The Airbnb wars, a primer

by David Forbes January 9, 2018

Just before a major Council vote, here’s a look at the issue that’s rocked Asheville, one that remains highly complex and as brutally simple as power, money and displacement

Above: part of a map from the 2016 Blade investigation into the city’s clampdown on illegal Airbnb-style rentals, showing the location of such units throughout Asheville

The fight over Airbnb (or Airbnb-style rentals, to be technical, as some of them are advertised through other means and websites) is without a doubt one of the biggest political issues in our city. It’s been so for several years at this point, and during that time the industry has metastasized.

Tonight Asheville City Council will vote on a major step, banning whole home/apartment Airbnb-style rentals across much of the city. This has happened after major public pressure, especially from renters, affordable housing advocates and some neighborhood groups and city commissions. It’s been shaped by everything from countless meetings to last year’s election results and the fights have stretched from City Hall to the residential neighborhoods.

The issue is, without a doubt, complex, the business of Airbnb and its ilk remains shadowy and hard to fully measure. But it’s also as brutally simple as power, displacement and money. So here, for our readers’ edification, is a primer on the Airbnb wars, what’s behind them and what local government (may) do about it.

Why is Airbnb such a big deal in Asheville?

Because it’s a big business that makes a ton of money and has a big impact on a lot of housing. Asheville has a massive housing crisis and whole units that are rented to tourists by nature shut out locals that need places to live.

The past decade has seen a giant tourism boom in Asheville, and with that the city’s become a big hub for Airbnb-style vacation rentals too. The scale of the local Airbnb industry is bigger than North Carolina’s other major cities combined (yes, that includes places like Charlotte, Raleigh and Durham with much larger) so the business generated a lot of cash very quickly for those who could afford to take the opportunities it provided.

This industry takes a lot of different forms. Occasionally, it’s a local renting out a guest room to a tourist to make some extra cash. But far, far more often it’s entire housing units being rented out, because whole homes and apartments are a hot commodity to tourists looking for a spot to stay. This also means that property owners can increasingly make a lot more money renting to tourists than locals (who also, it’s worth remembering, really, really need housing).

Over half the city are renters. Black, Latinx and LGBT Ashevillians overwhelmingly are. As affordable housing advocates see it, the explosive growth of Airbnb has poured gasoline on the flames of what was already a pretty bad housing crisis, and that’s left a situation where locals are literally being pushed out of their homes (or unable to find housing) to make room for tourists, further segregating the city in the process.

Even some more well-off neighborhood groups and property owners have also opposed Airbnb’s spread, asserting that turning swaths of whole neighborhoods into mini-hotels causes multiple issues with noise, traffic, misbehaving tourists, etc. This has meant that opposition to the spread of the industry has united some on the local left and center for differing reasons.

The industry has its defenders, mostly gentry who own multiple properties and say they have a right to cash in on the tourism boom or that they can do what they wish with their property regardless of how it affects renters and other locals. They’ll usually downplay the impact of the industry, though this argument has held a bit less public sway since more information has emerged about the Airbnb’s massive impact here.

While these property owners will often cite examples of cash-strapped local homeowners renting out a room on Airbnb (who do exist, though from all evidence not nearly in the numbers that industry lobbyists claim) many of the people who’ve made this argument to Council actually own multiple properties and range from “fairly well off” to “very, very rich.” Indeed, this makes a lot of sense. While a local homeowner might make a bit of extra cash by renting out a room (which wouldn’t be affected by Council’s expanded ban), the major money goes to those who rent out whole homes and apartments at multiple locations and have the resources to hire cleaning and management companies to keep the tourists coming.

Some of those who’ve recently pushed back against bans on whole home or apartment Airbnbs include the West Asheville Business Association (citing it as an infringement on property rights), the Land of the Sky Association of Realtors (whose representative asserted that tourists are often preferable to renting to locals) and an assortment of River Arts District gentry who asserted that Council was bound to only pass zoning changes if it was zoning they wanted. At some points industry advocates have even compared the city’s enforcement efforts to the drug war, a somewhat grotesque analogy given that the drug war overwhelmingly targets low-income communities of color and Airbnb enforcement overwhelmingly affects well-off white people (who get fines, not prison).

To say these rationales didn’t go over well with the renters and affordable housing advocates opposed to the spread of Airbnb would be putting it mildly, and that’s only intensified the conflict.

The Airbnb wars collide tourism boom wealth and displacement, desperation and the big question of what Asheville’s neighborhoods will be in the future. Because the issues its touches are so key, the conflict remains fierce.

What’s Council proposing?

Tonight, Council will vote to ban whole home/apartment short-term rentals across nearly the entire city. You can read the whole, highly technical, proposal here.

Whole home/apartment Airbnbs are banned in most of the city, and have been since Asheville’s had modern zoning. But that didn’t stop property owners from illegally turning whole homes and apartments over to tourists.

In 2015 Council tried a two-pronged approach, allowing more “homestays” (the technical term for people renting out a guest room in a house they live in for less than a month) with permits and some limitations but increasing fines and enforcement against “short-term rentals” (the technical term for renting out a whole home or apartment to tourists for less than a month).

But there was one big catch: the existing ban and increased enforcement only applied in residential neighborhoods, leaving major districts like downtown, the RAD and Haywood Road exempt. Indeed, the industry boomed there, especially in downtown, in the process taking over studio space and rental housing that locals had previously lived or worked in. Officially, 63 housing units downtown turned from residential to Airbnbs over the past few years, but in a December meeting with Council committee, planning staff have acknowledged that only covers those who officially notified the city they were doing so, and many property owners probably didn’t.

Over the past year, pressure escalated on Council to seriously rein in the industry. The election results, as we’ll delve into in a moment, only reinforced that. Over the past few months the elected officials unanimously voted to ban whole home/apartment Airbnbs along all of Haywood Road and voted 5-2 (with members Cecil Bothwell and Keith Young against) to ban them in the entire River Arts District.

Now some Council members are pushing to make that ban nearly citywide. All future whole home/apartment Airbnbs would be banned throughout the vast majority of the city, including in downtown. The ones that remain (shutting down an existing short-term rental that had been allowed at the time is a complex legal process) would have to get an annual permit from the city, a level of increased scrutiny and regulation that would also make it more likely those would fade by attrition over time and convert into condos or rental housing (which don’t face the same requirements).

Are there any exceptions?

A few, and they might prove important. Indeed “what are the exceptions?” should definitely be a major question in tonight’s debate, because the documents prepared for Council are about as clear as mud, even to longtime city government watchers. But it looks like the new rules still leave at least two zoning areas — lodging expansion and mixed-use expansion — where whole home/apartment Airbnb-style rentals are allowed. While these don’t cover a huge area, they still provide a possibility for the industry to expand unless Council chooses to modify the proposal.

It’s also unclear how much these exceptions cut against Council’s wishes to rein in the industry throughout the city. It wouldn’t be the first time some city staff have buried an allowance for whole home/apartment short-term rentals in a zoning overhaul and not informed elected officials until pressed about it. The last time that happened, Council members pushed back pretty hard.

Also, some Council members and staff have disagreed with labeling this move a “ban,” but overall that’s an accurate word. However, developers can almost always request that Council waive its zoning prohibitions to allow a given project to go forward, and the expanded Airbnb ban is no different. In the current political climate elected officials would be pretty loath to do so, but it is technically possible.

As with many zoning overhauls there’s a lot going on here, and the devil’s in the details. There’s several areas of this proposal where I wish I could provide our readers with a little more information. But when I called senior city planning staff for clarification, they informed me that they’d been forbidden from speaking to the press.

Why now?

The issue certainly wasn’t new, and the impact of legal Airbnbs in taking up housing in areas like downtown was highlighted by keen observers as far back as 2015. But a recent combination of public pressure, elections and more data from the city have reversed the political tide on this issue.

As the industry’s grown larger, the impacts have become more obvious and in a relatively small city like Asheville, more people have been directly displaced or negatively impacted by Airbnbs or know people who have. While renters have historically been ignored by the local political establishment, more have started speaking up over the past year.

A key moment in a recent Downtown Commission meeting on the issue, for example, was renter Moira Goree sharing her story of losing housing three times in a year due to the Airbnb industry. She added that she was only safe from being kicked out of her current rental housing because it was in enough disrepair to make it unattractive to tourists.

Pressure’s even come from some more gentry-friendly quarters. The aforementioned Downtown Commission, for example, cited the need to keep a base of residents downtown and the increasing crunch on housing when it recommended that Council rein the industry in.

The 2017 elections also played a role, especially the primary results. The Airbnb industry’s biggest advocate on Council, Cecil Bothwell, failed to make it to the general election and other advocates of loosening restrictions also fared poorly. Most of the candidates who prevailed endorsed the step Council is considering tonight, and generally said they were in favor of ending whole home/apartment Airbnbs. Elections send a message, and also reflect overall changes in the city’s political culture. Notably, Council member Brian Haynes, who’d previously been open to less restrictions on Airbnbs, voted for both the Haywood Road and RAD short-term rental bans.

Lastly, until recently the city didn’t have solid numbers on how many whole units had been converted from housing to Airbnbs in the areas where they remain legal. But as those numbers have emerged, they’ve proven pretty alarming to Council and some staff. Principal Planner Shannon Tuch told a Council committee in December that the numbers were increasing fast enough that they were having to add to them by the week. In 2015 for example, just seven housing units in downtown (legally, anyway) converted into Airbnbs. In 2017 that rose to 44.

As news emerged late last year that developers were requesting to convert condos and apartments they were still building into Airbnbs, most of Council started pushing faster for citywide restrictions. The pressure’s even extended to some city committees that had previously pushed back against city attempts to rein in the industry. Last year the Planning Commission unanimously recommended against prohibiting whole home/apartment Airbnbs in the river district. Last week they voted 4-1 to move the city’s new ban forward.

Will the ban pass?

Right now, it looks likely, but nothing’s certain until the votes are counted. In late December, Council’s Planning and Economic Development Committee unanimously voted to move this proposal forward. That means that Vice Mayor Gwen Wisler and Council members Vijay Kapoor. Mayor Esther Manheimer has historically favored such moves, Council member Sheneika Smith endorsed this ban during last year’s campaigns and Haynes has recently voted for similar restrictions in other areas of town. Council member Keith Young has recently been the industry’s defender on the dais, and has espoused some pretty common pro-Airbnb talking points like downplaying the impact on housing. He also voted against the ban on whole home/apartment vacation rentals in he RAD.

While that’s an overwhelming majority, a lot can change very quickly in city politics. If you’d like to let a Council member know your opinion on this issue (or any other) and encourage them to vote a given way, you should contact them.

Is this fight over?

Not by a long shot. While the passage of this ban would represent a major victory for those looking to rein the industry in, and a major defeat for the industry, this battle’s going to continue on a lot of other fronts, especially when it comes to actually enforcing it.

There are major questions about if the city’s “homestay” rules are sufficiently enforced, or if they allow some de facto whole home/apartment Airbnbs to fly under the radar. The company itself even pushed to rewrite the city’s homestay rules in 2015 in a way that would have made them considerably harder to enforce.

There’s also the question of basement, garage and accessory apartments (or “accessory dwelling units” in planning jargon). As these are technically whole housing units, property owners are currently prohibited from renting them out to tourists. But some have pressed to do so, claiming it wouldn’t have a huge impact and the current Council’s somewhat open to various versions of that proposal. Their opponents counter that these are still housing units and plenty of locals live in them, especially in neighborhoods like North and West Asheville already hard-hit by short-term rentals. The Airbnb wars are going nowhere.

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