Are Homes In Your Neighborhood Turning Into Airbnb Rentals?

The house next door recently sold and your long-time neighbors moved to Florida. You find yourself enjoying a nice weekend in your backyard and notice people who seem to be the new neighbors. Naturally, you wave hello. The busy week goes by and you make it to the next weekend, finally able to lounge in the sun. The new neighbors are outside again, but they look different. Are these the same people as last week? Curiosity gets you, so over you go to strike up a conversation. Turns out they’re not the new neighbors at all – they are weekend renters through Airbnb!

With New Jersey homeowners renting out over 14,000 units on Airbnb, this scenario with short-term rentals (STRs) is playing out more and more frequently across the state. This article by Joe Atmonavage lists the 25 towns in NJ with the most Airbnb rentals, which are much more prevalent and accepted in Jersey Shore towns and urban areas outside of New York City. Conversely, STRs in suburban neighborhoods are unexpected for residents and leave some with anxiety over their property value and family’s safety.

One homeowner couple in the White Meadow Lake community of Rockaway Township, NJ (Morris County) was outraged at the conversion of their neighbor’s home to an Airbnb rental. They went to their Property Owners’ Association to raise their concern, only to be told that since this type of scenario was “new” to their community, there wasn’t anything in the existing by-laws to address the situation.

If you ask homeowners what they think about the effect of Airbnb’s STRs on their local community, you may get differing opinions, especially when it comes to property values. According to a Washington Post article by Ilyce Glink and Samuel J. Tamkin, “In terms of the effect short-term rentals have on neighbors, it’s a negative effect if the neighbor is renting what’s known as a ‘party house,’ but a positive if a property can advertise ‘rentable areas,’ such as an in-law unit or coach house with its own entrance.” According to some realtors, homes that have ‘rentable’ features may even sell for more money.

Realty Times provided some pros and cons of STRs in neighborhoods, and whether they had an impact on home values and sales. Some of the pros included higher sale prices for homes with ‘rentable’ features, increased vacation home sales and financial help to struggling homeowners. The cons consisted of party house reputations, non-stop strangers (a natural cause for concern for parents with young children), and longer lead-time for house sales with lower selling prices.

At the end of the day, STRs through sites like Airbnb can have both a positive and negative impact to property values and home sales. A lot depends upon the type of neighborhood the rental is in (location, location, location!) and the renters – along with their behavior.