AIRBNB UNVEILS ‘COMMUNITY COMPACT’
Just a week after San Francisco voters rejected a ballot measure that would have dramatically increased regulation on home-sharing services such as Airbnb and VRBO, San Francisco-based Airbnb announced the Airbnb Community Compact. The plan would commit Airbnb to greater transparency about its business, pay appropriate tourist or hotel taxes, and try to address displacement of renters by landlords looking to do only short-term rentals.
The company was lambasted for anti-Prop F ads termed tone-deaf and insulting, spending more than $8 million to eek out a win over proponents who did no advertising. That close call apparently has Airbnb willing to address the greatest criticisms of its platform.
“When we started Airbnb, we couldn’t have anticipated all the ways hosts would use our platform,” Airbnb CEO Brian Chesky wrote on the company’s blog on Nov. 11. “We are proud of almost all of the activity that happens on our platform every day. But it’s become clear that we need to clarify what we will and will not tolerate in our community.”
Under the compact, Airbnb would report annually on its activity in a community, including things like the percentage of Airbnb hosts who are sharing their permanent home, the number of days a typical listing is rented on the service, its safety record, income earned by Airbnb hosts, and more. In addition, it will partner with individual cities to deal with their concerns over tax collection. Finally, the company pledged to work with communities dealing with “a shortage of long-term rental housing as a critical issue … to prevent short-term rentals from impacting the availability of long-term rental housing by ensuring hosts agree to a policy of listing only permanent homes on a short-term basis.”
LUXURY HOME MARKET COOLS, NOT CRASHES
In October, overall median sales prices for houses and condos in San Francisco recovered from a dip to reach $1.2 million. But for homes in the luxury market (priced starting at $2 million for homes and $1.5 million for condos), “the dynamic between buyers and sellers has fundamentally shifted, at least for the time being,” according to Paragon Real Estate in its November 2015 local market report.
There are many seasonal rises and dips throughout every year, so Paragon’s not calling it a crash; instead it says the market segment, which makes up about 20 percent of the city’s real estate, has cooled. It offers a few suggestions as to why: recent stock market volatility might have pushed high-asset owners to sell before things got worse, and high-asset buyers might have postponed their purchases until Wall Street stabilizes; pricing might have found its ceiling in the city and incentivized buyers to search neighboring communities for high-end homes; and the supply-and-demand equation is finally being affected by the luxury condos that are coming on-line.
“However, the luxury home market hasn’t ‘crashed’,” Paragon cautions. High-end homes are still “selling very quickly for very high prices amid competitive bidding. But it has markedly cooled, and the number of luxury home listings in San Francisco hit a new high in October. … It remains to see if this change is just a transitory market blip — such blips are not uncommon in financial or real estate markets — or the beginning of a longer term reality.”
SAN FRANCISCANS PAY UP FOR HOUSING
Residents of San Francisco pay more than 40 percent of their monthly incomes to cover mortgage payments, and they pay a whopping 47 percent of their incomes for rent, according to a November analysis by real estate website Zillow. The national average is 15 percent of monthly income for mortgages and 30 percent for rent, making San Francisco one of the most unaffordable cities for housing in the United States.
It has challengers, however. Renters in the Los Angeles area pay 48.8 percent of their monthly income, for example, and homeowners in San Jose pay 41. 6 percent for their mortgages.
“In general, paying a mortgage is more affordable than renting, and has been for some time. Unfortunately, many current renters aren’t able to realize the savings that come with homeownership because as home values and rents keep rising, it’s getting increasingly difficult to clear the down payment hurdle,” noted Zillow’s chief economist, Dr. Svenja Gudell.
“It’s not uncommon for a 20 percent down payment on even a modest home to represent savings of $50,000 or more in some areas,” he added. “And that number itself is a moving target, rising as home values escalate and harder to achieve as more money goes to landlords and less goes to savings. … It’s no wonder that many current renters are waiting longer to buy a home.”
“The priorities of the city right now [are] not to support middle-class people. It seems to support only millionaires. I think that we could more easily accommodate working professionals and white-collar, middle-class families if we weren’t bending over backwards to accommodate those with enormous sums of money.”
—Sara Shortt, Executive Director, Housing Rights Committee of San Francisco, Aljazeera America