Is Your Apartment Building The Hottest New Hotel In Town?

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The Editors's picture
Short-term rentals and is your apartment building the hottest new hotel in town?

Your high-rise apartment building in the city may be the new hottest hotel in town for short-term rentals as downtown, luxury, high-rise apartment buildings have become a magnet for the popular online home-sharing rental platforms such as Airbnb, VRBO, and Spokane-based Stay Alfred, according to several reports.

Because the luxury high-rise apartments typically have great city views, rooftop lounges, state-of-the art gyms and more to attract renters, they also attract the overnight guest. The tenants are renting out these plush digs by the night under the radar many times of the property management and building owners.

The San Diego Union-Tribune recently published a story saying that thousands of vacation rentals scattered throughout San Diego communities are still dominated by homes, condos, duplexes and shared rooms, a rising number of amenity-filled apartment buildings are becoming a magnet for entrepreneurial renters and startups looking for handsome profits.  

So much so that the frequency of vacation rentals at one downtown high-rise, the 46-story Pinnacle on the Park, led one Yelp user to joke it should be called “Hotel on the Park,” the newspaper reported.

 It’s nearly impossible to quantify how many apartment units are actually being used as short-term rentals because the online platforms don’t identify the addresses of listings, and many, like Airbnb, don’t even specify whether a whole-home rental is a condo, apartment or single-family home.

Short-term rentals a frustrating situation for property managers and  landlords

“This is such a frustrating situation for landlords when you’re trying to protect your residents from an expectation of privacy yet you have a revolving door of people trying to enter the building,” Tracy Brunetti, an executive vice president with Alliance Residential Co., which manages the luxury Broadstone apartment complexes in San Diego, told the newspaper. “We now have a weekly audit where we’re going online looking for violators and photos of our buildings.”

However the newspaper said its investigation showed found two Broadstone apartment listings for short-term rentals, including one for a tastefully decorated two-bedroom apartment with an advertised nightly rate of more than $300 in a building where monthly rents for similarly sized units average more than $4,000.  

Last month a Denver based apartment management company sued Airbnb in California and Florida state courts alleging Airbnb assists tenants in breaching their leases by subletting their apartments.

Apartment Investment & Management Company (AIMCO), one of the country's largest owners and operators of apartment homes, filed the suit seeking monetary damages as well as court orders preventing Airbnb, Inc. from assisting Aimco tenants to breach their leases in order to sublet their apartments.  Short-term rental arrangements, whether through Airbnb or otherwise, are expressly prohibited by Aimco's lease agreements. Transient Airbnb clients have posed safety and quality of life concerns for Aimco's full-time residents.

"Our residents are our top priority. We are committed to providing them a safe and respectful environment," Aimco CEO Terry Considine said in a release about the suit.

 "It is not acceptable to us that Airbnb actively promotes and profits from deliberate breaches of our leases, and does so in utter disregard of the disrespectful and unsafe situations created for our full-time residents and their families.  We are asking the courts to compensate Aimco for our losses and to enjoin Airbnb from participation in further illegal activity at our properties so that our law-abiding residents can enjoy a high quality living experience," Considine said in the release.

“By contrast, those assisted by Airbnb to use Aimco property in violation of the Aimco lease are trespassers, with unvetted personal histories, and no vested interest in maintaining a peaceful community atmosphere.  On several occasions, these Airbnb supported trespassers have created safety, noise and nuisance concerns for Aimco's lawful residents, including incidents of public drunkenness and fighting requiring police assistance,” according to the release from Aimco.

Scott Shatford, co-founder of Airdna, a data analytics firm catering to vacation rental hosts and investors, told the newspaper, “I definitely see the trend toward more luxury units coming onto Airbnb because more and more people are seeing it as an alternative to four-star accommodations. And with all this new apartment construction over the last couple of years, it’s much easier to take part of that and fill a property with short-term tenants tomorrow instead of finding long-term tenants right away.”  

Photo copyright by It Must Be F/8 via Canva.

Resources:

San Diego Union-Tribune

Austin American-Statesman

Airdna.com

Airbnb.com

Stay Alfred

VBRO

 

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