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My no vote is mostly related to not helping the government do their job and a healthy degree of skepticism about how they do their job. There are people who equate “legal” with being “right.” I’m not one of those people. However, it would irritate the snot out of me if I were operating legally and my competitors who were not were able to undercut my price and get more business.
Every year at tax time I read DogVacay host’s posts about how they don’t pay taxes on their income. “My CPA says it’s a hobby” or “Paypal doesn’t report any amount under $20,000” why should you?" It infuriates me but I don’t report them.
I have safety concerns. I have a few buildings being rented out on AirBNB like a boarding house. We have some very strict rules around here about how many people may occupy a building, with more restrictions if they aren’t all related. I am worried that in case of a fire, there is no way these folks will get out and the firefighters won’t know that there are 13 people in a three bedroom and stop looking when they got to a count of 7 or 8. These are 100 year old wood buildings where you can reach out a window and borrow sugar from your neighbor. When one goes, usually we loose between 3-10 buildings.
I haven’t reported them to the government. I have reported them to AirBNB, who does not seem to care. The publicity of a headline in the Boston Globe "Illegal AirBNB Boarding House Lost to Fire: 2 dead, 10 Hospitalized would not be good for AirBNB. And, it would be horrible for guests.
Since we are considering buying an apartment, today we went to the municipality to inform about the exact regulations. We want to permanently live in the apartment ourselves, and rent out the remaining rooms (1 to 4).
It would be quite an investment and I would want to do everything by the rules to have legal certainty. To not loose money because all of a sudden we are not allowed to host anymore. I don’t have problems with: paying taxes, respecting employees, matching the Hilton in quality and safety. So no problem at all one would think.
Today we learned that the, very touristy, district we are living in does not allow any short term hospitality service in an apartment. Even if it’s your property and all the neighbors agree. They only allow B&B’s with max. 5 rooms in one-family homes. We live in a district with a building code that on average allows between 7 and 19 floors, and prices of houses and land reflect this. So if we want to buy a property where we can legally BnB we would have to invest a small extra of $US 300.000,00 to $US 500.000,00. And in that case it will probably become more of a small hotel than a BnB.
Now the small detail is the following: Since this district is mainly apartments, probably about 97% of the current BnB’s (> 1000 units?) are located inside an apartment and therefor in breach of the law.
And this got me thinking… Suppose we are able to buy a small house or a small lot that most of the investors deem worthless. We would have to invest extra, but we could work legally. What we wouldn’t be able to do, is maintain the ridiculous low prices of illegal competitors. In that case what would I do? Since I am totally in doubt I wanted to know the opinions on this forum .
(BTW: Yes, we ourselves are breaching the law at the moment. I am aware of this, you don’t have to call me out on it. This is our BnB trial period that required little investment and was just to see if we like it. The moment someone reports us, we can shut down within half an hour.)
No, I don’t think I would report them. The chances are that they’d soon be caught out anyway. Also, if they are not abiding by the rules, it’s possible that they don’t have insurance and don’t give the guests the best experience. They’ll soon fade away.
Someone not paying their personal income tax wouldn’t even bother me. I guess I would be pissed about the not collecting hotel tax because my rates would always be 15% higher than the competition when guests compare listings. Yep, I know a handful of people who are like some of the hosts you refer to on dogvacay.
Well, if they aren’t paying income tax on their work, they can also charge less and still make more. Self-employment income, social security and medicare taxes [both employer and employee] is equal to about $33.00/$100.
Can’t follow the logic there… that assumes that they don’t undercut you since their profit is a higher percentage, unless of course, you aren’t declaring the income either. Then it is a wash.
@GutHend Well … you’ve just admitted you’re trialling Airbnb and that you know you’re not in compliance. Perhaps your competition are taking Airbnb out for a spin too …
Seriously though how do you know your fellow hosts aren’t doing the same thing you are … namely testing the water.
Airbnb is still a relatively new phenomenon and most governments are playing catch up. meanwhile hosts want to try the pie.
Even with the new information my vote is still “no.” I could give several reasons but I don’t think they would apply to you. You asked what we would do. I think what you should have asked is what we thought you should do. I don’t have an opinion on what you should do.
I just asked the question because I thought that it was an interesting question to bring to this forum . Then people were getting confused and I felt it would be better to give the situation here as a clear example.
As for our specific situation… I think the regulation is quite off or not up to date, but it is what it is. And for the moment being, every legal hostel in town, has a tool to quickly wipe out a large percentage of the “new” competition.
I am not saying I would immediately do this… I was imagining the actual situation and contemplating what would be the way to go in case of severe frustrations caused by the matter.
I think a better business strategy for you is to make this huge investment and concentrate on making it a success for what it is, not for what your competition isn’t (if you see what I mean). As others have said, these illegitimate listings will soon disappear and your new place will become known for being a top class accommodation. I can see it’s frustrating but I find its always better to burn as few bridges as possible. You can keep your local government on side by doing things the way they want you to, but don’t become an unpaid worker/snitch for them. I don’t think there will be any real benefit to you in the long run
I see what you mean. However I am still doubtful if I can agree yes or no.
No problem whatsoever for the moment. And as said before, unless someone (private person or company) reports, the municipality will not act on anything.
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. Then people were getting confused and I felt it would be better to give the situation here as a clear example.