Thursday, May 30, 2019

This Airbnb Killer Could be Bad News for the Bay Area

Airbnb has forever changed the landscape of tourism and short-term rentals. While there is no denying their success, the company's impact on communities has been frequently criticized. A new competitor could change the way Airbnb does business in the San Francisco area, but Cal Bay Property Management's Scott Safadi cautions anyone celebrating the new company's arrival in our part of the world.

WhyHotel is a Washington, D.C.-based startup that connects with luxury apartment tower developers to develop pop-up hotels in empty units. Since it can take developers several years to fill up vacant units, many are eager to take advantage of the new service. Offering maid services and 24-hour front desk support, these new pop-up hotels look and feel like any other. The only difference? They won't typically remain open after 24 months.

While the idea is innovative, WhyHotel could have an Airbnb effect on the greater Bay Area. Short-term rentals hurt lower and middle-class families searching for affordable housing. While the use of empty luxury apartment units as hotel rooms may not immediately impact individuals searching for affordable housing, it has the potential to drive up tourism costs. The trickle-down impact of the service could be significant.

No matter how you feel about short-term rentals, there's no denying their influence on housing markets. Investing in a multi-family property is typically a better use of your money and has a better impact on your community. While you may not necessarily have empty luxury apartment units to rent out, it's worth considering how WhyHotel could impact your property and the housing market at large.

- Scott Safadi, Cal Bay Property Management


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