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Philadelphia Residents and Developers Start Experimenting With Airbnb

Jan 11, 2014 8:00 am

Skift Take

This is Airbnb in a nutshell: tenants making ends meet, illegal sublets, wily developers, mad people who won’t share their names because they know they’re doing something wrong.

— Jason Clampet

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On Amber Street in East Kensington, developers PostGreen and Equinox Management & Construction are preparing to break ground on a new apartment building with a very unusual feature: a unit reserved for short-term rental via Airbnb.com, the largely unregulated online marketplace that helps people turn their homes into hotels.

Even more unusual: The developers declared that intention when they applied for the building permit, making theirs perhaps the first strictly by-the-book Airbnb unit in Philadelphia.

Until now, most people renting accommodations on the site have likely been doing so illegally, said Martin Gregorski, a zoning expert with the City Planning Commission who had not heard of Airbnb.

“It’s something that probably our code hasn’t caught up with,” he said.

But outside City Hall, word is traveling fast.

Nearly 900 accommodations in the Philadelphia area are now listed on the website of the five-year-old San Francisco-based start-up, priced from $25 a night for a futon on the floor in West Philadelphia to $1,000 for the run of a Chestnut Hill mansion. Motivated by the chance to make extra cash, meet world travelers, and participate in the fast-growing sharing economy, more local residents are opening their homes and giving total strangers the keys.

Some, like South Philadelphia resident Carlene Majorino, 25, look at it as a safer and more profitable alternative to Couchsurfing, a website where people offer free lodging. In addition to allowing guests and hosts to review one another, Airbnb also extends hosts protection in case of property damage, and verification of guests’ identities.

In 2012, Majorino and her partner rented a place with a spare room. Now, they have guests four or five nights a week, and charge $59 per night — adding up to more than $13,000 a year.

“We thought this was a good opportunity to meet other travelers and make connections around the world,” said Majorino, an English tutor and nanny. Her motivations have evolved, though. “We still like it, but we’ve become a little bit jaded. It’s been so redundant.” Now, she said, she’s driven mostly by the financial benefit; Airbnb income covers their rent most months.

In return for providing the infrastructure, Airbnb takes 3 percent of the listing price, plus a service fee. (The company actually called Majorino, she said, urging her to raise her price to $80 or more.)

The city does not get a cut.

While cities including New York and San Francisco are working with Airbnb to collect occupancy taxes — and New York’s attorney general subpoenaed Airbnb’s records to crack down on tax dodgers — Philly’s Revenue Department is apparently not looking to collect the 8.5 percent hotel tax or the 6.45 percent business income and receipts tax on Airbnb units. “We’re not collecting taxes, and we’re not contemplating collecting them,” said administration spokesman Mark McDonald, referencing the city’s failed attempt to recoup unpaid hotel taxes from Expedia between 2001 and 2005.

That’s fine by hosts like recent Temple grad Scott Pawlowski, 23, of Northern Liberties. For $30 a night, he rents out the foldout couch in his living room, beneath a tapestry depicting Bob Marley.

“We haven’t had an empty couch since September,” said Pawlowski, who has been paying most of his own rent and his roommate’s with the income. “It’s a way of life now.”

He has hosted guests of all ages and nationalities. “It’s pretty empowering. We have a map of the world, and every time we have somebody come, they put a star where they’re from,” he said. “The board has filled up.”

There are more stylish options on the site. Among them is Aliza and Kevin Schlabach’s home in Phoenixville, a midcentury modern retreat on the edge of Valley Forge National Historical Park. Visitors can choose to sublet a single bedroom (housemates include their 4-year-old daughter and 7-year-old son) for $62, or the master suite for $189. Or, for $280 a night, they can rent the whole house while the Schlabachs are away — or feel it’s worth their while to vacate for the weekend.

Aliza, 36, said she was intrigued after friends told her Airbnb was paying their mortgage. Plus, she’d always dreamed of running a bed-and-breakfast. “This is a way for us to dabble in it.”

With kids, there are worries about letting strangers into her home, so she’s cautious: She accepts only Airbnb-verified visitors whose profiles don’t raise any red flags. And, when guests stay, she uses a monitor that alerts her if the door to her kids’ rooms opens at night.

But, she said, “I want them to understand that there are a lot of different kinds of people out there that come from all over the place and hear different types of stories. I want to live more in a sharing economy and a welcoming worldview, rather than in a fear-based world.”

Elsewhere, that idealistic outlook sometimes runs up against the fine print of lease agreements.

Andrea, 33, runs five Airbnb units in the city. She asked that her last name not be used because she doesn’t have permission to sublet two of them.

She started renting out her apartment four years ago, after being laid off from a job in pharmaceutical sales. Her landlord caught on — but, rather than evict her, he asked her to manage two additional apartments.

These days, she earns more than in her previous career but works only a few hours a day, managing her listings, doing laundry, and cleaning the apartments — she said her reviews suffered when she tried to outsource that.

A handful of other professional Airbnb hosts also have popped up in Philly. But will more developers join them?

PostGreen’s Chad Ludeman said he doesn’t know yet if it’s a smart investment. The only reason he decided to experiment with Airbnb was to address the commercial-zoning requirement of the lot. It has the potential to be more profitable than a typical rental, he said. But, he added, “I definitely don’t think this is going to be some slam-dunk business model that a lot of people will copy.”

After all, hosting or traveling via Airbnb is by nature full of surprises.

Take Jeff Williams of Brooklyn, who booked a guest room in the Art Museum area. He arrived to find a strong feline stench and patches of dried cat vomit. “On the Airbnb website, there were thirty-something positive comments,” he said. But when he caught the host spritzing the sheets with Febreze (presumably in lieu of laundering them), he knew he was in for an uncomfortable night.

Nearly every review on one 4-star-rated property in the Mantua neighborhood mentioned a number of notes around the house. One finally explained: There were “instructions written in black Sharpie all over the apt (on the walls, the fans, the toilet seat, the shower walls), which is a little off-putting,” but probably necessary since the “apartment is literally starting to decompose.”

Hosts also report odd encounters. Pawlowski had a guest check in at midnight and leave abruptly at 3 a.m. Another guest went out drinking. “I found him passed out in our kitchen, almost naked.”

Other guests just feel entitled, Majorino said, mentioning a man who produced a blender from his suitcase and demanded an array of five fruits to make a smoothie.

Andrea, the Airbnb pro, said the service isn’t for everyone — including her.

“I have stayed in Airbnb twice, and it’s not for me,” she said. “I like staying in a hotel. A hotel with no room service is camping to me.”

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