Northwest Indiana is home to miles of Lake Michigan shoreline, unique attractions and exceptional festivals and events. Some cities and towns are fortunate to have residential areas steps away from these attractions. Residents who own these homes are lucky to have direct access to our region’s greatest tourism destinations. While some of these homeowners live in these locations permanently, others may use these residences part-time.
Recent efforts to participate in the “sharing economy,” or the economic model based on sharing underutilized assets for monetary benefits, have enticed homeowners into making their homes available for nightly rentals by strangers using websites like Airbnb, VRBO, HomeAway, and even Craigslist. This practice is dangerous for all involved — owners, neighbors and neighborhoods.
When searching for a new home, individuals may seek communities that are considered safe and quiet. Their search may bring them to one of the communities where homeowners serve their homes up as hotels for travelers. Unknowingly, new residents are now in a neighborhood they correctly thought was zoned as residential, where they thought it would be quiet and peaceful, but other owners have different intentions. These residents did not sign up to live next to a hotel, a frat house or a house of ill repute.
Airbnb renters can do what they wish in the home they are renting. They can invite friends over, throw parties and create a disturbance to those living nearby. It creates a situation for neighbors who thought they were living in a residential area — not to mention, a potentially unsafe situation and a legal and law enforcement conundrum.
Hoteliers and landlords abide by specific sets of laws. When a hotelier rents out a room for a specified amount of time, both parties agree on the nightly cost. Should the guest decide to not leave the hotel, the hoteliers can either extend their stay at a similar rate, or increase the nightly rate to encourage the individual to check out.
When a landlord rents out a property, they have an eviction process to remove unwanted tenants. But should an Airbnb guest decide to stay past their “reservation” time, how does a homeowner remove an individual who was an invited guest? Simply Google “Airbnb horror stories.”
Another issue with Airbnb is the unfair advantage in the market. Our hotels and motels are required to follow strict standards,which include health department checks, fire suppression systems, limited risk insurance, and business registration. Additionally, hotels and motels must also collect state sales and local taxes. Homeowners using Airbnb are able to bypass all of this.
In addition to not collecting state and local taxes, those who profit from Airbnb are potentially still claiming a homestead exemption. This affects our communities. Receiving homestead exemptions on these properties is theft from cities and neighbors.
Today’s technology has created a “wild west” for homeowners. Regulations and guidelines need to be established and followed to ensure the safety of our residents and visitors, as well as a level playing field for all businesses involved.
Speros Batistatos is president and CEO of the South Shore Convention and Visitors Authority. The opinions are the writer's.
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