Posted September 13, 2018 14:53:10New Orleans apartments have been hit by an Airbnb bubble.
The home improvement company claims the influx of people renting out their homes on the platform has created a ‘disturbingly rapid’ increase in vacancies.
But one resident says there was no warning.
A woman who asked not to be named says she bought her home in December 2017.
She says she was planning to move into an apartment with a young family in 2018.
“The apartment was not what I was expecting, and when I called, the agent told me the vacancy rate had doubled since the end of March, which was really surprising,” she said.
“It was like they just had a massive increase in the number of vacancies, so I was a bit nervous.”
She said she was initially concerned about the number and then saw the increase in prices and found the agent’s response was misleading.
“The agent said I would have to pay $300 a month to live in a condo, which is not what the apartment would cost, but she told me that my rent would be $1,600 a month, which she did not specify, so she would get that money from the Airbnb.
I thought I was making a bad choice, because I knew what the rents would be,” she told News.co.nz.
In her first rental, the property was worth $1.1 million, but when the agent saw that it was $1 million short of what the property could rent, she said she had no choice but to rent it out for less.
Her home, which had been built in 1996, was bought in 2018 and was sold for $1 in 2018 to a developer for $4 million.
The woman said she knew it was a short-term rental, and had no idea that she would be moving out in less than two years.
But her fear of being left out of the housing market caused her to sign a lease in December, which included a condition that she pay her share of the rent on the day she moves in.
It’s not the first time a New Orleans resident has had to pay a significant rent increase.
New Orleans has one of the lowest property taxes in the country, but in 2017, the city was hit with an $8 billion budget deficit.
One local developer, Tom Buechner, told the New Orleans Advocate that he’s seen the same problem.
He said it’s not a bad thing if people don’t want to pay for rent, but he has a few ideas for what he says could make the situation worse.
“One of the first things I would do is, you can’t rent a home to people who are renting out because of the way they have a bank account, or they don’t have a mortgage, or that they are taking advantage of their children,” he said.
The next step is that if they’re paying the rent, they should be reimbursed for it, but it’s something that needs to be looked at, he said, adding that he thinks the city should consider imposing new regulations on Airbnb.
“We’re not in a perfect situation, but we are making some progress,” he told the newspaper.
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