Free-markets and private property rights are all well and good on paper and in the abstract. However, when abstract meets reality’s road, these questions are not so easy.
The other day, a neighbor dropped by with mail mistakenly delivered to her address. After pleasantries were exchanged she asked,”Do you know about the house across the street?” The family had moved and the realtor’s sign was gone. Most of the time the house seems empty, however, one particular Sunday, our quiet cul-de-sac erupted into what looked to be a spring break bacchanal.
When I responded “no,” my neighbor informed me the home had been purchased to be rented out as an Airbnb. She said the neighborhood (9 homes) needed to band together to do something about it, “otherwise that house will hurt our property values.”
What immediately came to mind was the new buyer has no duty to us neighbors to do all he can to maintain our property values. I pointed out in my book, “Walk Away,” one argument often used to denigrate those who walked away from their mortgages after the 2008 crash is neighboring property values decrease. “No one has that power,” I wrote. A person does not own his or her reputation and in turn they do not own a property right in the reputation or reputed value of their home. It’s the same as Murray Rothbard wrote about individual reputations, which are “purely a function of the subjective feelings and attitudes held by other people.”
However, I didn’t invite my neighbor inside for lemonade and a discussion of Rothbard’s theory about reputations as it might apply to property values. Nor did I argue that potential Airbnb landlords might bid up values if they could achieve high rents in our neighborhood.
Instead, I let her comment pass without response.
She emphasized that on one occasion shots were fired at the residence and the police were called. “I didn’t hear that,” I said. The shots had not disturbed my slumber, however, my wife claims she heard the shots.
“He’s even put an entry in the back wall of the property, so people can come and go from that other street.” I only mustered a weak, “I’ll have to check that out,” in response. Later a did take a look at the property’s back wall, and indeed, the new owner has installed a back gate to the property, which, frankly, I think is smart as it may keep his tenants out of the cul-de-sac and his business off the radar.
Fox Business claims the Casino Resort industry doesn’t care about competition from Airbnb. However, most of what tourists believe is Las Vegas is actually, unincorporated Clark County (including the Strip), and short-term rentals were banned in Clark County in 1998.
In response to several complaints, the City of Las Vegas (where I live) just instituted new rules for short-term rentals, but put government first by requiring $1,030 in fees for a special use permit. Neighbors will be notified when a permit is applied for and will presumably be able to express their displeasure with applicants they don’t approve of at City Hall.
Julie Davies of the Vegas Vacation Rental Association says, “What the bill is going to do is put people underground … It is going to make the unlicensed ones thrive more.”
Airbnb Press Secretary Jasmine Mora sent this statement in response to the council’s decision: “While dozens of cities around the globe are embracing the economic benefits of home sharing, today’s decision is a step in the wrong direction that threatens an important economic lifeline for thousands of Las Vegas families.”
There is no home sharing going on at our neighboring short-term rental. The landlord (or innkeeper) only shows up to deliver more towels and whatnot. The house had lots of activity last weekend, with 6 cars parked on the street in front of the house and in the driveway. Besides that, a continual stream of cabs and Ubers were ferrying people to the home throughout the night, I was told by my light-sleeping wife. However, all was quiet in the morning. A stray red solo cup on the home’s front sidewalk the only remnant of the previous evening’s activities.
If Mencken were here he might tell us to mind our own business, and call us puritans, as his definition of puritanism was, “The haunting fear that someone, somewhere, may be happy.”
My street’s Airbnb’s owner lists the property for $604 per night (with a 2-night minimum), and the home, which a couple months ago housed a quiet family of four, now “accommodates 16+” according to his ad, and is, “Suitable for Events.” He advertises, “5 miles away from the Strip, 7 HD Televisions, pool, hot tub, blackout shades, Amazon Fire sticks, full accommodation for any type of vacation. Plenty of fine dining and fast food nearby.”
As full disclosure, the owner should add, “and plenty of angry neighbors next door.”