Monday, March 16, 2015

Meet LA's Most Prolific Airbnb Host, With 78 Units For Rent 


interesting... sharing economy was supposed to give power to individuals, shifting the balance of power away from corporations.

But corporations can strike back and take advantage of sites like Airbnb.



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Short-term rental listing website Airbnb promotes itself as a simple way to rent out a spare bedroom for some extra cash, and since short-term rentals are illegal in most parts of most big cities, it bases its extensive lobbying and marketing efforts on this notion, claiming its "hosts" are just trying to scrape together a little extra cash to pay the rent, so why don't you cut them a break? But Airbnb has never actually revealed data to back this claim up, so the Los Angeles Alliance for a New Economy did it for them, putting out a thorough report yesterday on the company's massive impact on the LA housing market.
Just a handful of hot neighborhoods produce most of the Airbnb revenue in LA and rents are rising faster than average in those neighborhoods; the most significant problem is that landlords are taking whole units (sometimes rent stabilized ones) off the rental market in order to turn them into ersatz hotel rooms. And LAANE's report also found that most people profiting off of Airbnb are not regular folks making a little extra cash—they're pros, with multiple units permanently up for rent.
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LAANE found 8,400 Airbnb hosts in LA with 11,401 listings; nearly two-thirds of those (64 percent) are full units, suggesting that most people using Airbnb are basically just landlords choosing to illegally rent out their spaces as short-term units instead of as regular apartments (there are probably also some people who just travel a lot).
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Most of those landlords (42 percent) are only renting out one place on Airbnb, but six percent are considered "leasing companies," renting two or more places. But here's the thing: Those six percent are making 35 percent of the Airbnb revenue in LA. The 42 percent of people renting a single unit are making 54 percent of the revenue. And the 52 percent who are non-pros renting out an extra room make just 11 percent of all the Airbnb revenue in Los Angeles.
More than a third of hosts (38 percent) with only one listing (of any kind) make no money at all. Hosts with lots of listings pretty much always make money—only two percent of hosts with five or more listings made nothing. As the LAANE report summarizes, "Rather than disrupting the existing economic order, AirBnB seems to have simply reinforced that hierarchy."
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LAANE also tracked down what it says is the most prolific host in Los Angeles—someone named Ghc, renting out 78 full units (when we searched just now, we found 88). Something, actually: it's a company called Global Homes and Condos, which calls itself a "full service vacation rental management company." Its owner, Sebastian de Kleer, is also the cofounder (with another professional landlord) of the Los Angeles Short Term Rental Alliance, which advocates for the rights of "professionals in the short term vacation rental industry."
But de Kleer is not the face of Ghc. Today it's represented on its Airbnb profile with a group photo, but not so long ago its public faces were "Danielle and Lexi," who, judging by their photo, were a couple of young, white gals. Airbnb confirmed this with a"verified ID" badge on their profile page. It's unclear what connection Danielle and Lexi have to Ghc, but either way the company switched to its Airbnb profile to its real identity recently.
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Regardless, neither Danielle, Lexi, or Ghc is really responsible for making sure their Airbnbs are legal, or in the case something goes wrong. The owner is someone else altogether. Airbnb offers up to $1 million in "covered losses" to its hosts, but that only applies to property damage (and LAANE details one horror story where it didn't even cover that). Besides paying taxes, hotels are required to have significant insurance to cover the property and their guests; they're also required to comply with the Americans with Disabilities Act. Apartment landlords, particularly for rent stabilized units, have to follow laws governing discrimination, evictions, rent increases, and other tenant protections.
But Airbnbs aren't legal, the city can't handle enforcement on thousands of units, and so the whole scene is pretty much lawless. And that works for landlords, works for management companies, and seems to work for Airbnb, which takes a three percent commission from every host and up to 12 percent from every guest.
· AIRBNB, RISING RENT, AND THE HOUSING CRISIS IN LOS ANGELES [LAANE]
· The Nine Neighborhoods That Make All the Airbnb Money in LA [Curbed LA]
COMMENTS (43 EXTANT)

THIS is exactly what's wrong with Airbnb. Unchecked and unregulated shenanigans.
Airbnb needs to be put down and companies like Ghc needs to be held accountable for their illegal and unethical ways.
With any new change, there is a land rush spearheaded by the unscrupulous. Bring out the guillotine.
Easy fix - make it owner occupied units only. No need to punish the little guy for the actions of the behemoths.
Another sad symptom of our society breaking down. Landlords don't want to worry with actual tenants anymore. Companies don't want to deal with actual full-time employees anymore. And on and on it goes.
I love how this article - just like the "report" it references - lacks facts. How did LAANE get all this data on Airbnb when Airbnb hasn't even released this information?
It was a biassed report with an agenda solely to bash Airbnb. The fact that this author and Curbed can reference it extensively shows the lack of character they have for journalism.
This article is pretty malicious and doesn't really look at facts. Sebastian is a good guy, who cares about his community and worked hard for the last 8 years to build an honest business that employs people and helps bring much needed dollars into the local economy. He pays his hotel tax to the city of LA and always strives to do well by others. Curbed too often paints exaggerated narratives that present honest, hard working enterprising individuals as evil, conniving robber barons. Shame on you curbed...
These negative posts just like the article seem like the writers are not aware of the facts. This is not a new industry, the home rental industry has been around for decades in Los Angeles (all the sudden its all everyone can talk about, come on). The city was built as a tourist attraction. This is a vacation destination and thus people are going to visit. If there were enough hotels for the demand this industry wouldn't exist.
I think trying to take out small business is the wrong approach to this. Why not adapt policies like Orlando, or more closely Palm Springs who generate millions per city in taxes on short term rentals and are able to keep control and maintain without major issues. This creates american jobs people!!
I personally love renting homes all over the country and don't understand what everyone's worried about. Do you think if Airbnb goes out of business the rent will drop in LA, nope. The existence of Airbnb does nothing to add to the attractiveness of living in Americas best climate. If you don't like paying high rent don't live in LA. San Fran recently ban non owner occupied rentals and guess what its still the most expensive place to live in the country same thing happened with NYC and guess what rents didn't drop. We are doing the economy and unemployment rate a disservice by trying to shut something down because its new or we don't understand. Is regulation needed, yes, is a ban needed, no way, and anyone that feels that way on your next vacation rent a house and then see how you feel about this issue.
Using technology to make money from a fixed asset is not a crime.
All we need is a law that demands full transparency - like listing the address of the property.
I think this is a hatchet job against a small business that pays its taxes and employs many people. If you want to debate Air BNB that is fine, but to slander this one company seems to be malicious. There are many short term rental companies that advertise on air BNB.
Please read the report before you sound off. There are detailed explanations of how revenue, occupancy rates, etc. were calculated.
38% of hosts make no money - where did you come up with that! Why would they do it if they didn't make money. There are a lot of holes in your argument about AirBnB being a bad entity. For example, I know three people who when they rent their residence on AirBnB, go live with their girlfriend and/or parents temporarily. I'm sure there are many more of those.
...and 78 units being rented out with AirBnB is something to cry over?
The LAANE report says: Renting out whole units exacerbates Los Angeles’ existing shortfall of rental options while also creating safety hazards and quality of life concerns for Los Angeles neighborhoods.
Where is the connection? How is this driving up prices? How is this causing a housing crisis? What a bunch of hot air.
On my last vacation, I rented a fully furnished condo in Puerto Rico for a week. It was great!
Wow, three users registered just so that they could make their first comments in response to this article, and all three angrily decry the original post (and the report it references) and defend the "home rental industry." I'm sure that's just a coincidence.
What concerns me is that I could have an endless stream of irresponsible or indifferent short-term neighbors who make noise and cause other problems that an HOA would under current CA law have a very difficult job handling. Perhaps Sebastian is indeed a nice caring guy but I guarantee he will not be as annoyed by unruly visitors as someone who is forced to share a wall and deal with them. In addition, presumably he is handing keys to security gates to these "guests" and these keys can be copied easily. This business should be shut down and so should AirBnB
I'm a renter and not a fan of what Airbnb does to the traditional rental market, and to the local community fabric, but Curbed is picking on the wrong culprit by lashing out at Globe Homes and Condos. They're a small, community-oriented company --not an remote online platform-- and they at least pay the city taxes -- something most private owners posting on Airbnb don't, and something Airbnb doesn't care about. And as a management company, they monitor the properties and enforce strict rules and local ordinances -- again, something most private owners don't.
The real problem is Airbnb, who militantly refuse to play by the rules and enforce local taxes and regulations, and don't care about the incidence of their businesses on local communities. They're the locusts -- not so much the local operators.
Someone was just telling me today that you have to make $90,000 a year to be able pay the Affordable housing rate in Downtown LA and I think it was something like $120,000 per year in Venice Beach. I'm sure many of the lawyers and corporate types make that kind of money, but how many of the workers at LA Live do? On the Boardwalk in Venice? It sounds like the prime location housing just isn't affordable. I can't believe the likes of this Sebastian fellow or Airbnb are causing it. There have to be millions of residences in Los Angeles. These are drops in the buckets, even in these select areas.
Isn't it Un-American to suggest we just shut businesses down rather than figure out how to make them best work in our society? We aren't talking something that is truly harming anyone. My neighbors have Airbnb guests. Don't see most of them. Had a glass of wine with one a while back. The economy is perhaps getting better, but innovation is always what makes America strong. Isn't that one of those great things we pride ourselves on in California? Airbnb is way to big to go away, let alone all those others. How do we learn to make them our new neighbors? This Sebastian guy has built a business around it and sounds like he has played by the rules and then some. It's only La.curbed, after a quote in the LA Times, that seems to want to exploit him.
Airbnb has changed. A few years ago when I looked at Airbnb listings, they were overwhelmingly people renting out a single room or unit. It really was their primary place of residence. But now companies with multiple rentals dominate. It's not just a support to people's income any more, it's a business.
So Airbnb is flying under false pretenses. It's creating little hotels, often with multiple units in the same buildings. If the Airbnb "hosts" can get permits to convert apartments or houses into hotels, fine. If a housing starved city wants to look the other way while it loses all these units, that's a policy choice. It's a bad one in my opinion, but at least if there were a real discussion and process there could be a choice.
The other way is to make sure that the units are only people's principal residences, and enforce the hell out of everything else.
Airbnd is GREED personified. It is a leech on the community and cities have a right to drive these vultures out of tow.
But if you can't make $90,000 a year otherwise to pay the rent to live here otherwise but can by this business model, is that wrong if you have permission, are paying your taxes and doing everything else that you can (I am not sure what all that is to include)?
Well everyone is missing the obvious solution. Combine big Airbnb landlors with maternity tourists and presto! We could then either taax them like regular businesses or perhaps keep just the first born.
Landlords would be happy to worry with actual tenants, but LA City rent control prevents that.
The fact is that there is an enormous demand for the so called 'illegal' short term rentals. If not, the airbnb's wouldn't boom like crazy. So what about those thousand's of short term rental users ? They want it, they get it and they won't go away either.
Can the next exposé be on how efficiently the silicon valley startups astroturf any and all online criticism of their companies? Seems pretty easy to accomplish using Amazon's Mechanical Turk, or lowly interns.
1. Compile a matrix of generic talking points, false identities, and positive examples.
2. Set up Google Alerts for mentions of your company.
3. Hire people to post (1) onto (2) for pennies.
Viola. The perception of public support. Now if y'all will excuse me, I have an Uber waiting outside. What a convenient way to get around! And they don't hire rapists, unlike some companies! And I love knowing that my support of Uber is helping people make ends meet! Did I mention your first Uber ride is free if you use my code? WE84ARE62FU91CK04ED
@ChicNomads: Make it four brand new posters, all of whom are desperate to defend airbnb. Pretty fishy.
There are no legal routes to converting rent controlled apts to an AirB&B short term rental. Only an apt bldg built after 1978, would be exempt from Rent Stabilization laws.

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