Airbnb Hosts Accused of Price Gouging at Mardi Gras

Airbnb Hosts Accused of Price Gouging at Mardi Gras

Mardi Gras is an annual event of drinking and excess, hosted annually by the wonderfully Creole city of New Orleans. Although the celebration extends throughout the entire city, the epicenter is the French Quarter. More than 1.4 Million people attend Mardi Gras each year, 3-times the number of residents, making this a destination for travelers around the globe. And with all destination events, tourists need places to stay. And most will want to stay in the heart of the action.

On February 7th, 2018, Airbnb Watch sent out a press release tracking the nightly rental rate of twelve Airbnb hosts over Mardi Gras weekend (Feb 13-14) then compared those to the rates the same hosts posted one week after Mardi Gras, noting a significant increase in rate the week prior. The organization referred to this increase as price gouging. Airbnb Watch is a project of American Family Voices, and touts themselves as bringing together a coalition of organizations and concerned citizens dedicated to a common goal: protecting communities and travelers by exposing commercial hosts who use sites like Airbnb to run illegal hotels in residential properties under the radar and by making sure all hotel businesses play by the same rules. Under this auspice, the organization paints with a wide brush, assuming Airbnb hosts in New Orleans are operating illegal commercial business and not paying appropriate taxes. One important thing to note is that Airbnb is a property-sharing platform that allows hosts flexibility to rent unused, furnished spaces as they see fit, and for a price the market dictates.

Mardi Gras is a luxury, destination event. Visitors expect to spend more in New Orleans during that week in February, than any other time of the year. But what this press release fails to take into account is that February is a historically bad month for Airbnb hosts around the world. I am a member of many international Airbnb Facebook groups and message groups where this is widely documented. Full-time hosts drop their rates ridiculously low in order to attract guests and receive a small portion of what they get during regular season. That being said, a significant increase during one of the slowest months of the year to the busiest time in the French Quarter is not as significant as Airbnb Watch would lead to believe. A better comparison would be comparing “peak season” pricing (June-August) and Mardi Gras. The difference wouldn’t be nearly as significant [or newsworthy]. I speak from deep understanding of this. I host several properties in Louisville, KY, during the Kentucky Derby…the greatest 2 minutes in sports. Houses at this time go anywhere from $1,200 per night to $9,999 per night, depending on location, number of bedrooms, and amenities. Hotel stays at 3 and 4-star properties range from $1,200 per night to well over $3,000 per night for a single queen suite. The press release also quotes Chris Lehane, Airbnb’s Head of Global Policy and Public Affairs, as saying, “It’s pretty clear that our hosts don’t engage in gouging. When demand for Airbnb increases, supply also tends to increase.” This is true in any city that has a well-attended annual event. Louisville officially has over 1,200 Airbnb hosts. Only 220 of those hosts have their properties listed year-round, meaning a large majority are “seasonal hosts” and only list their houses for short periods of time. And my intuition tells me they are listing for the Kentucky Derby, and charging a premium.

A quick search on Booking.com found that standard single queen rooms at French Quarter-adjacent, 3-star hotels were advertised for an average of $275 per night for the same [Mardi Gras] weekend. One property on the Airbnb Watch spreadsheet (Hosted by Southern Girl Property Management) was an 8 bedroom, 5-bathroom house renting for $1,500 per night. Similar hotel accommodations with 8 beds would total $2,200 per night, an increase of $700. But comparing an entire house to a single hotel room is not an easy comparison. When traveling with a group, or wanting to relax, there is nothing like having an entire house to oneself. The kitchen is available to cook meals so not every meal has to be at a restaurant and the living room allows everyone to gather and have conversation. The entire setting allows one to “live like a local” and not just a transient guest. The experiences are unequivocal.

Below is the chart Airbnb Watch provided with their press release with select hosts:

Airbnb’s in New Orleans Mardi Gras
Feb 13-14 Rate/Night
Feb 20 Rate/Night $ Rate Increase Percent Increase
Spacious Downtown NOLA $945 $175 $770 440%
Jazzy Penthouse $1,600 $332 $1,268 382%
Hosted by Nola $1,800 $299 $1,401 468%
Hosted by New Orleans Properties $1,600 $188 $1,412 751%
Hosted by Nola Property Management $2,500 $1,000 $1,500 150%
Hosted by Angela $1,280 $380 $900 237%
Hosted by Carolyn $975 $300 $675 225%
Hosted by Sam $1,688 $800 $888 111%
Hosted by Sam $950 $310 $640 206%
Hosted by Southern Girl Property Management $1,250 $425 $825 194%
Private Bedroom $1,000 $46 $954 2,007%
Hosted by Alexander $1,000 $56 $944 1,685%
*All rates and unit availabilities subject to change per host preference

It is clear that Airbnb Watch has little interest whether or not Mardi Gras attendees have access to affordable accommodations, as they define them. What is clear is an ulterior motive to stop short-term rentals, which would completely devastate the travel and tourism industries within most major cities. Hotels alone cannot keep up with demand for travel within the US. And Americans are traveling in larger groups of friends and family, which puts many traditional hotels out of reach. If a thoughtful investor can legally take a property, well appoint it, and live up to the standards of a gracious, 5-star host, then why rain on their Mardi Gras parade?

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Smoke Detector Regulation for Short Term Rentals in Louisville KY

Smoke Detector Regulation for Short Term Rentals in Louisville KY

Smoke Detector Regulation for Short Term Rentals in Louisville KY

Ordinance 156.202

In all dwelling units, smoke detectors powered by a hard wire AC primary power source or a self-monitored, non-removal ten-year lithium battery shall be installed and maintained after the effective date of this section. Single station detectors presently installed utilizing standard batteries may continue to be used as long as the units remain operational. Should an inspection of the concerned properties reveal these units out of service due to a low or no battery, it will be cause to replace the units with at least smoke detectors powered by a hard wire AC primary power source or a self-monitored, non-removal ten-year lithium battery.

In order to comply with this section, only ionization or photoelectric type detectors listed by a nationally recognized testing laboratory shall be installed.

Smoke detectors shall be installed in accordance with applicable NFPA Standards and the manufacturer’s recommendations. Detectors may be ceiling or wall mounted, provided that they shall be mounted at a minimum of four inches and a maximum of 12 inches from the ceiling, and not closer than four inches from the point at which the ceiling and wall meet.

In a dwelling unit, which contains a well-defined sleeping room separated from the other activity areas of the same unit, the detector shall be located in the corridor within the unit or interior area giving access to the rooms used for sleeping purposes. Where sleeping areas are separated and/or where a single smoke detector will not adequately service all sleeping areas, there shall be a smoke detector installed adjacent to each sleeping area. In a rooming unit the detector shall be centrally located.

In a dwelling containing two or more dwelling units or any rooming unit, in addition to the requirements for individual smoke detectors in each dwelling unit or rooming unit, detectors shall be placed in centrally located common areas so that smoke detectors will adequately service all sleeping areas.

Installation and maintenance.

The owner of a dwelling shall be responsible for supplying and installing in an operable condition, the required detectors and for providing the manufacturer’s maintenance and testing instructions to the tenant.

The owner of a dwelling shall be responsible for maintenance and testing of detectors , in accordance with manufacturer’s instructions, which are located in common areas and/or detectors in rooming units where the tenant usually has periods of occupancy, (less than 30 continuous days, such as, hotels, motels, tourist homes).

The tenant shall be responsible for maintaining and testing the detectors, in accordance with the manufacturer’ instructions, which are within his or her exclusive control during the life of the tenancy. The tenant shall be responsible for notifying the owner in writing when detectors become inoperable, and the owner shall have ten days after receipt of such written notice in which to replace or repair the detectors in an operable condition. In the existing single station, battery-operated types of detectors , battery replacement will not be allowed. In the event existing detectors with standard batteries are found inoperable, the units shall be replaced with at least smoke detectors powered by a hardwire AC primary power source or a self-monitored, non-removal ten-year lithium battery.

At every change of tenancy in all multi-family residential units and dormitories, it shall be the duty of the owner to test and ascertain that those detectors contained in the unit are in operable condition, and if not, the owner shall be responsible for placing them in operable condition. Further, in the event existing detectors with standard batteries are found inoperable, the owner shall be responsible for replacing such detectors with at least smoke detectors powered by a hardwire AC primary power source or a self-monitored, non-removal ten-year lithium battery.

In all hotels, motels, rooming houses or tourist homes it shall be the duty of the owner to test such detectors on a regular basis in accordance with manufacturer’s instructions, and the owner shall be responsible for maintaining such units in an operable condition. A log of smoke detector inspections and findings shall be maintained by the owner, and shall be made available to fire inspectors upon request.

It shall be the responsibility of the property owner to install at least smoke detectors powered by a hardwire AC primary power source or a self-monitored, non-removal ten year lithium battery before transfer of the property to a new party. A signed affidavit of the property owner, given to purchaser, seller, and real estate agent before transfer will suffice in meeting this requirement.

Where AC powered detectors have been installed and maintained in accordance with previous ordinances, they shall continue to be used in accordance with the manufacturers installation and maintenance guidelines. Such smoke detectors that are found to be non-operational, damaged, or missing shall be replaced with a hard wire AC powered smoke detector of similar or like-type.

 

The information above was taken from the Louisville/Jefferson County Metro Government Ordinances, provided by American Legal Publishing Corporation, Chapter 156: Property Management and Maintenance, and can be accessed here.

This Code of Ordinances and/or any other documents that appear on this site may not reflect the most current legislation adopted by the Municipality. Key Source Properties provides these documents for informational purposes only. These documents should not be relied upon as the definitive authority for local legislation. Additionally, the formatting and pagination of the posted documents varies from the formatting and pagination of the official copy. The official printed copy of a Code of Ordinances should be consulted prior to any action being taken.

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Setting Up A Short Term Rental In Louisville KY

Setting Up A Short Term Rental In Louisville KY

Navigating the short-term rental legal process

Setting up a short-term rental listing in Louisville, KY is not as difficult as you would think. Many parts of the country are plagued by heavy regulation that can increase the barriers-to-entry for newcomers and those unfamiliar with the process. Louisville’s short-term rental climate is very accepting, as long as your property fits the guidelines and you follow the proper legal requirements.
 
A short-term rental is defined as a rental that is 29 consecutive days OR LESS.  Rentals of thirty (30) days or more are not short-term rentals, by law, and therefore not governed by short-term rental laws or zoning requirements. Tax obligations are due to both the state of Kentucky and City of Louisville for all short term rentals, and are as follows:

State of Kentucky:
Sales Tax: 6%
Transient Tax: 1%

City of Louisville:
Hotel or Bed Tax: 8.5%

Not all properties can be short term rentals

Property types that qualify for short-term rentals in Louisville, KY:
 
Single Family Residence
Duplex
Condominium*
Commercial Building**
 
*Condominium owners must have written permission from the association board. Residentially zoned condominiums must be owner occupied. Commercially zoned condominiums do not have an owner occupied requirement.

**Commercial Buildings must be zoned C-R, C-N, C-1, C-2 or C-3 and the property meets the following criteria: 1) within 200 feet of a TARC route, 2) within .75 miles of a public park, 3) within one mile of a National Register District or local Preservation District. 
 
Property types that DO NOT qualify for short-term rentals in Louisville, KY:
 
Multi-family Dwellings (3 or more units under a single roof)
 
You can have more than three listings on a single plot or land (example: The main house is a duplex and the back yard has a carriage house), but not under the same roof.
 
Commercial buildings can also have more than three (3) short-term rental units.

Short Term Rentals in Louisville Condos

All Condos must have a CUP, regardless of owner-occupancy.

Any condo within any R zone:

1) Requires a CUP
2) Must be primary residence of owner
3) Must have written confirmation of permission from condo association

Registration and Permitting –

If the property you are looking to rent is your primary residence, you are only required to register with Louisville Metro Planning and Design Services ANNUALLY, pay $25, and register with Louisville Metro Revenue Commission for payment of occupancy tax.

If the property you are looking to rent is NOT your primary residence, or is in the TNZD (traditional neighborhood zoning district), you must apply for and obtain a conditional use permit (CUP) from Louisville Metro Government in order to legally operate a short-term rental.

Additional short term rental rules to follow…

Other Rules:

  • Obtain a CUP (if necessary)
  • Register annually with Louisville Metro Planning and Design Services
  • Remit 8.5% Occupancy Tax to Louisville Metro Revenue Commission
  • Remit 6% sales tax and 1% transient tax to the State of Kentucky
  • Meet smoke detector requirements
  • Post an evacuation plan
  • Do not serve or sell food or alcohol
  • Do not post outdoor signage as advertisement
  • Occupancy limitations are 2X the number of bedrooms, plus four (4)
  • Failure to register is the equivalent of operating without a permit
  • STR regulations do not supersede lease agreements, homeowner’s association bylaws, covenants, deed restrictions, or any other agreement, law or regulation that prohibits subletting or use of your dwelling as a short-term rental. 
  • The following cities that retain independent zoning authority have not adopted a zoning ordinance specifically allowing short term rentals: Anchorage, Douglass Hills, Graymoor-Devondale, Hurstbourne, Indian Hills, Jeffersontown, Lyndon, Middletown, Prospect, Shively, St. Matthews and St. Regis Park. Therefore, check regulation before beginning the STR process in these areas.

Helpful links:

Applications

1. Short Term Rental Annual Registration Application Form (In Person or Mail Submittal Option)
2. Short Term Rental Annual Registration Application Form (Online Submittal Option) 
3. Short Term Rental CUP Pre-Application
4. Short Term Rental CUP Formal Application

Helpful Links

How to register your short term rental 
LOJIC map to find your property’s zoning
Frequently Asked Questions
Metro Council Short Term Rental Ordinance Amending Metro Code (Title XI, Chapter 115.515–115.521)
Metro Council Short Term Rental Ordinances Amending Land Development Code
Smoke Detector Requirements (Title IX, Chapter 94.02)
Map of Metro Council Zoning Authority Area
Process for Conditional Use Permit approval
Louisville Metro Revenue Commission

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Short Term Rental Winterization

Short Term Rental Winterization

Every homeowner knows that as the weather gets colder, there are a few projects to add to the to-do list to be sure the home is ready for the chilly months ahead. But what about those who own short-term rental properties? What needs to be done to those homes? If you let maintenance get away from you, you’re in for some hefty repair bills, so skip the headache and use this list to check off those tasks that are all too easy to forget. It will increase the longevity of your property while also ensuring your guests have a completely problem-free stay.  Here are a few steps to help with short term rental winterization. 
 
1. Clean Out Those Gutters
It’s one of the most common projects of the season but sometimes also one of the most dreaded. However, by removing leaves from your gutters, you prevent the later formation of ice dams, which occur when water cannot drain through the gutters and instead freezes, leading to the water and snow being trapped on the roof through the winter. The accumulation can eventually seep into the home and cause water damage. However, this can all be avoided with a quick clean-out of the gutters.
 
TIP: Take this time to cut down overgrown brush or tree limbs that may be close to gutters. Use this inspection time to look for openings in the house that could be an access point for small animals or rodents that will be seeking refuge from the elements. Not only can they disturb guests, but they can eat electrical wiring and insulation.
 
2. Give the Furnace a Checkup
It’s been a long, hot summer where the HVAC system hasn’t had to do any heating at all. Before you kick it on for the first time you have guests this winter, consider calling in a professional to make sure everything is in good, safe working order and save yourself the frustration and embarrassment of a guest calling in the middle of the night saying there’s no heat.
 
TIP: HVAC issues are the most common source of bad guest experiences in cold months. Keep 2-3 space heaters in a closet for guests to use in the event of an HVAC issue. Look for one that doesn’t have exposed heating elements that can cause burgs or are a potential fire hazard. I like ceramic heaters that automatically shut off if they turn over.
 
3. Replace Furnace Filters
Furnaces need regular maintenance in addition to their once-a-season tuneups. Find time between guests each month to go in and change furnace filters so that airflow stays clean and energy-efficient. This should be done every 2-3 months. 
 
TIP: Be sure to set a reminder on your calendar and keep a supply on site so your cleaner or property manager can handle the replacement for you. 
 
4. Reverse the Ceiling Fans
This one’s easy: when the cold weather gets here to stay, go in between guests and reverse all the ceiling fans. By having them run clockwise through the winter, they will circulate the hot air through the room, keeping the house warmer and the guests comfier for cheaper.
 
5. Caulk It Up
Walk through the space and determine if there are any drafts or gaps around the windows and doors. If there are, bring in some caulk to seal it, preventing brisk breezes and a loss of heating. 
 
TIP: Don’t forget about doors and windows as well. Draft stoppers and new weather stripping may be needed in places to help keep the heat in and the cold out. Guests like to be comfortable during their stay, and sometimes that means turing up the heat.  The more heat we keep in the house the more money kept in the wallet. 
 
6. Run the Pipes
If you know it’s going to be a literally freezing night and you don’t have guests, go to the property and run some water through the pipes to ensure they don’t freeze and cause massive damage. It can be hard to remember, so set a reminder on your phone the moment you learn that temperatures are plummeting.
 
7. Keep It Leaf-Free
Fortunately as we progress into winter, this task becomes less and less necessary as all the leaves finish falling, but for now, it’s a job that must be done. Prevent your property from looking like the Addams family manor by raking up and disposing of all leaves. A clean exterior makes an unequivocal impression on guests, so get those leaves up to guarantee a pleasant entry.
 
8. Stock Up on Snow Equipment
Depending on the exterior driveways/walkways, think about stocking the property with snow removal equipment so guests don’t wind up snowbound. Shovels are the obvious choice but also consider stocking salt to prevent pavement freezing. If we’ve had a major snowfall prior to a guest’s arrival, stop by the property and be sure all walkways are clear of snow, reducing liability risks and ensuring guest safety.
 
9) Check Carbon Monoxide Detectors
In winter months, windows and doors are kept closed as much as possible. This can cause the air inside the house to become stale, which is a perfect way for carbon monoxide fumes to accumulate.  Be sure to test carbon monoxide detectors to ensure they are in good working order. And know the signs of carbon monoxide poisoning incase a guest becomes ill. 
 
10) Turn Down The Heat Between Guests
If your short term rental is not located in an urban area or in a popular winter or ski destination, chances are that winter months can be slower, which means time between guests may be longer than high season. Be sure to adjust your thermostat accordingly by turning the temperature down to a low, but comfortable setting between guests. Smart thermostats allow you to adjust the temperature remotely. But for those who have traditional thermostats, make sure to talk to your cleaners about adjusting the temperature for you.  I prefer 65 degrees. This temperature will protect your pipes, and guests can make adjustments when they arrive. 
 
Bonus Tip: Batteries
This isn’t so much weather-related as it is general maintenance that easily falls out of mind. Every so often, go to the property and change out batteries in all remotes, smoke detectors and small battery-operated appliances to keep guests annoyance-free during their stay.
 
TIP: Keep an extra supply of AA and AAA batteries in a kitchen drawer for the late night calls when TV remotes stop working. 

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