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Boom: Mayor proposes ban on investor-owned Airbnb units
By adamg on Wed, 05/09/2018 - 1:26pm
Mayor Walsh today announced a new proposal for dealing with short-term rentals that would by default bar investors from buying up units or even entire buildings and offering rentals on Airbnb and similar sites.
Under the proposal filed with the City Council for its consideration, investors could still offer units for short-term rental, but only if they could convince the zoning board to grant them approval to switch residential units to commercial - a potentially lengthy process involving public hearings in which nearby residents could have their say.
Walsh's proposal, backed by at-large City Councilor Michelle Wu, who had earlier offered her own proposed regulations, would let occupants of apartments, condos and houses offer space via Airbnb and its ilk under certain conditions:
- Anybody could rent a private bedroom or shared space in the owner's primary residence, provided the owner paid a $25 annual licensing fee.
- Homeowners could rent out their primary residences - for up to three months out of the year, upon payment of a $200 annual fee.
- Owners of two or three-family buildings, in which they live, could rent out one or more of the units they don't occupy for up to 120 nights per year - as well as list their priimary residence for rent at any times, for a $200 annual fee.
The proposal would bar rentals in units that have safety, sanitary or zoning violations altogether.
In the preface to his proposed ordinance, Walsh said he decided to strip out the investor-owned units he would have initially allowed after talking to residents over the past couple of months:
Bostonians want to be able to access the economic opportunities that short term rentals can provide, but they recognize the importance of establishing reasonable regulations that limit certain short term rental uses in a way that protects long term housing from being converted to commercial short term rental use. ... Ultimately, we decided that this type of short term rental use in residential units was not what most Bostonians wanted, so we've removed it from the policy.
In a statement, Wu said:
This ordinance offers reasonable regulations of short-term rentals to close corporate loopholes, protect our housing stock, and stabilize neighborhoods. I'm proud to support this legislation as the Mayor and City Council work together to stem Boston's housing crisis.
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Comments
"Provided the owner paid a $25 annual licensing fee."
The other shoe dropping was a matter of when. Explain to me how effectively raising taxes helps the little guy, oh great and benevolent Democrat.
Elect this cult's followers again.
Will
Twenty five dollars is trivial compared to when your guests find the toilet paper storage and take it all.
I'll explain to you how it
I'll explain to you how it helps the little guy: Because now there will be more places for residents to reside in. Increased supply of apartments will help keep rents from skyrocketing even more. And it is not a tax. It is a fee for basically running a hotel.
Rentals
When I think of an AirBnB in Boston (and maybe I'm wrong), I think of someone renting in the North End, Back Bay or just a generally more affluent Boston neighborhoods - places that are not necessarily going to help increase residency for the average Bostonian. I don't envision AirBnB's in Roslindale, Dorchester, Roxbury or W. Roxbury which i consider more of a "working persons" section.
Also - the additional "fee" is really the true intent here.
Yeah, they've gone beyound the "traditional" unit
Just last month, I wrote about a fight involving a guy managing a slew of Airbnb units in East Boston. More recently, there was a report of some guy renting out his BHA apartment in South Boston.
In areas that are already undergoing rapid gentrification (like East Boston), it's potentially a major issue - especially if you have people renting entire buildings and evicting the tenants to make way for short-term renters.
Agree but disagree
So yes, if people are buying entire buildings and evicting the tenants to make room for short term rentals, I believe that is a problem. Financially, however, that just doesn't make sense. Short term rentals like AirBnB's (w/the exception of a rare instance) would not be as financially sound as to a long term tenant.
I could see where, in some instances, maybe like the article you previously referenced, people using AirBnB's more like a "flop house" and taking advantage. Boston is expensive, because people want to live here - I don't think that is a bad thing.
Unfortunately, it does make financial sense
"Financially, however, that just doesn't make sense."
Sadly, it does. On my tiny street in Roxbury, there are multiple full time air bnb units owned by investors. They're averaging about 2x the rent they could get from long term tenants. I have an acquaintance who's shopping for a multifamily specifically to airbnb the units full time. She already has several other units around town. This is a real issue.
The counterpoint of course is that this indicates a huge market failure by the hotel industry. People want a different product than what's out there. We should also be encouraging our lawmakers to find ways to allow innovation in the hotel business. There's a demand for an authentic neighborhood experience, lower priced rooms, large units with multiple rooms and a kitchen for groups, etc. And that demand isn't being met by the industry.
Financially it just doesn't add up
With apartments being at a premium, I just don't see the occupancy being there enough to be more financially sound.
Lets say you could rent long term for a year at $2k a month = $24k per year.
Short term rental to get the $2k per month at a 55% occupancy rate each and every month (30 days x .55 = 16.5 days, $2k / 16.5 days = $121 per night). Then you have to consider taxes, cleaning, management company, insurance and advertisement. So lets say all of these additional expenses are $200 per month ($200 / 16.5 days occupancy is and additional $12- per night which brings your nightly total to $133). You would need to rent out your house for 180 days at $133 per night, per year to break even.
So honestly in order for this to work I am either off on the nightly amount one can charge or the occupancy rate - and I am having a hard time conceptualizing that you can get a higher occupancy rate or higher amount in a working class section of Boston.
BTW - I'm really not trying to be difficult, I'm very curious how one turns an Airbnb rental into a greater financial opportunity as opposed to a long term renter.
Your math is off
I rent my 1-bedroom basement unit in Fort Hill for $1200/month and include heat and hot water. I could probably get another $100 a month but I like my tenant. It's a small basement unit but I've tried to make it nice. I work in real estate and keep a close eye on the market and for similar units $1200-1300 is about right in my neighborhood.
47 Fort Ave around the corner sold recently. In the listing disclosures (not available to general public), they say this about the 1-bedroom basement unit. " Lower unit has grossed an average of roughly $2,100/month from rental site Air Bnb in 2017."
There you have it. They're getting $900 more per month for an equivalent unit, 75% above comparable long term rents.
As for expenses:
There are currently 16 entire apartments listed on AirBnb within a 5 minute walk of my rental unit. Two of them are illegal studio apartments at about $60/night. The next cheapest are several small 1-bedroom units that start at $125/night. There are apartments as high as $350/night, which is very cheap by Boston hotel standards for a nice 4-bedroom home, but very expensive by area rental standards where that house would rent for a max of $4400/month. So AirBnb allows landlords to charge a nightly rate about ~3x what they would get if they were doing long-term rentals, and to put illegal units into service. Even accounting for vacancies and expenses, that 3x boost translates to a healthy increase to the bottom line.
One of the apartments listed is in this building, which was rehabbed with $3.8M of grants and donations and is supposed to be made available to middle and low-income people: http://historicboston.org/portfolio_page/alvah-kittredge-house/
See the problem now?
ok
So you work in this field, and you know the market; and based on what your saying the rent is higher through AirBnB. My open questions are:
1) What is the occupancy rate? Based on your $900- more a month, that is based on full occupancy. $1,200 a month x 12 months is $14,400, $2,100 a month x 12 months is $25,200. Based on this the occupancy rate has to exceed 57.14% for the AirBnB to net more than the rental? Do occupancy rates outside downtown really exceed that? Greater hotels in Boston averaged a 59% occupancy rate source - (http://www.pkfboston.com/publications/trends-in-the-hotel-industry/q1-2017/)
2) If the demand is so high with AirBnB's, does that mean rent is too low? Why can you magically get $2,100- from a month from a short term rental, and not $1,800- from someone on a years lease?
"See the problem now." Honestly, no. The problem is lack of housing in the City. If a property owner wants to maximize their investment, they should be able to. Boston is a small, popular City - space is limited.
Occupancy is irrelevant
1. The only thing that matters is the bottom line. AirBnb rentals are providing - with one data point - 75% more income for the landlord. Nobody cares what the occupancy rate is, they care how much they take home. I don't know how much that apartment is charging by the night. I don't know if they charge more in summer months. Etc.
2. That's a detailed microeconomics question, but the answer is likely that short term renters and long-term renters are each their own markets, not substitutes. The price the long-term rental market will bear is not and should not be the same as the price the short-term market will bear. You could convert so many apartments to airbnb usage that the gap narrows by reducing supply for long-term renters and thus jacking up the price. In fact, this is already happening. But that is terrible from a social policy standpoint.
We need more housing, more hotel rooms, and different types of hotel rooms. But I don't buy that landlords should be free to convert residential units to hotel rooms at will just because the return is better. We have zoning for a reason, and if we want to change the zoning there's a process to go through.
Nope
I assume we are not talking about renting out rooms, but rather whole dwellings - places that a family or person would normally be able to live by themselves?
75% more income does not hold water. First, the example you gave me was $1200 for a traditional renter vs $2100 for an AirBnB renter. This is 57% increase, which isn't 75%, but grant it a good chunk of change. The only way that holds up is by having the place occupied more than 7 months a year. Look at the calendars of the Boston AirBnB's - they are not were close to that!!! A 75% increase through the course of 12 months one a single home/apartment dwelling is complete and utter BS.
I do see a huge boom for people renting out bedrooms within their home, and how that could be profitable.
This AirBnB rouge is a strawman's argument to increase affordable housing in the City. I want to live in Beacon Hill, but I can't afford it so I don't.
Your math is still wrong.
First, 900 is 75% of 1200. So $900 more than $1200 is a 75% increase.
Second, I don't know what the vacancy rates are or the average nightly rates are. But I do know that this landlord was advertising an average of $2100 a month in an MLS listing, which presumes that they have receipts to back that up for due diligence on the part of buyers.
I know that there are a number of full-time AirBnb rentals on my street (entire units). Renting by the night/weekend is a pain in the ass. Landlords wouldn't do it if there wasn't a decent financial incentive over renting to long-term tenants. The one solid data point I have is a 75% premium. I can't say that it holds up across the board, but I know that the professional landlords who bought the place a few doors down would not be dorking around renting on AirBnb if they were not consistently, month over month, year over year, making enough of a premium to make it worth it. And I know that there are 16 rentals available right around my address within a 5-minute walk.
You can theorize all you want about vacancy rates, and scrutinize the calendars to your heart's content. That doesn't change the fact that multiple landlords in my neighborhood are happily doing short term rentals. Given that landlords generally want the highest return for the least amount of effort, you can surmize that these landlords are getting a premium on their units. I have had people contact me trying to buy units explicitly for airbnb use. These people tell me they make much more on airbnb than they do on long term rentals. I've given you 1 data point, which is a reported $900 premium. Is it a definitive economic study? No. But it indicates that the combination of occupancy and nightly rates makes it profitable enough to keep units out of long-term rentals and put them into short term rentals.
Most importantly, why are you arguing? You asked for real info on AirBnb. I gave you real numbers, which are hard to come by in this discussion. Take them or leave them. They're not an opinion.
So I was asking for data, and
So I was asking for data, and I do appreciate the information. The argument about housing in the City is there isn't enough, and the housing that is being built is not affordable which is forcing out mid to below average income families. While housing is a concern I do not think regulating or completely shutting down short term rentals free up adequate housing to solve housing issues in Boston. I agree with you that short term rentals as a whole do not help the housing issue - but I don't think if the City altogether stopped AirBnB rentals that wouldn't even cause a dent in the overall housing concern. I equate it to putting a band-aid on a bullet hole.
I think the Mayor and the City Council uses the guise of "housing concerns" to slap yet another tax on homeowners.
If the City was truly concerned with affordable housing they would focus on making more of it rather then wasting their time telling people what they can and can't do with their property.
short term rentals
Jason,
much of what you say is correct. Our family makes more on our short term rental. I would argue that you are incorrect about landlords generally wanting (or should I say getting) the highest return for the least effort. We get a higher return but with greatly increased effort. We are willing to put in that effort. It would be so much easier to rent by the year. Think about the cleanliness you expect from a hotel bathroom!
Many of the people who use our rental are visiting family but can not in the apartment or condo of the person they are visiting for various reasons. Accessibility or not enough space in their family members dwelling. Or perhaps they just want their own space after visiting their family during the day. The most common example of this that we have found in our rental are grandparents visiting after their children have a baby.
I doubt these folks would visit if they had to stay in a downtown hotel. So these rentals can help you also.
One additional factor that I have not seen discussed is that in our particular situation, we would have seriously struggled to stay afloat if we had had a difficult tenant situation and had a non paying tenant for many months. That worry mostly goes away with a short term rental. We were fortunate during the ten years we leased our unit as a yearly rental that this never happened, but it could have. We were blessed with excellent tenants but you never know.
My point exactly
That's exactly my point. You wouldn't go through all the headaches of AirBnb if it didn't offer you a LOT better return. If it were only a few percentage points higher, you would never deal with all the headaches.
And as far as problem tenants, I've also been lucky to have really great tenants. But that only came after I had one awful tenant and spent months in court. I know too many small-time landlords who end up sitting on vacant units because they've had bad experiences. Mass is too tenant-friendly for its own good in some cases, and the end result is that fewer people want to be landlords and the number of available units shrinks, which ends up hurting tenants - the very people the laws are trying to help.
I agree that AirBnb serves a useful purpose and don't necessarily want to see it eliminated. But I also don't want my whole neighborhood to be overrun by nothing but short term stay units.
The entirety of the single
The entirety of the single family next door to my apartment in Roslindale is listed on Airbnb (and it's not the only home in the area by any stretch). It would be nice if the owners would just sell, so another family could move in and enjoy the neighborhood.
Same woman lists 4 Rozzie houses
Sorry, if you are renting four separate houses by the night you are in the service industry, not someone trying to make a little extra change with their home.
Dorchester
When the last time you were in Dorchester? A three family not to far from out house sold for 1.7 million. Check out Airb&b and see what a night in a Dorchester will cost you.
I did......
According to AirBnb the average is $92- a night in Dorchester. AirBnb's do not have 100% occupancy. Of the approximately 50,000 homes in Dorchester, 176 "entire homes" are available to rent on AirBnb which is approximately .0035.
The right question to answer
Would be: What percentage to homes that have turned over in the past 5 years is that?
Helps lots of little guys
The whole thing helps the little guys who have to deal with their neighbors running unregulated hotels. It helps the little guys who can't afford skyrocketing rent. Yes, some little guys will now have to pay 25 to legitimatize a years worth of airbnb revenue, but 25 is a tiny amount compared to the amount of revenue from even one room rented for a few weeks
The way to increase the
The way to increase the supply of apartments (and hotel rooms) is to build more apartments (and hotel rooms).
This would ban the two AirBnBs I've stayed in (in other cities). They were both units in multi-unit buildings, but the hosts lived in adjacent units, and they were both in neighborhoods I wouldn't have visited otherwise (Wicker Park and East Harlem). If we don't want whole buildings turned into de facto hotels, fine, but this casts the net too wide.
No, it would not ban those units
It would limit their availability.
I read this as: you can rent
I read this as: you can rent your home, or part of your home, or another unit in the two/three-decker you live in.
If I own two apartments in a 20-apartment building, I can't rent one of them on AirBnB, even if I live in the building.
You could rent out via airbnb
But you'd have to get the zoning changed.
Conversely, you could see if someone would rent the apartment with a regular lease.
And there goes the point
Soaring over Kinopio's head. Here are three possible outcomes to this problem.
-Do nothing
-Ban investor-owned Airbnb
-Ban investor-owned Airbnb and also invent fees for other would-be part-time hoteliers
There's literally no reason for #3 to happen. Number 2 would have been fine. Number 3 is greed. Is the city going broke? Where's that fee going? Is it going to help home affordability in Boston? Why doesn't the homeowner just give the $25 to Pine Street Inn? Why is government involved in that transaction?
The fee
The fee is because the city wants to know where the units are. That is, if anybody complies.
requiring Airbnb report their Boston-based bookings
The city is also requiring Airbnb to report their Boston-based bookings. Maybe the city will let you pay the Airbnb fee on your income tax bill.
There is no "problem". Its
There is no "problem". Its $25 measly dollars! If you don't wanna pay it then don't run a hotel out of your apartment. The $25 will probably go to enforcing these regulations that will help keep rents from skyrocketing.
2 more cents
The idea of such modest fees is to help to cover the cost to the city to manage this. Who should be asked to help cover the costs, people who don't rent out their place on Airbnb or people who do? As someone who doesn't rent my place out, I'd prefer that those that do pay to play.
"Submit to armed theft by government"
"Or be barred from doing as you wish with your private property."
Gross, dude.
Go galt already
Nobody is stopping you.
Coming to America
"That's their one! Rocky Marciano!"
I love how the only retort against my Libertarian talking points is a book from 60 years ago.
Easy. You want to make money
Easy. You want to make money from renting out your apartment, which is neither a hotel nor commercially zoned? Play by the rules by registering and paying a tax (license fee). This way the city will have the funds to enforce the rules when the neighbors complain that there's a stream of strangers trashing the building.
Yeah and
It's $25 year. These places go for $100 a night on AirBnB. $300 a night depending on where you are so- little guy still makes plenty of money. It's the big guy who already has lots of money that may lose out, but something tells me they will be just fine.
enforcement
How is any of this being enforced? If they can't even keep people in Section 8 housing from listing a unit, then how can they enforce these relatively complicated ordinances?
This is my only concern. All
This is my only concern. All of this sounds good on paper to me but other cities that have regulated AirBNB to a degree or another have had a tricky time enforcing this.
The fact that portals like
The fact that portals like AirBnb manage all these transactions makes enforcement possible.
If it were craigslist, then enforcement would be difficult. But Airbnb tracks every night's stay and can encode the city's ordinance into their software.
Good point, but they don't want to
It's like the states that were (are?) fighting with Amazon to collect sales tax. For a tech-centered company like that, it was relatively easy to adjust their software to collect the relevant sales tax. But Amazon fought tooth and nail (since one of its lures was to people in states with sales taxes who didn't have to pay them online) and only started giving in when they started opening up physical operations in states (for example, here, to do their home deliveries). Airbnb is probably in the same position.
yea
Considering the campaign AirBnb has waged against Walsh, Wu, etc, I doubt they are excited to start working with the city of Boston to start implementing this on their side.
Honestly, if the city wants enforcement on the AirBnb side, the city should get tough for once and threaten an ultimatum of "regulate yourself, or stop operating here." Lol sorry that will never happen.
NYC comptroller has asked Airbnb
NYC comptroller has asked Airbnb to provide Airbnb data to substantiate their contradictions of NYC claims about short-term rentals. Airbnb has declined thus far.
can enforce the investor-owned units part
Basically, people get pissed off at investor-owned units being turned into hotel rooms. They file a complaint (311 is easy enough). Check ownership, ban from renting until approved as commercial, notify AirBnB that unit's illegal and must be removed from listings. If AirBnB refuses, I'm sure the city would be happy to take them to court on this issue - and AirBnB is likely to not want a ruling on it.
The rest is minor - the above is what really matters.
Thank you for providing an
Thank you for providing an articulate and detailed reaponse to the air BnB problem.
Perfect example, half a
Perfect example, half a brownstone that was purchased and ostensibly renovated into college rentals as a ruse that was actually Airbnb hotel with the owner paying no hotel taxes
Hopefully
They can enforce it, at least to some degree, but it's still a good ordinance either way. Obviously it's better if it can be enforced, but let's not let perfect be the enemy of the good.
Agreed
This won't be able to be enforced.. or it will only be if someone in the building calls if they suspect something going on. Is this any better. Not really. Just means the AirBNB land lord will get more crafty.
Kinda think the fees are scammy.
The ordinance will not
The ordinance will not eliminate it completely, but it will dissuade people who like to do their business legitimately, ultimately reducing the instances of it happening. Not everyone stops at a stop sign, but enough people do that the regulation is effective. In general, most people don't want to break the law.
WTF
Walsh just ran from one extreme to the other.
True!
He went from Wrong to Right. I'm OK with that.
Investor/Owner - Operator.
It appears there is a pretty big loop hole. An Operators may operate one unit for 365 days a year and have permission from owner. So you just need to line up a bunch of "operators" and you can still have a bunch of units as AirBnB.
The key here is "primary
The key here is "primary residence" which the city already keeps tabs on via the residential exemption.
Operators must be property owners and not even LLCs
It's in the definitions section: "Operator. A natural person who is the owner of the Residential Unit that he or she seeks to offer as a Short-Term Rental. Only one owner may be registered as an Operator on the Short-Term Rental Registry for a Residential Unit, and it shall be unlawful for any other person, even if that person is an owner and meets the qualifications of Primary Resident, to offer a Residential Unit for Short-Term Residential Rental."
Great work, Michelle!
Thank you for leading the way on this. AirBNB has gone from a way to make a little extra money to a full on underground hospitality business. Absentee owners and LLCs should have to follow local ordinances if they are going to operate their own inns. Hopefully some will consider actually leasing to tenants to help with our housing crunch.
Great work, Michelle!
Thank you for leading the way on this. AirBNB has gone from a way to make a little extra money to a full on underground hospitality business. Absentee owners and LLCs should have to follow local ordinances if they are going to operate their own inns. Hopefully some will consider actually leasing to tenants to help with our housing crunch.
Hey Michelle
You don't represent my interests. I look forward to voting against you again.
You can't please all the
You can't please all the people all the time.
Yeah
But you gotta please all of the people some of the time.
Hey Michelle, introduce a resolution to end the Boston Licensing Board, and I'll vote for you. No joke.
Yeah
I'm sure Michelle will be able to go on without your vote.
Really, politicians only have
Really, politicians only have to please some (a plurality) of the people some of the time (election time).
No politician can please all of the people for even one day. Governor Baker is the most popular governor in the nation, but even he can't break beyond 70% in favor of him in polls.
Hey Michelle
You totally represent my interests, and I look forward to voting for you next time around, specifically because of the principled stand you’re taking on this issue. You may get not be a regular around these parts, so don’t worry too much about old Will here... you’re not getting his vote unless you’re planning to pass out pistols and gold bullion at trivia night.
Fully agree
Fully agree
I laughed
You wanted that to be insulting to me, but it isn't.
Thanks, Michelle.
AirBNB is out of control.
Astroturf BnB
So much for their big "push" on local politicians.
Am I the only one getting solicitations through their app to rent out my house during marathon, graduation season, or just during the summer weekends?
I think this is very
I think this is very reasonable. Props to Wu and Walsh.
Whoever AirBNB hired to
Whoever AirBNB hired to handle government relations on this should be fired and never hired again in this city. Their strategy to attack Walsh and councilors blew up in their face badly here. Wow.
I’m not sure...
.... I’ll ever use AirBNB again.
I’m struggling to put into words
just how badly they screwed the pooch here. It’s lile 3 parts Streisand Effect, one part class warfare. You could teach a PR seminar based entirely on the last two weeks as a screeching example of what not to do when your business model is threatened by municipal regulation.
Same Strategy
I saw that AirBnB is using the same aggressive strategy in NYC. I can only hope that is backfires on them there too.
For sure
I was booking a rental for an overseas trip and the past week swayed me entirely away from AirBNB and back to VRBO/Homeaway. Not that some of these issues aren't the same on those platforms, but they're not actively fighting reasonable regulation from what I can tell.
This is happening to me
This is happening to me realtors from Lexington are buying up units in my building in boston and renting via Airbnb. These units are affordable and should not be rented but they don't care and no one regulates it.
So report it
Probably no one on the government knows it is happening. And if those are deed restricted afforidible units, call DND and report them. File with 311.
Holy crap
I'm very pleasantly surprised with this proposal.
If this goes through, Marty Walsh will be my hero.
LOL. The communities are not
LOL. The communities are not going to see a dime of this money.
The money is not for the
The money is not for the community, it is to fund the enforcement of the regulations, as said above.
Regulations that didn't exist
Until government invented them. Why should the community have to pay for the city to invent a job for somebody?
Because the community has
Because the community has been asking their elected representative aka the government to do something about the unregulated hotels that have been destroying their neighborhoods and draining housing stock. It's literally what happens in civil society with a functioning government.
$25 a year sounds reasonable enough
Now if we could only get the City to process the licenses for less than $25 we'll be getting somewhere.
The City of Boston is a joke
The City can not even enforce vehicles with out of state plates from parking in areas that are posted for resident parking.
Have you tried 311?
Have you tried 311?
#doyourjob
If the BTD was doing their job 311 would go the way of the pay phone. From the amount of "illegal parking" complaints on 311 BTD is not doing their job or the citizens of the City are beating them to the vehicles.
#waaaaaaaaaaaa
The city is a community of people. Contribute or whine, your choice.
311
The app for rats. Rat out your neighbor instead of being a man and talking to them. Boston is a city of passive aggressive rats.
I suppose it would be too much to ask
to ban investor-owned units of all kinds?
[ducks behind couch]
Walsh proposal Sounds
Walsh proposal Sounds reasonable. As an Airbnb user the income i generate via rentals (all recorded by airbnb via 1099 btw) allows me to do updates to my unit that i would not be able to afford. So as a small landlord it has helped. I also think it has been a boon also for run down properties in frindge neighborhoods that until recently have been ignored by investors/ home seekers.
In Europe these type if rentals are called “pensiones” or something similar. There is an obvious need for them. I also believe many more people are able to travel to places they would not have before due to the cost of hotel stays. So these people who visit are spending money in local and downtown restaurants, taxis, shopping.