Airbnbs hitting’ the number of affordable homes
A boom in Airbnb-style rentals may have slashed the number of affordable properties for Bermuda residents, it was warned yesterday.
Agents and property hunters believe there has been a marked drop in the number of homes offered for long-term lease since the vacation-letting market took off.
The profitable business, where accommodation is rented out for short periods of time to holidaymakers or business travellers, became more popular in the run-up to the 2017 America’s Cup.
The Bermuda Tourism Authority said the number of Airbnb listings in Bermuda doubled last year, with the model claimed to be an “enormous opportunity” with “room for growth”.
But some local house hunters feel the surge has restricted their chances of finding long-term accommodation.
One mother said she had outgrown the single-bedroom apartment she shared with her daughter and wanted a cottage so she could set up home with her fiance and their children.
She claimed the availability of rental properties has dropped since excitement — and opportunity for profit — started to build around the America’s Cup, and that an increase in rents followed.
The 35-year-old, who asked not to be named, said: “One-bedroom homes for $1,200 to $1,300 became $1,800 to $2,000.”
She added: “The houses that are supposed to be available are turned into vacation homes; the apartments that are supposed to be available are turned into vacation homes.
“I’m living here in Bermuda, I’m registered Bermudian, my child is Bermudian, my fiancé is Bermudian.
“We need long-term homes and you can’t find them because everybody that’s here now, it seems like they want to make it for foreigners not Bermudians.
“It seems they want to make it a travel location, like they want to push Bermudians out of here.”
Christie Lusher Plathe, a rental and sales agent at Joy Lusher Real Estate, said demand for rental properties in lower price brackets had always been high, but she had noticed a tighter market in the past 18 months.
She explained: “We don’t deal with a ton of properties in the $3,000 and below mark, but they have been less frequent and I do have a lot of clients I try to assist, and it has been tough.
“A lot of people are renting them privately to cut out the agents as the middle man and a lot of people in that price bracket are doing Airbnb or vacation rentals by owner.”
She agreed that the increase in holiday rental properties may have affected the market.
Ms Lusher Plathe said: “I think it certainly plays a big part.”
The agent added that Bermudians “are having such a struggle finding things”.
She said: “It’s frustrating how tough it is to find a good-quality rental unit in an affordable pricing bracket.”
Brian Alkon, also a real estate agent, explained some property owners use vacation lets as a way to generate income between long-term tenants and said this included three-bedroom homes.
He added: “I say to myself, why is it harder to find these rental properties that we need for people?
“The only thing it suggests is that they’re finding an alternative, which I think is Airbnb.”
Allison Settle-Smith, a rental associate at Rego Sotheby’s International Realty, said none of the firm’s rental properties had been converted to vacation lets in the past year and the price of an average one-bedroom apartment has “remained consistent”.
But she added: “It is possible that an increasing number of owners using services such as Airbnb to rent their apartments has created lower supply and higher demand for one-bedroom apartments across the island.”
Martha Dismont, executive director of Family Centre, pointed out that Bermudian families are among those who had developed Airbnb rentals to support mortgages and general living costs.
She said people who had asked for help from the centre had not raised concerns about a lack of affordable housing, but that the “cost of living in Bermuda continues to be very difficult”.
The Vacations Rental Act 2018 was launched this week and introduced a 4.5 per cent tax on vacation rentals, which is expected to generate up to $750,000 for the BTA.
Justin Mathias, a One Bermuda Alliance senator, said he supported a wider range of options for island visitors.
He added: “What protection is there going to be for rent-controlled units to make sure that they’re not all going to be turned into vacation rentals, because those landlords can make more money from that?
“It’s less hassle, you only have to deal with four months out of the year instead of the whole year.”
He added: “I think that vacation rentals is a good business because it gets people from a tourism perspective; it makes them be part of the community more than taking a hotel.
“I just think we should be capping so there’s a protection for Bermudians and that’s what concerns me.”
Jamahl Simmons, Minister of Economic Development and Tourism, said: “Having conferred with my ministerial colleagues, our government remains committed to ensuring that every Bermudian has access to affordable housing as we seek to expand opportunities for Bermudians to enter and succeed in the vacation rental market.”
He explained the new legislation included measures designed to protect tenants, including “where a landlord seeks to register the premises as a vacation rental unit” under the Bermuda Tourism Authority Act 2013.
Mr Simmons said: “It should be noted that while the Act does not limit the number of vacation rental properties, there are provisions in the Act that serve to deter homeowners from ‘pushing out’ residents from the rental market.”
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