Illegal short-term rentals are a little like palmetto bugs — turn on the light and they go scurrying out of sight. Let me explain.
Last month, just after Christmas, I had lunch with Taylor Gates, the 27-year-old chief executive and sometimes concierge of Stay Duvet, a little company that in three years has grown into the biggest local player in short-term rentals. The noodles were good at Xiao Bao Biscuit, and Gates couldn’t have been chattier.
Housed in the incubator for start-up businesses the city founded near the corner of East Bay and Calhoun, Stay Duvet is part of a fast-rising class of companies you might call The Other Airbnbs — niche players that are quickly expanding the urban home-sharing market.
At the time of our lunch, Stay Duvet’s handsome website (www.stayduvet.com) had more than 70 Charleston listings, most given pretentious names that have about as much to do with Charleston as Boston baked beans. There was “The Sinatra,” “The Casa Blanca,” and “The Fenway. “ The photographs were inviting and careful not to disclose the locations of the homes.
The majority of the properties, Gates told me, are in the Cannonborough-Elliotborough neighborhood, the city’s only district where short-term rentals are allowed, provided they are zoned for commercial use.
But what about “The Lotus,” a three-unit building on the East Side that goes for $200 to $450 a night, I asked? And reality TV star Shep Rose’s “Southern Charm” ($350 a night) on the upper East Side, “The Boutique Bungalow,” near Hampton Park at $300 and “The Storymaker” in West Ashley at $400? And on and on.
Aren’t those illegal? “I guess they would be. Maybe,” Gates told me, suddenly not so chatty. “It depends on how you justify it.”
Today, all those properties have disappeared from Stay Duvet’s website, which is down to 32 Charleston listings. Call it the power of the press. But make no mistake: A $12 lunch is no regulatory substitute for real rules that can be enforced, something Charleston desperately needs. The evidence? Many of those same properties remain on Airbnb, hosted by “Taylor,” “Francis” and Stay Duvet.
While Airbnb (estimated value: $31 billion) likes to market itself as a way for Ma and Pa to pay college bills, professional operators are increasingly the reality of the industry. Don’t kid yourself: Nobody wants to stay in your guest room; the real money is renting full houses and snazzy apartments like Stay Duvet and other companies offer coast to coast and in every big city in between.
Looking for a short-term rental downtown? Cali wants to help.
“Luxurious and stunning downtown Charleston 2 bedroom with all the amenities (gym, pool, hot tub + much more) and walking distance to King Street!” shouts her Airbnb ad. “Located at Elan Midtown which is one of a kind and only NEW construction apartments in the historic downtown Charleston SC neighborhood!”
The price: $125 a night.
And if it’s not available, Cali has three more for you — all in the Elan.
Cali can do more than find you a weekend apartment in Charleston. She‘s got you a beautiful three-bedroom loft in Washington ($151 a night), a “fab” two-bed in Dallas ($75) and a three-bedroom place in San Diego ($146). In all, Cali has 84 listings on Airbnb around the country. She has 2,142 reviews and counting.
The Elan, a 200-unit luxury high-rise on Meeting Street, opened in 2013. The city allowed giant Charleston-based developer Greystar to build bigger and denser in exchange for including 30 workforce housing rates offering reduced rents.
But the city didn’t realize it would turn into another mini-hotel.
Cali isn’t alone at the Elan. In July, Airdna, a consulting and analytics firm that tracks Airbnb rentals, estimated another Elan “super host” would gross $134,000 in a year, making it the city’s most profitable two-bedroom Airbnb rental.
“Over the past two years, our residential apartment building has been essentially turned into an illegal hotel, and these short-term rentals have caused major havoc for our once tight-knit community,” one Elan resident wrote me in a cry for help.
“Some of the problems we have encountered are loud partying at all hours of the night, theft, illegal parking, urination in the stairwells by drunk Airbnb guests,” she said. “Our neighbors have been replaced by a never-ending group of tourists, and the problem is getting worse.”
In a brief telephone interview, Aman Makkar, a 35-year-old St. Louis Cardinals fan who lives in Los Angeles, said he and his partners hold the Elan leases. He said Greystar, the building manager, is aware of his business as are the property managers in all the 17 markets where he operates through Revestment, his short-term rental company. He didn’t respond to additional emailed questions.
Greystar, which manages but no longer owns the Elan, said it wasn’t aware of the short-term rentals, which are prohibited. “In the past, management has discovered residents involved in home-sharing rentals, and appropriate action was taken to make the resident cease the activity or face eviction,” it said in a statement. “Now that we are aware of this situation, we are in the process of taking similar steps in the current circumstance.”
In a city where 135,000 residents coexist with 6 million tourists, the rise of short-term rentals has the potential to price out locals and change the culture of our neighborhoods — replacing our friends next door with anonymous weekend guests. Left unchecked, the powerful economics of the Airbnb Effect could destroy whatever the floods do not.
That is why the city’s effort to rewrite the short term-rental rules is critical. The Planning Commission and the City Council would be wise not to water down the recommendations the Short-Term Rental Task Force spent a year developing. The mayor and the city’s planning department support the task force proposals.
One key provision, particularly for the peninsula, is prohibiting short-term rentals of entire houses unless the owner is on the premises. Instead, the Planning Commission is considering allowing residents to rent their primary home for up to 72 days a year, setting up the kind of enforcement nightmare that has led to the current plague of Airbnb rentals.
You can bet the short-term rental industry is watching. Behind small operators like Stay Duvet and Revestment are larger alternative Airbnb providers like Stay Alfred (already in Savannah), Sonder, Pillow and Onefinestay.
We’re America’s favorite tourist city. Imagine the possibilities.
Steve Bailey writes regularly for the Commentary page. He can be reached at email@example.com.