Airbnb allows property owners to rent their homes or apartments to people who are looking for a place to stay. Hosts often use short-term rentals as supplemental income, but for many people, this is their primary job. Because Airbnbs can be lucrative, more and more people are buying properties that they plan to use solely as short-term rentals. This is having a detrimental effect on communities across the country because it reduces the number of permanent residents in neighborhoods. Many cities have restrictions that limit short-term rental properties, but a lack of enforcement means that this problem isn’t going away.
Reduced Local Tax Revenue
Homes and apartments that are listed on Airbnb are subject to property taxes; however, hosts often avoid paying taxes on their rental income. This means that local communities miss out on tax revenue that they would have received if those guests had stayed at hotels instead. This reduces a city’s ability to invest in schools, critical infrastructure, first responders, and other services.
Most Airbnb listings are located in residential areas. Because tourists go on vacation to have a good time and party, they may affect the quality of life for permanent residents. Complaints regarding litter, illegal parking, and noise disturbances are often higher in communities with Airbnb-style rentals.
Artificially Inflated Property Values
In neighborhoods that are close to tourist destinations, residents who do not own their homes often face inflated rental prices that force them to move because landlords are choosing to convert their long-term rentals into Airbnbs. This can also make it more difficult for people to buy a home in these areas. There have been protests in San Francisco, New York, and major cities across the world as residents try to keep their neighborhoods from being overrun with tourists.
Unfair Competition for the Hotel Industry
Many Airbnb operators don’t have any employees. They simply clean up the property themselves after a guest checks out. Along with paying fewer taxes, this means that they avoid many of the overhead costs that hotels face. As they make less money, hotels will have to lay off employees to cut costs, which makes it much harder for people who work in the service industry to find jobs.
As of 2019, there were over 700,000 Airbnb listings in the United States. Though the potential profits make buying a short-term rental property tempting, there are many factors to consider, especially the negative effects on local communities. As a real estate firm that’s owned by Nashville natives with decades of experience, you can trust HND Realty LLC when you’re buying or selling residential and commercial properties in the area. We’re dedicated to keeping the neighborhoods that make Nashville unique intact. If you’re interested in working with our agents, contact us online today.