A Crackdown On Illegal Hotels – Unfair Competition For Hoteliers

Each year, right around November, you will see the beginning of the annual migration season to South Florida. Canadian snow birds and residents of New York get in their cars or board planes to head south and avoid the cold winter months. Many of them rent condos or homes for a few months instead of staying at a hotel. The homeowner makes some money and the traveler gets a nice place to stay for the winter.

Renting out your residence

Hotel owners may lose some business, but it is perfectly legal and well within the rights of an individual in America to rent or lease property that he or she owns. People rent vacation homes by the shore or up in the mountains all of the time. You can rent a spare room in your home to a college student during the school year. You can even have several different tenants in your duplex over a six month period.

You can’t turn your residence into a hotel

What you can not do is turn your home or apartment into a hotel. Building and zoning laws in almost every community in the United States prohibit such activity. In New York City, a law was passed in 2011 that made it illegal for a New York resident to rent out his or her home for less than 29 days. The law was originally intended to prevent investors from buying up apartment units and private residences and converting them into what was essentially a hotel room that could be rented out hundreds of times in a year.

Disturbing the neighbors

If you have ever lived in an apartment building and had a neighbor who liked to blast his stereo at all hours of the day, you know how disturbing that can be. Imagine having different people occupying the apartment next door every week. While some short-term occupants might be quiet and respectful of the residents of the building, others can be noisy, have parties and make a mess in the building. Even worse, when strangers move in and out all of the time, the transient nature can lead to serious safety concerns.

Airbnb brings the issue front and center

Back in August of 2008, a group of three young men created an online company that made it easy for people who wanted to rent out their residences to find travelers who wanted a unique and affordable place to stay. Airbnb was born to help facilitate the connection between owner and renter. Today, the San Francisco based community marketplace allows people to list, find and book accommodations in more than 33,000 cities and 192 countries. People can connect to each other online or through their mobile phone.

According to the company’s website, Airbnb has booked over 10 million nights, has over 300,000 worldwide listings and more than 600 million social connections. While the service is free to users, the company makes money by charging the property owner three percent of the rental charge once the customer submits his credit card and pays for their stay.

Arrangements are made directly between the two parties and ABB* does not require property owners to meet the health and safety concerns that is part of the standard operating procedures of all legitimate hotels. An owner, using ABB* may actually be in violation of numerous local zoning laws and could face civil penalties if the authorities are made aware of such illegal rentals.

As more and more complaints about these private arrangements are coming into public view, cities are taking steps to close down, or at least restrict the way ABB* is doing business. A New York City apartment owner, who recently used the ABB* rental service to rent his apartment, was fined $2,400 for violating the city’s illegal hotel law. In Quebec, Canada, the city is focusing on shutting down ABB* and has launched investigations into the affairs of 2,000 home owners who have rented their properties out without having the proper permits.
ABB* = Airbnb

Hotels can not afford to ignore the unfair competition

Even though the threat posed to large hotel brands and smaller boutique properties may be minimal today, allowing such rentals to continue without complying with the same safety and health requirements of properly licensed lodging facilities, could become much more damaging in the future. Just like a restaurant owner would not want a food truck parking across the street and stealing away business, a hotel owner has the same concerns.

Running a legitimate hotel means that the owners must adhere to all of the public safety and health laws. There must be proper fire exits and each floor must have emergency lighting. Wiring, plumbing and other systems must be inspected periodically. Air conditioning units must be maintained and food and beverage service must meet all health codes. Guest rooms must be properly cleaned and sanitized each and every time one guest checks-out and another guest checks-in.

All of these things cost money and must be incorporated into the rates that hotels charge. In a private residential rental, there are no regular inspections to make sure a room is up to standard. Real hotels can not charge the low rates that individuals can charge and still stay in business.

Individual freedoms and hotel rights

While there may be millions of people around the world who are willing to take a chance by renting a room from a private owner without any guarantees or insurance of the condition or safety of the accommodations, that does not mean that property owners have the right to turn their residences into hotels. For the good of the community as a whole, local governments have zoning laws and rules that restrict the use of private residences for transient stays. You have a right to rent your property, but it must be in compliance with the law.

Generally speaking, if you rent your property to a single tenant for at least 30 days, you will not be considered to be operating like a hotel. Individual freedoms are the foundation of America, but they should not intrude on the rights of others. Health and safety in the hotel industry is a publicly desirable policy. While a man’s home may be considered his castle, he can not rent it out indiscriminately as long as he is living under the laws of the United States.