In fact, a number of home sharing companies have picked Miami-Dade as their headquarters or have a strong presence locally, each carving out its own niche as controversy swirls around the industry. Some cater to local renters, others offer an experience similar to hotels, and still others work only in the shrinking space of legal short-term renting.
Diversification in home sharing is a sure sign of the industry’s explosive growth, said Douglas Quinby, senior vice president of research at Phocuswright, a travel industry research firm. In 2010, fewer than one in 10 Americans had stayed at a private accommodation. By 2015, that number had increased to nearly one in three, according to Phocuswright.
Last year, home sharing was a $32 billion industry.
“There’s been tons and tons of start ups within this space,” Quinby said. “We’ve been tracking this and there is more money in vacation rental start-ups than any other industry sector within travel. It’s really quite extraordinary.”
Most are trying to take a bite out of the untapped demand that made Airbnb a global sensation. The company, started in 2008 in San Francisco, has more than 3 million listings across 191 countries. While vacation rentals are not a new concept, Airbnb’s model took travelers into resident’s first homes rather than their deserted vacation homes, thus shifting the focus of private accommodations into urban markets where hotels typically dominated.
“This whole thing has blown up and gotten so much attention because Airbnb has shown there is demand for these kinds of accommodations in urban destinations,” Quinby said.
But with growth has come friction, as cities have tried to tax and regulate rentals, much as they do hotels.
In Miami-Dade, companies like Airbnb have seen considerable opposition from the cities of Miami Beach and Miami, which argue that the short-term rental industry is eroding the quality of life of their neighborhoods.
Miami has outlawed short-term rentals in suburban areas and Miami Beach has imposed hefty $20,000 fines on anyone caught renting short-term in an area not zoned for that use, which is all single family homes and some multi-family buildings. The region is among the most contentious Airbnb battlegrounds in the nation.
And yet, the start-ups are flocking here.
Navigating anit-home sharing Miami-Dade
At face value, Miami is an attractive option for any company headquarter: it’s got lower costs than some international cities, but with global flair, proximity to Latin America and access to Europe. That’s why Parker Stanberry, founder and CEO of Oasis, brought his “home meets hotel” concept to Miami.After founding the company in 2009 in Buenos Aires, Stanberry moved Oasis to Brickell in 2014 and now heads a 25-person team locally. The company has 2,500 listings across 22 cities in the U.S., South America and Europe.
Oasis properties are closely scrutinized for their design and location, among other things, and are typically second homes or investment properties. The owner is never on site. Local staff serve as a concierge, serving needs from extra cribs to an airport transfer. Oasis guests get hotel perks through spa, gym and club memberships.
In Miami, for instance, where Oasis has about 85 properties spread primarily across Brickell, downtown Miami, Midtown Miami and South Beach, visitors get gym credits with Barry’s Bootcamp, spa credits with Zeel and beauty credits with Glamsquad, among others.
“We created this to be the best of both worlds,” Stanberry said. “Like a deconstructed hotel.”
Like hotels, Oasis collects tourist taxes. Still, it operates in areas that are opposed to home sharing. That doesn’t discourage Oasis from being based here, though. The challenges in Miami are similar to others cities where short-term rental regulations are a barrier to growth, Stanberry said.
“Many of our destinations have regulations that we have to navigate, and we work closely with homeowners, corporate partners, and municipalities to ensure compliance on a case-by-case basis,” he said.
But keeping up with the breakneck pace of the evolving short-term rental conversation in Miami-Dade is a challenge in itself. Because of the changing local landscape surrounding short-term rentals — Miami Beach started imposing fines in March 2016, Miami enforced its ban in March of this year, and other regulations are in the works — HomeEscape founder and CEO Avi Vaknin said it’s almost “impossible to know which location is allowed to do short-term rentals.”
Vaknin’s Miami Gardens-based start-up went live in 2015. With a background in technology and having served as a short-term rental host, Vaknin decided to build a platform catering to hosts that gives them a place to list their rentals, without charging them a percentage of the booking fee, like most sites including Airbnb and Oasis do.
“My concept was to never charge anyone for using my platform,” he said. Then in early 2016, VRBO and HomeAway, both owned by Expedia, disallowed off-site communication between owners and potential guests — a practice that often led to transactions where owners pocketed the full cost of the stay.
“All of a sudden overnight I have 200,000 users renting on HomeEscape,” up from 20,000, Vaknin said. “They are feeling cheated on [by VRBO and HomeAway]. I’m giving them everything.”
On HomeEscape, home owners list their properties for free but can pay to boost their listings to the first page of results. They also can pay a 3.5 percent fee that allows them to get paid as soon as a listing is booked. The platform, which largely leaves the quality and control of rentals in the hands of owners, has 11,000 listings worldwide in 42 countries and about 160 listings in Miami Beach.
HomeEscape home owners are expected to pay tourists taxes but the platform does not collect taxes on behalf of its owners like Airbnb does.
Vaknin acknowledges that if local municipalities begin to enforce short-term rental rules on all sites, it will likely end the practice here altogether.
“[Home sharing] will be something that will be missed in this market,” he said.
Operating in the legal space
For companies operating in the narrow space of legal short-term rental neighborhoods and condo buildings, local regulations threaten the growth of their business.Brickell-based YouRent has about 100 listings in Miami, fewer than in Nashville and Austin, the other two cities where it operates, because of short-term rental limitations and the seasonality of the South Florida hospitality business. (The site plans to expand to San Diego, Boston and Denver in the next 90 days).
But YouRent chief operations officer Brian Ferdinand thinks the push back from Miami Beach and Miami is temporary.
“It’s an education process and it’s a lot of red tape to cut through with respects to understanding the financial benefits compared to the hotel industry — and allowing for both,” Ferdinand said. “As you get the business regulated and proper structures in place for tax and regulation and permitting, you have such a financial benefit to the city that it’s almost nonsensical to not allow it.”
YouRent works like a property manager, purchasing the leases for units, decorating them and renting them across more than 100 different vacation rental channels, including Airbnb, Expedia, HomeAway, Travelocity and Orbitz. The site collects taxes, requires renters to take out rental insurance (or leave a deposit) and screens guests for sexual predators. Those regulations are similar ones Miami-Dade County is considering for unincorporated Miami-Dade.
“It’s very hard to argue with regulating and taxing,” Ferdinand said. “The problem you have, like in most industries early on, is the bad apples that spoil it for the rest.”
Vacation rental companies like YouRent and Portland, Oregon-based Vacasa, which has about 50 properties in Miami, operate much in the way that local governments would like to see the short-term rental business function. (Like Vacasa, YouRent keeps a support team on the ground; however, Vacasa also retains and pays hosts. The companies pay taxes and operates only in buildings or homes where rentals are allowed. )
Cliff Johnson, co-founder and chief development officer at Vacasa, said banning rentals altogether often has the opposite reaction cities are hoping for.
“What you have banned are the good operators from working in your city and inviting the people that don’t care,” Johnson said.
Founded in 2009, Vacasa now operates in 11 countries. While it has grown quickly in markets without restrictions, Vacasa has struggled to scale in Miami, Johnson said.
For their part, local officials have argued vehemently against the practice. Miami Mayor Tomás Regalado and Miami Beach Mayor Philip Levine say they receive many complaints from residents about noise, security issues and other disruptions at short-term rentals.
But Johnson said most companies have a method for trying to filter out bad actors. Nor is it in their best interest to flood neighborhoods with an influx of visitors who overwhelm local flavor.
“I think its overstated most of the time when people say, ‘I’m not going to know who my neighbor is.’ [Then] someone will say, ‘Well who is your neighbor right now?’ [People will reply,] ‘Well I don’t know.’ At least [short-term rental neighbors] are temporary,” Johnson said.
Vacasa, which pays a $15 minimum wage to its 10-person local staff, hopes to expand in Miami — if regulation allows.
“I can see us growing there as a regional hub in the future,” Johnson said.
©2017 Miami Herald Distributed by Tribune Content Agency, LLC.
