Short-term rentals, Airbnb driving up long-term rental prices

Short-term rentals, Airbnb driving up long-term rental prices

Senior staff reporter

Wednesday, January 29, 2020

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REALTORS are worried that the rapid increase in short-term rentals and the growing number of Airbnb accommodations are driving up the cost of long-term rentals in the housing market, and wants the Government to implement policies to regulate the industry.

Head of the Realtors Association of Jamaica (RAJ) Andrew James says the organisation has asked for a meeting with the Government to discuss the growing concern.

Speaking at this week's Jamaica Observer Monday Exchange, the RAJ president said the association will this week be following up on efforts to meet with the policymakers.

“We have asked the Government, on more than one occasion, for us to have a sit-down regarding short-term rentals, and we are waiting to have that discussion with them, that would include regulation, and so on,” he said.

He said RAJ has already pointed out to the authorities that there are not enough apartments for young professionals, as most individuals who invest in real estate are going the route of short-term rentals.

First vice-president of the association, Donovan Reid, was candid about the issue: “I'm of the view that the short-term rental segment is driving up rental prices for locals. I believe that there should be some regulation, otherwise, who want to get rental properties will not be able to afford it”.

Notwithstanding, James said it is evident that short-term rentals will be a long-term fixture of the market.

“Short-term rentals are here to stay,” he remarked, noting that a Canadian study found that short-term rentals in Jamaica generated US$139 million in 2019, putting the island in sixth place in the region, in revenue from this segment of the real estate market.

According to the study, Dominica earned US$219.6 million, while Saint Barthélemy earned US$203 million, Puerto Rico US$187 million, Barbados US$160.5 million, and The Bahamas US$145.2 million.

Cuba is leading the charge with 31,200 active listings, followed by Dominican Republic with 21,000 active listings, Puerto Rio with 11,600, and Guadeloupe with 11,100.

Meanwhile, chief executive officer of the Real Estate Board and the Commission of Strata Corporations, Sandra Watson-Garrick explained that the corporation has been hearing complaints from residents of properties that are being used for short-term rentals.

“Persons complain about security, the fact that they don't know their neighbours, there is noise, there is smoking of marijuana, loud music — those are some of the common issues. Also, some persons think it's unfair that they are paying the same maintenance as someone who uses their property for short-term rental because of the wear and tear on the common amenities,” she said.

The CEO said some individuals have been able to resolve these issues using the dispute resolution process, but in instances where agreement cannot be reached, the commission issues an order or conducts a hearing. She said there are two such ongoing hearings.

At its first annual general meeting in Kingston last October, the Jamaica Home Sharing Association (JHSA) said there had been an increase in registered Airbnb hosts from 3,100 to almost 4,000 in the past year.

The JHSA has been working with the Government to help enhance the tourism sector, but the industry players are concerned about talks of taxation.

Tourism Minister Edmund Bartlett has dismissed reports that the Government intends to impose a tax on Airbnb hosts, stating: “Nothing could be further from the truth, as we have had no such discussion.”

He said what has been discussed is an administrative charge being levied on Airbnb, which he said will in no way affect what is being paid over by Airbnb to property owners.

Airbnb is a virtual marketplace and home-stay network, which allows individuals to list or rent short-term stays in residential properties. Airbnb then collects service fees from hosts and guests.

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