The Anderson Family
P.J. and Rachel Anderson are a young couple with two children living in Germantown, a growing neighborhood just north of downtown Nashville. He’s a professional Christian singer-songwriter who is often on the road. She’s a graphic designer, and since she can work from virtually anywhere, Rachel and the kids try to travel with P.J. as often as they can. While they travel, P.J. and Rachel use a service called Airbnb as a means to supplement their income. It’s changed everything for their family.
Airbnb is a website for people to list, discover, and book homes and apartments in other cities. An alternative to traditional hotels, Airbnb is often cheaper and typically offers a more unique experience, such as staying in a residential neighborhood, having more space including a kitchen for cooking, etc. Airbnb has been massively successful, especially in Nashville, where it has introduced countless tourists to the city, addressed an often-cited hotel shortage that has been used to justify millions of dollars in taxpayer subsidies, and supplemented the incomes of thousands of middle-class entrepreneurs.
Airbnb is exactly like Uber. People want it, except for special interests that have to compete. That’s why the taxi industry tried to regulate Uber out of existence, and that’s why the hotel conglomerates support stringent regulations on Airbnb. P.J. and Rachel’s case is about preserving the ability of middle-class families to use their property in a way that helps them provide for their family and their future.
By renting their otherwise vacant home on Airbnb when they are out of town, P.J. and Rachel don’t have to worry about how to pay their mortgage each month. They can save and invest in their family’s future. Airbnb means financial peace. Or it did.
Due to family and career decisions, P.J. and Rachel may soon have to move their family, but they love Nashville, their house, and they want to keep it. When P.J. and Rachel looked into moving, Nashville suddenly denied them a permit to continue operating their home on Airbnb. They don’t want to sell the home they love. They hope to return to it some day, but they need to continue to earn a small side income to supplement their sometimes sporadic income from their regular jobs in order to keep the home in their family.
Yet, P.J. and Rachel have been denied this opportunity because there are no more non-owner occupied permits available for their Germantown neighborhood. This isn’t fair. They listed their home on Airbnb for more than a year. Out of 40 reviews, they have a five-star rating and overwhelmingly positive comments. Just because several of their neighbors are also on Airbnb, it shouldn’t limit Andersons’ ability to use their home as they see fit.
The reason that P.J. and Rachel can’t obtain a permit is because, effective July 2015, Nashville passed an ordinance that directly impacts Airbnb-ers like them. This poorly crafted ordinance requires a permit and unnecessarily infringes on P.J. and Rachel’s constitutional rights. Because of an arbitrary 3% cap on the number of non-owner occupied permits available, P.J. and Rachel were not able to get the permit they need to keep their current home as a valuable source of revenue when they move. The few permits available for their neighborhood—just 28 of them—have been claimed. P.J. and Rachel now have to make important family decisions based on the expectation that they cannot maximize their home’s value when they move.
This new ordinance is oppressive and unfair. Airbnb is a positive addition to Nashville, a city that currently allocates millions of taxpayer dollars to attract hotels because of a perceived shortage in bed space. Airbnb helps Nashvillians too. Like many Nashvillians, especially those who live in areas close to restaurants, bars, sports stadiums, and other attractions, the rules of the game have suddenly changed. As a result, P.J. and Rachel—and many like them—have lost the financial ability to better support their young family.
The sharing economy has made entrepreneurs out of a whole new generation. Companies like Uber have experienced rapid success because of their convenience and affordability. But with that success comes attacks from established interests. Airbnb users currently face such a challenge.
The hotel industry has looked at Airbnb’s success and correctly perceived it as serious competition and a threat to its bottom line. Just as taxi companies responded by pushing for onerous regulations against Uber rather than engaging in honest competition, hotels are eager to make it more difficult for Airbnb to thrive. But why should big hotel chains from outside Tennessee make millions off tourists (and taxpayers via handouts and tax breaks), while P.J. and Rachel are banned from making a little extra income by opening their home to those same tourists? Unfortunately, cities are all too eager to accommodate the hotels to the detriment of everyday residents.
Even before the ordinance, Airbnb was a win-win for the city. For Airbnb-ers, it is a great way to get a little financial cushion, as well as the thrill of participating in a growing business model. For the city, Airbnb has attracted tourists from all over who want to experience Nashville like the locals do. Those tourists bring their dollars and spread them around. A study in Chicago found that for every $100 spent on a short-term rental, another $69 went to food, $24 to transportation, $59 to shopping, and $48 to entertainment.
Not only that, Airbnb addresses the much-cited hotel shortage, a problem so dire that Nashville literally allocates millions of taxpayer dollars to remedy it. The recently constructed downtown Omni Hotel alone is estimated to cost Nashville taxpayers more than $125 million over the next 20 years. Airbnb is not only free, it generates both tax dollars and tourism dollars. Nashville should do everything it can to encourage the growth of Airbnb in neighborhoods like the one where P.J. and Rachel live, not discouraging it with hastily crafted and burdensome regulations.