (sadly or happily depending on your view) next door to a public official’s house. He or she then reportedly birthed the fuss.
It is a complicated issue, because it involves a huge multi-national company, the tourist trade, a local grudge, a group of sometimes contradictory city ordinances, and a lot of notably middle-income people who have been actively-encouraged to invest in something that in most places, including here, is not legal.
If you like, read on and I’ll give you my take.
To make our location and bias clear: here we are, owners of The Odell House, which sits on the corner of First Avenue and Poplar Street in Spokane, Washington. We’ve been licensed for short term lodging since about 1998, as Spokane Bed and Breakfast and The Odell House Lodging.
Being an inn-keeper is a glamorous job which include milliseconds of sitting on the porch swing.
Lots of biking.
Hours of cleaning dark spaces.
And then, the thrill of participating in restoration projects.
Spokane Washington is a town that, last I checked, the population hit a bit over two hundred thousand. A small, “friendly” city.
Caring for the Odell House, and the people who live here–or visit–obviously keeps Rick and I busy. This week has been busier than usual because there is a Big Stink going on with short term housing right here.
Last week, we were peacefully tearing apart apartment D to repaint and refinish the floors. (Don’t they look nice now?)
When we got a bunch of phone calls indicating there is a lot of other tearing apart in Spokane. “Someone” is going through all the short term lodging websites (vacation rental by owner sorts of things) with a specific target of eradicating the small hosts. The Air BnB list came first, but we don’t know who will follow.
I know something about Air BnB because I have both hosted for them and stayed in other host’s units when traveling. So I thought I would chime in with my opinion on the subject.
Re the grudge mentioned above and the target of home hosts: I’m feeling a bit impatient here (sanding will do that to you) so forgive me the attitude, but it looks like “Someone” had the bright idea to cut out some illegal hotel “competition,” and filed a raft of complaints which ended up serving every one of the close to 100 amateur Spokane Air BnB hosts with a notice from the city this week: Comply to code, or close by March 31!
Comply to code is all very nice if complying means tuning up your paperwork. The problem is, the vast majority of these “home hosts” can’t comply to code because the regulations for short term stay–where you can do it, how much of it you can do, what the state and city taxes are–are totally different than keeping a renter long term, (usually defined as over thirty consecutive days.) So though most places allow rentals of 30 days or more with very loose restrictions and no tax due to the state or city, short term rentals have a very different set of rules and expectations.
So why not just do nightly rental under the table secretly, and expect no one will find out? Or believe that it is so innocuous that no one will mind if they do find out? It’s your house, (room, apartment, etc,) shouldn’t it be your business what you do in it? The trouble with this popular line of thought is, the very thing that makes it easy for folks with a spare room–and those in search of a spare room to find one–(The Web) makes it also very easy for anyone with a grudge to do a little research themselves.
So no matter how inviting you make your spare bedroom, for Spokane City regulations, which are a lot slower to change than the Internet (and this is possibly a good thing), it is currently not a legal short stay–unless it (at minimum) conforms to something like this: https://beta.spokanecity.org/smc/?Section=17C.315.120
Without regard to that, “Hosts,” have been gearing up to keep paid guests in their spare space–and have been doing so with a lot of personal investment, and with a lot of encouragement from several big (huge) businesses, advertising these rentals on the Internet. These enabling Internet companies make a gargantuan profit on the work of these small individuals, with comparatively little investment. They pull this big profit as the middleman, electronically connecting travelers who are sick of hotels, with individuals who would like to host them–and get paid for it.
So that’s the background, and right now there are lots of offerings out there for keeping guests in a private residence for less than 30 days. Unfortunately, the Spokane city regulations (and this is true of most cities), as they sit, will not allow an individual to rent to transient guests, without some very specific requirements, such as you are supposed to be a Hotel, Motel, Boarding House or B&B, and abide by the rules and zoning of each of these types of business in your town. And while your neighbor might not squawk about to odd transient guest, if you asked him or her directly for permission to open a motel, you might get a different reaction.
Welcome to the Air BnB universe: they are one of several big companies (Vacation Rental By Owner, Flip Key, Rentalo, are others) who run websites connecting travelers to amateur hoteliers. Air BnB so clearly targets the middle class that we will pick on them–never mind that’s also the starting place for the “owner of the grudge” in Spokane. Air BnB is a California-based company that enables individuals to rent their extra spaces–rooms, garages, apartments, villas (and probably small towns) on the vacation rental scene for periods of time ranging from hours to years.
Air BnB opened their doors–or in this case a lot of other people’s doors–in 2008. The name came from the idea of renting out spare space with an air mattress to visitors.
And sometimes Air BnB offerings are made without even the air mattress! There was one local Air BnB host, north of the Kendall Yard district (just north of the river west of downtown Spokane), where you could rent a bare room for $30 a night. No limit to how many guests, just bring your own–err–everything. The listing was priceless, advertising one of the virtues of the space as “lack of clutter.” Discounts to veterans.
Is Spokane completely without a sense of irony?
Sadly, it disappeared.
Anyway. it turns out the Air BnB idea had some traction with thrifty or adventurous guests, and with hosts in lots and lots of places. Current numbers are that Air BnB has half a million listings in 33,000 cities and 192 countries, and is thinking of going public. Which, if it happens, means we can all invest our retirement money with them! After we solve the legality part, that is.
The legality issue seems particularly hot in New York City, where rent control is taken pretty seriously and landlords often do not appreciate their properties being illegally sublet to strangers at a profit. People–the tenants offering space–have been kicked out of their apartments. Anywhere this would be a shock, but particularly in New York City, that is a very, very big deal. But, notably though the odd New York City landlord has evicted a tenant, and neighbors have sometimes complained (I am sure an almost unheard of event in that city) the city has not filed action on the websites or busted the offending hosts. Yet.
It takes a complaint. In New York City the Air BnB website states there are “in excess of 1000 hosts”, not the paltry under 100 that we have in Spokane. In reality, Air BnB is getting very cagey of late about letting out these numbers. There are probably more like 20,000 listings in New York City. Proportionally Spokane has similar to slightly fewer offerings per capita than New York. And filing a complaint is really easy with numbers in the less than 100 range. Just go to the website below and print enough for everyone!
And somebody did.
So in Spokane, no matter what their investment, it looks like all “non complying hosts” will be out of the business at the end of March. That’s what the city said anyway. Close, or face fines of $275 a night for violations.
We’ll just get rid of all those scofflaws!
(What a great word: scoff·law ˈskôfˌlô,ˈskäf-/ noun informal noun: scofflaw; plural noun: scofflaws
a person who flouts the law, esp. by failing to comply with a law that is difficult to enforce effectively.)
An example of the menace that Air B&B has helped promote here in Spokane?
This, a risk to the community, at less than $100 a night?
What an outrage! Someone with taste has offered to share a view of it? We can’t have that!
I’d be really sad if they close the doors, as this is a neat place and worthy of a second look. (No “legitimate” hotel will school you in making your own fire to heat the place.)
It is part of the charm, and the experience, probably violates a host of regulations, and guests don’t care–they uniformly LOVE it.
But this is clearly not the “just cheap,” somebody’s extra room without a fire exit and with a roommate you don’t want to think about. That would be not such a great thing. Below (and you’ll see them again even further below) two pictures from a fully-licensed Washington establishment.
Perhaps a threat to public safety?
If not, then high on the “eeewwww. . .” factor.
So it does not look like a quality of experience issue for the guest–though more on that later–it looks as though someone took it into their own hands to decide how all the neighborhoods should react to hosts. Who decided (in Spokane) that the often charming Air BnB offerings had to go? Well, the obvious thought would be a hotel or business that felt threatened by their presence–and competition.
The thought has always been that as long as home lodging offerings stayed small, the hotels would pay no attention, or at least turn a blind eye. And if they did, so would the local cities. Personally, I always assumed the customers who want to stay at the Davenport (hotel pictured below in downtown Spokane,) and can afford it, are generally never going to look at that $30 bare floor north of the river.
It really is a different market–until you get into the over $100 range, which is starting to happen more and more.
For example, this lovely Air BnB entry, which was offered at $165 (or so) a night.
I knew the previous owners slightly. Intensely creative. Great garden. Interior to die for–done! Very busy street. Inconsistent neighborhood. Really an “Oasis” as claimed–nothing of note for blocks and blocks and blocks. But what a great place! Spokane is full of these little gems, tucked in odd places.
And I suspect the rising cost of some of the Air BnB entries, and the evidently increasing niceness of the offerings got someone’s jealous attention in the business, and thus the fuss and the raft of nasty notes. Yes, the uneven playing field of some people have to meet expensive regulations while others look to be undercutting those who do, needs to be addressed.
But really, what a mistake to make such a lot of local strife by complicating small host’s lives instead of going after the real problem nationally. Before closing down one city at a time, we should at least ask the question, is it legal for a large company to promote, and profit by, encouraging people to skirt the law?
In my opinion, the lodging wunderkind, Air BnB, are enablers extraordinaire.
Turns out, in Spokane, and many other places, they have actively encouraged people to break the law. And in doing so, yes, they have created a playing field where legitimate small businesses are at an annoying disadvantage to the people who are a bit fast and loose with the rules–or just plain don’t know.
And if I have one, this is my beef: There is very, very little–microscopic–effort from Air BnB to educate people on the downside (or ways to avoid the downside) of renting out that extra space–and undercutting the people who play by the rules.
And here’s how they target the middle class and tempt people to opt out of required local taxes:
1. It doesn’t cost anything up front to use Air BnB. (Most websites have a monthly fee).
2. It is a slick website, easy in every way. You don’t even have to take your own photos. They will send a professional–its Free!
3. You don’t have to take checks or set up a credit card account. Air BnB collects from the guest at booking (the whole rental fee, plus a hefty portion for themselves), and disburses a portion of it to the host after the guest has checked in.
4. There is a double review system which is supposed to inspire trust, and a lot of look-good attempts to link people to various other internet connections–Facebook accounts, for instance
5. The note on local taxes? Air BnB’s only advice is only that they should be “included in the rate.” Right. It is perfectly easy to list the rate in a way that everyone has to acknowledge it. Currently, whether the home owner files or not is up to them, but as the monthly income is now reported in detail to the government (new this year and a surprise to all Air BnB proprietors,) people who have not filed state taxes may be in for a not-pleasant surprise. It would also be perfectly easy, to collect and withhold those local taxes for these very small hosts–air BnB collects all the money anyway and generally local short term lodging taxes (for places with under 40 units in this state and many more) are a static cost. It is not like being poor gets you any break on them! The point is local taxes should be part of the game, and it should be up front for everyone–and they are not.
And speaking of taxes, there is remarkably little said about the fact that if you use part of your house for business and take a deduction for the new wallpaper (which is reasonable if you are making money in (or with) your residence and paying taxes on that money,) it has consequences for the US tax-free status of the sale of that residence.
Anyway, the limp end of official direction is that the Air BnB host is to “check the local zoning rules.” Right after that they should give directions to the guest, make the bed, provide keys, Internet codes and hopefully breakfast. (TV, hot water, travel aids are all optional–as it seems are the local zoning regulations.)
Air BnB doesn’t much advertise either the fact that, after spending thousands in improvements–decorating, writing, responding, giving up space and your house’s amateur status–you can be shut down, evicted, fined, or have a nasty surprise at the taxes due (that you should have paid but did not 100% know about) to both the IRS, local, and State Department of Revenue.
Harmless? That’s how Air BnB seductively sees it.
Here, copied this morning from their website pushing (errr, “encouraging”) new victims to list their spaces. (Bold in quotes mine and (!).
“It’s completely free to create a listing on Airbnb. Click the yellow ‘List your space’ button on the top right of any page on the site. This will take you to a form where you can enter initial details. You can always change any of these details later. Your listing won’t go live until you’re completely ready, so go ahead and click ‘Continue’ to keep entering information.”
Dale’s note: re “completely ready”: what happened to going down to the local city and state offices and asking if you can, before entering the “just click” fantasy?
“You’re always in control of who books your place. When you receive a reservation request, you have 24 hours to accept or decline the request or it will expire. We encourage you to reply to every request, even if just to decline it, as expired requests will negatively affect your search results and response rates.”
Dale’s note: see the pusher?–”respond NOW or we’ll ding you.”
“You’re so close to a payday you can almost taste it! Just a few more things to get in order, and then you’re ready for the fun part – meeting your guests and getting paid.”
Dale’s note: A few more things to get in order would be as follows:
1. Go find out what it takes to house guests for less than 30 days. Planning department can help here. (City Hall, Riverside, near the statues in the park.)
(Hint it’s either a Hotel/Motel (certain zoning and permits) or a B&B, if you charge for more than X (small number) days a year. If the later (B&B) please make sure you are living in the building–that is a requirement. And you must be in a historic district or on the Historic registry. (Oh, that. . .)
2. If not in Historic District, apply for a review (with professionally researched history) to be on the Registry of Historic Places. (City hall second floor)
3. After (if) you are accepted to the Historic Registry, apply for your license as a B&B. (City Hall)
4. Go the the Department of Revenue office and apply for another license, and tutorial on how to file monthly or quarterly city and state lodging tax. (Office is on corner of Boone or Broadway and Washington) File quarterly.
5. Go talk to your insurance agent and make sure you are covered for renting to short term guests.
(Hint, you are not.)
Now, do tasks 1-5 sound like the kind of sales job that will get a bunch of innocent home owners or renters to offer a place for guests to stay in their house, so Air BnB can skim a profit?
No, that sounds like a lot of work and expense. That might ruin the fun illusion Air BnB promotes–never mind hurt the bottom line. And I bet the reason the Air BnB home-owners and apartment-renters are listing their places is–they are in need of the money.
(Remember what has happened to finances of the average American since the “ownership economy” took over? People might just see this “illegal activity” as a way to KEEP their house–or be able to afford to go on vacation–finally.)
That’s why I did not file a (city-wide) complaint. Even though that is apparently the rumor that is going around.
On average, we offer much nicer accommodations than most of Air BnB. There are exceptions of course, but frankly, it is not a high bar to meet with many new hosts. They are most probably busy making the same mistakes we made in 1998. And most don’t have the same bones to work with. A beautifully-built Queen Anne house in a quiet, historic neighborhood, next to the museum, split into several gracious apartments in the twenties is a good place to start. The house was made for comfort and privacy, and has a track record to look at. We are still in business after fifteen years, and I’d hope we’d have learned something.
Air BnB does a great job with its marketing, the target client so far is a young, hip internet-savvy thirty-something who likes to see and do new things. Great. Forgive the generalization, but this is a much lamented hotel industry discussion right now: market to this group and house them at your peril, because no matter what you do to please them they will not be back. Seeing the next location is what they really want. And ironed sheets, chocolates on the bed, or not, you’ll get a four star review, and probably a suggestion about installing more electrical outlets. . .
With Air BnB the pictures might look good, but pictures won’t tell you who’s living next door, the parking situation,noise levels. The longevity of the business tells you those things. Be a first responder and you’ll find out once you get there, and the review system is about as reliable as Ebay. Lots of five star reviews resulting from the fact that the reviewed gets to review you too. Let’s keep it nice unless it is a REAL wreck.
And there just are no guarantees in lodging away from home–regulated or not. Rick and I took a trip to Seattle recently. Here’s a little side-story for you:
Mr. Rick and Ms Dale’s excellent adventure in Seattle:
Purpose was to pick up Ricks “new” car–1972 Saab model 96
Isn’t that the cutest thing?
The first two nights we stayed at an Air BnB offering. It was nice enough. $90 a night. I gave them a five-star review. Truth was it was tiny–a compact and cleverly photographed space, undoubtably shot with a wide-angle lens by a professional Air BnB photographer to make it look bigger. Small is okay, but this smallness, (reviewed as “cozy” many times over), was way too close to the strident noise of our hosts’ bickering about their teenage kids. Really, just inches away, behind fabulously thin walls, spotted with doors that might open to their difficult lives.
This left us prone to abandon the bedroom, which was just big enough to fit a bed, no real sitting area, and hide out in the kitchen, on two garage sale chairs. (The wobble adds to the challenge of not spilling wine on the host’s belongings–and thus getting a bad review as a guest.).
The first night was cold (they forgot to turn on the heat) and when the forced air heat was turned on, the ducts smelled so strongly of rodents that I thought I might have to leave–asthma issues.
The reviews state a “great garden”, and that is true, but way too close for comfort in my book.
This was not a wreck by any means, but it was not a nice experience, and these folks keep a LOT of guests with very high reviews. But did we say how it really was? Heck no. It was worth $90 a night, and is there any way to politely say your hostess has an embarrassing relationship with her family, and the place smells like rats? In Ballard? Let’s be serious.
The night we spent on the trip home was very different–we alighted in an elderly motel in North Bend Washington, just west of the pass. On the good side it, was $15 cheaper than the air BnB offering–base rate $65–though it ended up being identical in rate to the Air BnB place–after tax was added and a surcharge because we were traveling with a “Threat To Modern Humanity”:
Headed into a snow storm on the pass, we could not be too picky–not that we really are. (See below)
What a deal! There was no neighbor noise at all, the odor better than the previous “vermin evenings”, though an unfortunate “nicotine patina” coated the walls and furnishings. What do you want for $90 night including tax, for Pete’s sake?
I liked the manager.
He was truly sympathetic to the lack of heat.
(Wall unit burned out–in 15 degree weather)
And lack of hot water
(Frozen–this is the cold side running to keep it from freezing too.)
And general lack of decor.
Rick always travels with two sleeping bags. In this case one to cover the porous window and one for the bed.
(See Threat to Modern Humanity by his leg?)
No doubt about this place’s legality. I saw that license right on the wall at check in. Above the ash tray.
The point is that regulations unto themselves do very little to guarantee your personal experience.
And the regulations are, well, let’s face it, pretty discouraging in most places. Spokane is no exception. They are hard to get right, even when you try–trust us, we work at it and often screw up–and they are expensive. Easy perhaps for a chain, or for someone with employees, but for a single or couple of units? Really a lot of trouble.
Forms, forms, lots of forms!
But, back to Spokane, someone thought Air BnB hosts were a problem. Right here in little Spokane, and so we have not followed New York City’s lead and turned a blind eye except if an actual neighbor or actual landlord complained. That would have been a reasonable, case by case basis. But here? No! OUT WITH THE LOT!
Obviously someone out there thought the night on the floor at $30 WAS a real threat to their livelihood. Or was just mean–who knows? But diligent I will give them–it takes some significant work to file that number of individual complaints. (Someone had some time on their hands!) And eventually the author of this little bit of Spokane insanity will come out, take a bow and get the wag of the finger from the community. At least I hope so.
(And my guess was it was not the night on the floor, discounted for Veterans that “motivated” the complainer, but the several legitimate, wonderful places that really were starting to make a living doing this.” Follow the money.)
In closing, I’m in the business, and of course I knew about Air BnB. I used it for some advertizing and sometimes was annoyed at the very close competition to our smallest units it promoted. The super-thrifty nature of its typical clients, combined with the “race to the bottom” pricing that hosts inflict on each other, and then the margin that the company took on the top, left little for what we laughingly call profit. Air BnB stays didn’t quite cover expenses most of the time, after we provided the visible things we always provide: a completely private, roomy apartment, cable, Internet, lots of heat and hot water in a locked building with good security. And the invisible community things we provide as well: property taxes at $500 a month, professional and correct insurance at $300 a month, 10% off the top for state and local taxes. There is simply a LOT of overhead if you do this business legally.
I always wondered why people kept using Air BnB when they could simply find us themselves. Its not like we don’t have a website–which Air BNB goes to great lengths to hide in every case they can.
In the end the illusion Air BnB runs on is that it is a “people to people” transaction. A real transaction of that sort would not be “marketed” by a multi-national company. Truth is I have many repeat customers who have used us for years that I give a weekly rate to at half of Air BnB’s fees. But not the first time they visited. A track record of orderly behavior and loyalty go a very long way in a real “people to people” transaction.
But until recently I was too busy to pay it much mind–most of our clients are 30 days or more, repeat customers and long time guests. I have ironing to do, the phone to answer, apartments to clean, floors to refinish, horses to train, a dog that wants playing with, and chickens to feed.
Anyway, when it comes out who complained I’ll let you know.
(This just in one week later, and it appears as though an owner of a grudge has come forward–I don’t think it is THE BIG CITY GRUDGE, but a good indication of how those who really have to deal with the city regs deeply feel about the issue. https://www.youtube.com/watch?v=sgWThdDBzsk&feature=player_detailpage )
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