Airbnb

[arcturus]

What's your thoughts on this?

 

http://www.mlive.com/news/grand-rapids/index.ssf/2014/07/airbnb_compromise_in_grand_rap_1.html#incart_river_default

[x99]

In a nutshell:  It's a stupid debate forwarded by an overly zealous city commission that feels the need to have a regulation, rule, or ordinance for everything, no matter how trivial.  The number of listings in GR on airbnb has never been substantial.  Currently, there are less than fifteen listings, and most have been around for quite some time now.  Sadly, this will have the predictable effect of driving it from a safe market-based platform which has self-regulated quite well to an underground platform, or just Craigslist listings.  It won't go away.  It will simply go underground.

 

On a more specific level, the whole ordeal just makes us look like a bunch of busy-body troglodytes.  The way we have dealt with bed and breakfast operations in this city is shameful, and most of it has been driven by a very few noisy neighbors and B&B owners who have nothing better to do than pursue their favorite pastime--whining.  I would much rather have neighbors running an owner-occupied B&B than having the place stocked with up to anywhere from 8-16 semi-transient college students throwing keggers, or possibly some drug dealers, or other rotten neighbors, over whom neither I nor anyone else other than the landlord have any control.  And even then, the landlord's control, oversight, and presence is limited.  Airbnb (or a B&B operation, generally) avoids those problems, and allows homes that otherwise might be too large to be used for single family occupancy to be so used. I recall the neighbor harping that shut down a possible large B&B on a huge site on Lafayette.  No B&B, and instead the place was carved up into scores of condos and rental units.  So that worked out great.

 

What ought to be done is this:  Reduce the outrageous B&B fees and rental and inspection fees, entirely.  Just get rid of them.  Ultimately, these are just rentals--albeit ones that are generally far preferable to long-term rentals, in my view.  For any type of rental, you just go on the City Hall website, get a license for $20, regardless of the type of license, and you're done. Extant noise and nuisance ordinances cover the rest.  Move to a complaint based enforcement system A health, safety, noise, or nuisance violation which is investigated and substantiated costs you $100.  Three violations in a year not corrected within a week, or 8 violations in a year total, you lose your license for 6 months for the unit in question, beginning at the end of the current tenant's tenancy.  Happens again, you lose it for a year.  Done.

 

Why won't this happen?  Current B&B owners will whine because they may have more competition.  (Who do you think griped in the first place--you can bet it was someone paying a $2000 annual protection payment to City Hall).  Housing inspectors will whine because they'll be out of their jobs.  And, of course, the usual "public-interest" busybodies with excess time on their hands, although my somewhat vicious enforcement mechanism might make them happy...

 

[EDIT:  Read some of the linked articles. A particularly amusing quote at http://www.mlive.com/news/grand-rapids/index.ssf/2014/06/read_homesharing_creed_preache.html:  "'We do not want to see our beautiful neighborhood, its rehabilitation so many years in the making, turned into a lodging district,' Lucas and Ondersma wrote to the commission."

 

Wait a minute, this can't be the same Phil Ondersma that lives in a gigantic house with lots of extra units that he rents out to whomever he pleases, whenever he pleases, presumably to help pay his bills, can it?  Units that he could have converted back to his housing space if he really wanted to, so as to reduce the appearance of his neighborhood being a "lodging" district.  Naw, that just wouldn't make sense at all...Can't be that Phil Ondersma.]

[RegalTDP]

^^^ What he said.

 

These kinds of "controversies" are what set big cities apart from small towns.  In this instance GR is behaving like a small town.

 

Shouldn't the city want to show off Heritage Hill to out of towners?  Here's a way to do it, and it doesn't cost anything.

[Jippy]

A level of regulation is required to ensure adequate safety and standards. Additionally, it is necessary to provide some mechanism of "booting" locations out of the system if they become problematic. Zoning is tried and true form of ensuring people have a safe expectation of their investment, whether it be a home or a business. I love the idea of evolving into allowing more concepts like Airbnb and uber, but their is certainly a balance: a balance of granting people the ability to enjoy their homes in residential areas without excessive intensity, the balance of ensuring adequate consumer protection, and the balance of evolving into a new, more organic sharing economy.

 

The City is trying to walk that line. The current proposal might be a bit too restrictive, but they are on the right track. I am fine with the fee, but not thrilled by the notification and 1-room restriction. My family has rented full houses on Airbnb in the past and enjoyed it immensely. Much better than renting 2-4 hotel rooms.

[organsnyder]

It's my understanding that the city is actually loosening regulation - not tightening it. Yes, the regulations weren't written with the "sharing economy" in mind and need to be revamped, but they are on the books.

 

While not painless, this process seems to be playing out exactly as it should:

1. The city works to enforce the existing regulations as they are on the books.
2. After an outcry, the city takes the time to study the issue and come up with proposed changes.
3. The proposed changes (while perhaps not extensive enough) allow room for the emerging market to grow.
4. In the future, the regulations can be further loosened, based on the experience in the trial phase.

It's much easier to gradually loosen regulations than it is to loosen them too far and retighten them. Too little regulation would have its own host of problems. I like Jippy's response - rather than complaining about how draconian the city is, he points out legitimate concerns with the proposed rules. Those concerns (if not addressed now) can be addressed when the regulations are reviewed in the future.

 

Also, I can sympathize with the existing hotel owners. They've built their businesses within the current regulation structure (and the expenses that can entail), and are now threatened by a new lobby that's trying to deregulate the market, potentially upending legacy business models. Of course, we absolutely should not use regulation to prop up obsolete business models, but we should tread carefully to make sure we're maintaining a stable business climate.

[organsnyder]

These kinds of "controversies" are what set big cities apart from small towns.  In this instance GR is behaving like a small town.

 

This is exactly backwards. Look at the fights that Uber is having with the taxi lobbies in places like NYC, Chicago, and DC. Merits of regulation aside, if GR is over-regulating, than it is behaving more like a big city than a small town.

 

Though, from the reports I've seen, I'd actually argue that GR is behaving more like a small town - in a good way: This process has been fairly open, and leaders have shown themselves willing to listen to (and actually consider) community input.

[x99]

A level of regulation is required to ensure adequate safety and standards. Additionally, it is necessary to provide some mechanism of "booting" locations out of the system if they become problematic. Zoning is tried and true form of ensuring people have a safe expectation of their investment, whether it be a home or a business. I love the idea of evolving into allowing more concepts like Airbnb and uber, but their is certainly a balance: a balance of granting people the ability to enjoy their homes in residential areas without excessive intensity, the balance of ensuring adequate consumer protection, and the balance of evolving into a new, more organic sharing economy.

 

The City is trying to walk that line. The current proposal might be a bit too restrictive, but they are on the right track. I am fine with the fee, but not thrilled by the notification and 1-room restriction. My family has rented full houses on Airbnb in the past and enjoyed it immensely. Much better than renting 2-4 hotel rooms.

 

We'll agree to disagree about the need for the level of zoning restrictions that Grand Rapids has imposed, and their impact on a city's ability to change, grow, and adapt. For a city of its size, the city code and zoning are absolutely insane.  Actually read the zoning code.  You will be appalled.  Recall that this city, when it was growing the most, had no such onerous code.  The suburbs, where the growth is, don't have all of these codes and outrageous fines, fees, and taxes either.  Ponder that one. 

 

Ponder that residential zoning variances cost $1500.  $1750 for a mother in law apartment over the garage--the "special land use" designation.  That's the same fee they whack you with to open a B&B.  This is bureaucratic theft and is arguably illegal under Michigan statute which requires such fees to be "reasonable".  How do you justify as reasonable something which is priced higher than it is almost anywhere else in the nation?

 

The planning commission packet is at

 

http://grcity.us/design-and-development-services/Planning-Department/PlanningCommission/PC_EPACKET_6_6_14.pdf

 

It's remarkable how many hours of valuable planning time have been consumed on what ought to be a non-issue.  Here's a good take-away, though:  There are only two B&B's remaining in GR.  The rest have all closed or failed.  In three years there has never been a complaint about Airbnb.  60+ pages of crap over something maybe 10-15 people are doing, and no one complains about.  The city basically wants a cut, and to shove their nose in.  Just like they want a $75 initial bit with $55 a year annually for having a home office and telecommuting.  Anyone actually pay that fee?

 

There are some things I really like about this city.  Like my house and proximity to work.  Any time I have to read about anything having to do with City governance, I feel like I need a shower and a drink.  Does no one have the good sense--ever, about anything--to say, "you know, just live and let live.  Who really cares?  Do we really need an ordinance for everything under the sun?"

[GR_Urbanist]

I think what the city is asking for is perfectly reasonable.

 

These guys want to operate a hotel out of a home on a residential street, and for some reason dont want to pay any (or many) fees, abide by any regulations, or have to actually notify the people that live around it that this home is going to have a continuously rotating set of people coming and going all of the time? Do these places have to keep records of whom stays there?

 

And then on top of that, what if one of these places are located on a street where not everyone has a driveway? Now homeowners will have to fight with BnB guests to park by their own home.

 

Just because Air BNB is some cool trendy thing right now, does not mean that the city should just say "go nuts", because being hip is more important than being sane. As a person that lives in the area where you might see several of these pop up, I think we that own homes here deserve to be informed, and to know that the city keeps tabs on these establishments.

[Veloise]

.... I recall the neighbor harping that shut down a possible large B&B on a huge site on Lafayette.  No B&B, and instead the place was carved up into scores of condos and rental units.  So that worked out great...

 

That applicant came in with a terrible track record, and attitude about it. "What does 'event' mean?" And no consideration for the neighbors having to deal with their hosted wedding guests swinging by their tails from other people's trees.

 

If you really want a variance, place your hat in your hand and don't act like you're doing the city/neighborhood a favor.

[GRDadof3]

I can't believe this issue is being given so much attention. Is there a smiley of "rolling eyes until my head hurts?" Like the chicken ordinance and food trucks. Even HOLLAND of all places passed a reasonable backyard chicken ordinance in like a week.

[x99]

Sort of related to this thread.  The Leonard at Logan B&B is for sale:  http://www.grar.com/property/mls/15008213

 

It can be yours for only $1.25 million.    I feel bad for them if they actually have anywhere close to that much into it.   Perhaps they were actually telling the truth when they claimed they could not survive without corporate lunches, weddings, small group catering, etc.  Hmmm...

 

I ran some rough numbers based on national averages, and I don't see how you could keep one of these things open in Grand Rapids without having all of the stuff that was banned.  When they included inside functions with anyone who was not a guest on the ban list, they essentially put this category of semi-professional, high end B&B out of business.  It's a lonely old lady's game now (well, and Airbnb).

 

FWIW, the rough maths on this are as follows:  Assuming 7 rooms (more than code technically allows) at 40% average occupancy at $150 a night, annual revenues cap out around $150k.  A hands-off rental property runs a 50% expense ratio.  A B&B inevitably is worse, say 65-70%?  So you keep maybe $45-$55k a year.  Pay that to yourself in salary, and you have no profit.  In other words, a worthless business.  There is no way to make this financially viable as a business without hosting events.  At least, none that my feeble mind can conjure up.  But maybe the proprietors of Leonard at Logan have stumbled upon the magic sauce.

[GRDadof3]

Sort of related to this thread.  The Leonard at Logan B&B is for sale:  http://www.grar.com/property/mls/15008213

 

It can be yours for only $1.25 million.    I feel bad for them if they actually have anywhere close to that much into it.   Perhaps they were actually telling the truth when they claimed they could not survive without corporate lunches, weddings, small group catering, etc.  Hmmm...

 

I ran some rough numbers based on national averages, and I don't see how you could keep one of these things open in Grand Rapids without having all of the stuff that was banned.  When they included inside functions with anyone who was not a guest on the ban list, they essentially put this category of semi-professional, high end B&B out of business.  It's a lonely old lady's game now (well, and Airbnb).

 

FWIW, the rough maths on this are as follows:  Assuming 7 rooms (more than code technically allows) at 40% average occupancy at $150 a night, annual revenues cap out around $150k.  A hands-off rental property runs a 50% expense ratio.  A B&B inevitably is worse, say 65-70%?  So you keep maybe $45-$55k a year.  Pay that to yourself in salary, and you have no profit.  In other words, a worthless business.  There is no way to make this financially viable as a business without hosting events.  At least, none that my feeble mind can conjure up.  But maybe the proprietors of Leonard at Logan have stumbled upon the magic sauce.

 

 

Who's banning what? Is there a new city ordinance you're referring to?

[egrguy]

They were denied the ability to host gatherings as x99 said by the city. I think they had requested to host said # of events yearly but had been denied and could only have B&B activities only.

[x99]

Who's banning what? Is there a new city ordinance you're referring to?

 

The ordinance was modified a couple years ago to define an "event" as pretty much anything that would have involved the presence of any "non-guest" at the facility, period.  Before, events were only "outside" functions.  Want to have a bunch of old ladies over to knit?  Event.  Family Christmas party?  Event.  Small board meeting?  Event.  Guest has a friend over?  Event.  Call in a caterer?  Event.  Operating like this (assuming industry norms) and still making a reasonable profit (unless you count the house as "free") would seem to be almost impossible.

[GRDadof3]

The ordinance was modified a couple years ago to define an "event" as pretty much anything that would have involved the presence of any "non-guest" at the facility, period.  Before, events were only "outside" functions.  Want to have a bunch of old ladies over to knit?  Event.  Family Christmas party?  Event.  Small board meeting?  Event.  Guest has a friend over?  Event.  Call in a caterer?  Event.  Operating like this (assuming industry norms) and still making a reasonable profit (unless you count the house as "free") would seem to be almost impossible.

 

Ah. Seems like I was just saying a little while ago that the city has been tending to lean "anti-small-business" in the last few years, unless they get a lot of public backlash or a collective pushback from the business community. Would be nice to have a pro-business mayor, even if part time.

[Veloise]

The ordinance was modified a couple years ago to define an "event" as pretty much anything that would have involved the presence of any "non-guest" at the facility, period.  Before, events were only "outside" functions.  Want to have a bunch of old ladies over to knit?  Event.  Family Christmas party?  Event.  Small board meeting?  Event.  Guest has a friend over?  Event.  Call in a caterer?  Event.  Operating like this (assuming industry norms) and still making a reasonable profit (unless you count the house as "free") would seem to be almost impossible.

 

This was a code enforcement issue, unrelated to anything in the mayor's office.

L@L has insufficient off-street parking for "events," so visitors and guests were lining the adjacent neighborhood streets. Even with valet parking, it seems there were stacks of cars (um, linear, not literal) outside of neighbors' homes. And although the fun was supposed to conclude by 10 pm, add adult beverages to the mix and participants can't tell time.

 

Biggest turn-out I've ever seen at a BZA meeting.

[x99]

This was a code enforcement issue, unrelated to anything in the mayor's office.

L@L has insufficient off-street parking for "events," so visitors and guests were lining the adjacent neighborhood streets. Even with valet parking, it seems there were stacks of cars (um, linear, not literal) outside of neighbors' homes. And although the fun was supposed to conclude by 10 pm, add adult beverages to the mix and participants can't tell time.

 

Biggest turn-out I've ever seen at a BZA meeting.

 

It was not a code enforcement issue, entirely.  When they opened the place, an "event" was only something outside according to any sane reading of the zoning code.  The code was later amended after lots of agitation by a few choice individuals.

 

The sad part of this is that if you review the zoning file and the letters that were submitted, almost all of the neighbors who bothered to write their own letters and actually lived within a couple hundred feet of the place (many next door) said they had never had any noise problems, or significant traffic or parking issues.  Most of them liked the place.  There were one or two people who hated the place, and went around raising hell about it. (Same set of nitwits, generally, that were responsible for the Airbnb nonsense.)

 

This was a great B&B that showcased a great urban neighborhood to people from all over the country, and did it in fine style.  This is sort of a sad ending (even if the place is still limping along) to a long running saga.  I can't imagine you take a  crazy gamble advertising a price like that if you have much of a chance of making it.  If they close, there will only be one proper B&B left.  I suspect that one is heavily cheating on the "events" code.  One neighbor with a grudge could likely take them out, too.

[jas49503]

  If they close, there will only be one proper B&B left.  I suspect that one is heavily cheating on the "events" code.  One neighbor with a grudge could likely take them out, too.

 

FYI, I doubt that.  I live very near the B&B and I can only remember one event in the last two years.  there may have been more but the point is that they are very infrequent and the parking problems that they would cause are non-existant. 

 

Nobody goes into to the B&B business to get rich. at best it is a way to subsidize living in a grand old house.