Markus Spiske/unsplash.com


It was a move that made headlines across the nation.

Aimco, one of the largest owners and managers of apartments in the U.S., filed lawsuits against Airbnb in California and Florida last month. The owner–operator is asking for monetary damages and an order that would prevent Airbnb from listing Aimco units on its website.

Aimco, like so many other multifamily companies, doesn’t allow its residents to sublet their apartments for short-term rentals, “whether through Airbnb or otherwise,” according to a statement from the firm.

The litigation was spurred in part by the bad behavior of some people who rented Aimco units through Airbnb, Aimco said.

Denver-based Aimco is reportedly the first major apartment owner–operator to file suit against Airbnb, but this isn’t an entirely unexpected action. For a host of reasons, the multifamily industry has long had deep concerns about Airbnb and similar sites that facilitate short-term rentals (defined as those rentals that are fewer than 30 days, not to be confused with short-term leases; my firm, JVM, like many other apartment operators, offers short-term leases as brief as three months).

Apartment management companies typically prohibit their residents from subletting their units, but companies like Airbnb provide residents with a difficult-to-track method for violating their leases by doing just that.

Last year, in an effort to address this issue and provide owner–operators with another ancillary-revenue stream, Airbnb launched its Friendly Building Program. Through this initiative, apartment companies allow residents to rent out their apartment homes on the website in exchange for a slice of the resulting revenue.

But even with that program in place, it’s hard to see our industry truly embracing Airbnb anytime soon. Simply put, permitting residents to sublet their units on Airbnb and other sites isn’t a good idea. Here’s why.

Honor Thy Customer
Perhaps the most powerful reason that allowing sublets via sites like Airbnb is bad business is also a very simple one: Residents, in general, don’t like the concept.

Last year, in research commissioned by MFE, J Turner Research posed several questions in a survey of nearly 85,000 apartment residents nationwide. In response to the question, “Are you more or less willing to live in a community that allows short-term rentals?” just over 25% of the respondents said they would “definitely not” live in such a community, and, overall, more than 64% “expressed a degree of negativity regarding short-term rentals,” the research firm noted.

Multifamily residents are probably leery of short-term rentals for largely the same reason owners and managers are—it’s uncomfortable to have people passing through a community who aren’t invested in its long-term value and who haven’t gone through background checks.

If your primary customer has such strong reservations about short-term rentals, why permit them at all? You’d just be driving away the people who account for the majority of your revenue.

The List Goes On
There are other reasons, as well, that Airbnb and similar websites will continue to face resistance from apartment owners and operators.

For one, short-term rentals present the potential for numerous legal and liability issues. As attorney Morgan Stewart asked on MFE’s website last year, “What risks, if any, exist from having an invitee enter into a property without background checks, and what if they injure a long-term tenant or their property?”

Furthermore, a community that allows short-term rentals could very well face a logistical nightmare. How does the short-term renter get into the community if it’s gated? Where do they park if there’s assigned parking? How do they get into the elevator if it requires the use of a key fob? What about access to amenities?

Also, owner–operators invest a considerable amount of money into the upkeep of our communities. Why should we allow a business like Airbnb to ride on our coattails—at our expense—to make a profit?

Finally, although there’s potential ancillary revenue owners may earn by participating in the Airbnb program, there’s a financial disincentive, as well: hospitality taxes. If a short-term rental falls below a certain threshold, your community may, depending on its jurisdiction, be subject to hospitality taxes, just as a hotel would be.

There’s no doubt Airbnb and similar services have revolutionized the travel business, giving consumers an often-cheaper alternative to hotels and allowing homeowners the chance to make some extra income.

At this time, however, allowing short-term rentals through companies like Airbnb isn’t a good fit for the apartment industry. And I, for one, don’t see that changing for a long time.