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Cover Story: Airbnb, meet the Georgia General Assembly

Gold Dome study committee to examine short-term rentals in the state

The first place Peter Bahouth takes guests when they arrive at his treehouse (pictured above) is to visit what the artist calls "the Old Man." Located just down a hill from his Buckhead glass home, the 165-year-old southern shortleaf pine is one of seven trees that help support the elevated refuge that has been a quiet getaway for countless couples over the past year.

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To access the treehouse, visitors climb a set of stairs, cross a bouncy wooden bridge, and pass through one of three linked structures with a bed on a platform that extends into the forest. Visitors then cross another bouncy bridge to the Old Man's trunk and the view moves skyward where the tree's branches extend and lord over all other greenery, swaying gently.

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Bahouth built the treehouse, which has appeared on dozens of blogs and an episode of Animal Planet's "Treehouse Masters," 14 years ago after he moved to Atlanta to lead the Turner Foundation. The Syracuse native and former Greenpeace USA executive director bought the lot adjacent to his home to preserve the land and his home's privacy. He spent six months finding reclaimed materials — some of the windows are old restaurant doors and 80-year-old glass from a Masonic temple — to build the house. It reminds him of the simple treehouse he had during his childhood.

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"I'd sit in there and say, 'I know what sovereignty means,'" Bahouth says with a chuckle as his dog Daisy and cat Haskell keep watch. "'This is my place.'"

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The tree is one of the reasons why Bahouth's getaway, invisible from the residential street and restricted to two guests per stay, is a place that has attracted visitors, mostly from metro Atlanta, looking for an overnight experience they can't find anywhere else.

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"It's quiet, it's intimate," he says. "It's not cookie-cutter."

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Talk to Bahouth — or read the testimonies and messages visitors write in the guestbook resting on a coffee table in the treehouse — and you'll see that people aren't paying around $300 a night to sleep in the woods because Downtown hotels are booked. They come for the experience of, well, sleeping in the woods. A large percentage of the people who sign their names and reasons for coming are from metro Atlanta: Many people have proposed in the treehouse. One wife brought her Iraq War veteran husband here after his third tour. Others come to Atlanta to stay in the treehouse.

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Bahouth is offering something that hotel chains can't: an authentic experience outside of the standard banal artwork over the bed and remote control super-glued to the nightstand. Airbnb, the platform he occasionally uses to rent the treehouse, is one of several companies, dubbed short-term rental providers, that allow people to rent out couches, rooms, entire houses, boats, and even vans to travelers. The rentals create extra money to help pay mortgages, fund travel, or pursue creative interests. It's allowed Bahouth to dedicate his time to 3-D photography and help his wife prepare to open a bookstore on the Westside.

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For years, Georgia governments have been hands off when it came to short-term rental websites. The rules could be about to change. Last year, Georgia lawmakers slapped regulations on ride-share companies such as Uber and Lyft. Airbnb, a Silicon Valley darling valued at more than $25 billion, escaped scrutiny. But the state's hotel and motel lobby is pushing for increased regulations on the online businesses that are sluicing away small streams of their revenue. Starting next month, state lawmakers will begin a series of meetings aimed at studying the industry, a process that could result in legislation regulating Airbnb and other websites that have made non-traditional travelling easier than ever.

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Should elected officials venture down that road, they would be entering the increasingly complicated world of disruptive companies and trying to regulate a many-headed hydra. Doing so could upend a practice that includes Augusta homes rented out during the Masters and millennials' couches along the Eastside Trail and which has irked hospitality executives, condo associations, and neighbors in Atlanta. If the hotel industry has its way, the Airbnb listing that has provided hosts with extra cash and connected tourists to Atlanta's vibrant neighborhoods, might face some regulations. Or, at the most extreme, go back to being another unused room.

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When Airbnb expanded to Atlanta from its home base in San Francisco, the platform landed not like a brick but a pin. No horror stories of travelers turning lofts into animal sacrifice altars — one NYC renter tried to host a "BBW Panty Raid Party" — have made headlines here. Searches of court cases filed against the company and other short-term rental providers in Fulton County and by Georgians in San Francisco Superior Court yielded no results.

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Airbnb isn't in the hotel business much like Uber or Lyft isn't in the taxi business. The website connects people with "hosts" who have a spare room, house, or other place a person can sleep. A basic search for Atlanta listings usually yields more than 1,000 results, ranging from private rooms in Downtown high-rises to renovated Virginia-Highland bungalows. Some listings have as many as 100 reviews singing the praises of hosts. And the service is growing. According to Airbnb, there are 1,837 active listings in Atlanta — a number that has grown 110 percent since 2014. Since that same year, the company has seen 150 percent more guests traveling to Atlanta and staying at Airbnb listings. Out-of-towners can spend the night in an uber modern home in Old Fourth Ward or an Adair Park hostel with "a Jacuzzi hot tub for relaxing naked in the private backyard with beers."

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But to hear it from the Georgia Hotel and Lodging Association, these online companies, which include Flipkey and HomeAway, get to enjoy all the financial success of hotels without all the regulatory baggage. Years of lobbying by the trade association, which enjoys a strong presence at the Gold Dome, and other hotels have resulted in lawmakers finally agreeing to create a committee to study short-term rentals.

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To Jim Sprouse, the executive director of the GHLA, the issue isn't about hotel chains trying to protect their business model or feeling sore over watching customers opt for often more affordable and memorable places to stay. To him and the American Hotel and Lodging Association, the national organization that has pushed lawmakers in more than 20 states to consider regulating short-term rentals, it's about fairness and guest safety. AHLA reps have said the industry is not looking to shut down the person who occasionally rents out his house during the Super Bowl, for instance. It is, however, concerned about people who rent out otherwise vacant properties or, in other cities, purchase large blocks of apartments to operate illegal hotels.

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"'Why am I going through all these processes when this person over here does not?'" says Sprouse, putting himself in the role of a hotel owner.

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In Georgia, hotels, motels, and bed-and-breakfasts must have business licenses, pay hotel and motel taxes to fund local projects such as the new Atlanta Falcons stadium, and undergo regular inspections.

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Airbnb stresses that hosts should learn all local rules and laws, including becoming familiar with zoning restrictions and condo or housing association bylaws that might prohibit short-term rentals. In some, but not all, cities, Airbnb will remit collected taxes to the appropriate authorities. Atlanta is not on the list, which is growing.

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"We are committed to working with local officials to help them understand how Airbnb benefits our community," Airbnb says on its website. "Where needed, we will continue to advocate for changes that will allow regular people to rent out their homes."

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Michael Owens, president of the Savannah Tourism Leadership Council, has heard similar concerns as Sprouse. Nearly two and a half years ago, owners and managers of licensed vacation rental homes in the coastal city asked Owens to help them create a "level playing field" against property owners offering flat-fee rental on Airbnb and other websites. The rub: These amateur hoteliers — in many cases unknowingly, Owens says — were not remitting hotel and motel taxes to the state.

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According to Owens, "some pretty quick research showed that 85 percent of our inventory in Savannah was noncompliant" with local requirements. In addition, the listings were increasingly popping up in the city's picturesque historic district, a residential neighborhood, and were causing parking and noise headaches.

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At the beginning of 2014, around the same time that Savannah officials began mailing cease-and-desist letters to more than 40 homeowners renting out their properties, Owens, public officials, lodging professionals, and residents started crafting Georgia's first ordinance to address the issue. After months of meetings, stakeholders agreed in October 2014 to add short-term rentals to the zoning code. Airbnb hosts and other short-term rental providers are now required to obtain a $150 license, follow basic safety guidelines including smoke alarms and fire extinguishers, and remit hotel and motel taxes to the state each month. Violating the ordinance — for example, police discovering more people are staying in the unit than allowed — could run in the hundreds of dollars.

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The ordinance took effect Jan. 1 and isn't perfect, Owens and other Savannah officials say. But according to Bridget Lidy, the city's director of tourism management and ambassadorship, it balanced a growing trend in travel, quality of life, and fairness. In the first 90 days, the city approved 196 applications from people interested in renting out their property, generating more than $38,000 in revenue. Only four complaints related to the approved rentals were reported.

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"There is always going to be issues of someone who's compliant or isn't," Owens says. "Or someone who decides to get in the short-term rental business tomorrow and hasn't read the paper in the last few years."

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The level of complaints that caused Savannah to act on Airbnb has not been matched in Atlanta. AHLA officials' grassroots online campaign to build opposition to the company has not found momentum here. City officials have not followed the lead of Barcelona, where a boom in tourism is enticing property owners to convert units that could serve as residences to vacation rentals, reducing the amount of affordable housing. That's partly due to the fact that Savannah is a travel destination, where people visit for the history, beach, and culture. Barcelona is a much larger city, an international draw, and reeling from a laggard national economy. As much as Atlanta prides itself on being a tourism town, it's really more of a convention city.

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Major hotel chains are not feverishly biting their fingernails over the rise of the company here. Atlanta hotels last year reported record occupancy numbers and are pitching new locations to meet growing demand. Sprouse says it's smaller chains that cater to leisure travelers and millennials — a new generation of travelers who could get used to booking all future overnight rooms on the app — that are feeling the effects of Airbnb's spectacular growth.

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"It's all about market segment," he says. "If you're looking at it and thinking short-term rental property is impacting a convention hotel, it's not happening. If you're looking more at economy brands or lower to mid-scale, it's starting to be a competitor. And the concern is it becomes even more of a competitor."

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Debi Starnes, co-owner of Sugar Magnolia, an Inman Park bed-and-breakfast, can quickly rattle off a long list of what she has to do to stay on the up and up in the eyes of tax collectors and health inspectors. Starnes says it is hard to gauge whether the short-term rental websites have had any impact on her business. But she does think that the platforms have an advantage.

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"They definitely should have to charge the same taxes," says Starnes, who admits with a laugh that she occasionally "consorts with the enemy" and uses Airbnb when traveling. "The second question is whether they should live under all the same regulations — or should those regulations be reviewed?"

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Atlanta has no specific laws or regulations on the books dealing with short-term rentals. Neither has the city felt a reason to examine the prevalence of short-term rentals in the city.

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Jewanna Gaither, a spokeswoman for Mayor Kasim Reed, says city zoning officials two to three years ago "had inquiries about individual incidents of Airbnb activity. Legally, these rentals are currently treated as hotels, which are not allowed in single family zoning districts."

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Another group that has some concerns about short-term rentals are condo associations, especially those located in Downtown and Midtown buildings near sports and music venues.

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"It's geographic-based," says David Hill of Access Management, a property management firm. "There's one client in particular in Downtown near the stadium, where everything is, where people want to come in for a music event at night and use Airbnb to have a quick crash pad. They'll do Airbnb for $200, bring six buddies with them, go to the concert, and then take off the next day."

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Not all the units found online involve the owner bunking somewhere else for the night. During the economic crash, some investors scooped up foreclosed units in condo high-rises and put them up for short-term rental. What sounds like a good business opportunity turned into a potential liability for residents and the building. Some condo associations impose a 25 percent cap on rental units in the building to ensure residents are invested in building the community, as well as to appease insurers and federal lenders.

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"I rarely find communities that are outright angry about Airbnb," Hill says. "It's the peripheral issues that come with it. Insurance companies will refuse to provide coverage to the association if you have short-term rentals. It's the same thing with lending. The U.S. Department of Housing and Urban Development and the Federal Housing Administration have strict guidelines on having short-term leases. That endangers chances for buyers to get lending."

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The issue has become so prevalent for some high-rises that some condo associations have tasked property managers to monitor Airbnb and other listings platforms. If a condo in the building is spotted on the services, the owner of the residence is contacted and reminded of the bylaws. If they rent out the space, they can face a fine that varies depending on the association's bylaws. Or the association could file a lawsuit.

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Jennifer Brooks moved into in a high-rise overlooking Centennial Olympic Park in 2009 to downsize after her children graduated high school. When she moved in, there were a lot of foreclosed units, which over time have been purchased and occupied by "really fun people." Her high-rise has a cap on the number of rentals allowed at one time; anyone who's thinking today about renting out their unit should be prepared to wait three to four years, Brooks says. Occasionally she will notice someone who lists a unit on one of the short-term rental platforms. Her building hasn't had to go the legal route yet, but they've gently reminded one owner who advertises his unit of the rules. To her and other residents, they're protecting their investment.

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"Condos are a community all stacked up," Brooks says. "It's not a business, it's a home. We expect neighbors to participate."

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Darin Givens, who lives at the historic Healey building in Fairlie-Poplar, says investors renting out units stymies efforts to create a more tight-knit community and bring more full-time residents to Downtown. His building's condo association caught a few owners listing units on the platform a few months ago.

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"The owners of units who live elsewhere — sometimes even in other states — and rent out the units on Airbnb are preventing people from living permanently in the precious little non-student housing stock we have Downtown," he says.

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But outnumbering the stories about headaches are the anecdotes about the positive role that Airbnb has played in many hosts' and guests' lives and travel experiences. Atlanta-specific data is not available, but Airbnb says 74 percent of its listings are outside cities' main hotel districts. Nine out of 10 guests want to "live like a local," the company says. And nearly half of visitors' spending is in the neighborhoods where they book. The company also says that it's helping people make ends meet. Approximately half of the company's hosts say they are living on low- to moderate-incomes, Airbnb bookings help them afford to stay in their homes, and the cash generated from renting out rooms and houses helps them pay for groceries and cover rent.

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Bahouth says, and his guestbook confirms, that the treehouse has been a getaway. He says his neighbors have not complained about the travelers visiting the guesthouse, which he only rents out when he's home. Visitors park in the driveway, not on the street. It's so peaceful that Bahouth's one recommendation to visitors, aside from pointing them to nearby restaurants, is not to leave and simply enjoy the quiet. They take him up on it. And he benefits. Thanks to Airbnb, Bahouth can focus his energy on his photography and other projects.

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André Golubic, a realtor in Kirkwood, purchased a six-bedroom, three-and-a-half bathroom historic mansion in 2002 with his then-wife. When the two separated, he faced the prospect of maintaining the Queen Anne-style home on one income. He looked into Airbnb after a young friend told him about the website.

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"My concern was in becoming 'the weird single guy living in a mansion by himself,'" he says. "Were it not for things like Airbnb, I would simply not be able to cope with the overhead and maintenance.  Not only has this opportunity enabled the maintenance, but I have actually been consistently making improvements to it and, further, I am able to do more of my favorite pastime — travel — as a result."

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It's also helping Golubic contribute to the community. He says he's donated $1,000 in the past year to the neighborhood association and Kirkwood's small businesses benefit when large groups rent the house. When it's not full, he gets to enjoy living in it with his two sons.

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Golubic acknowledges that his house could potentially attract guests who might have opted for a Downtown hotel. But he says he is providing a service that the free market has not been able to effectively: "an intown Atlanta space capable of providing medium to large groups of travelers with a comfortable historic dwelling with a residential and time-gone-era feel."

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Across the country, most regulations imposed on Airbnb have come from municipalities. In October 2014, San Francisco City Supervisors passed a law allowing the practice over the protests of housing advocates and U.S. Senator Dianne Feinstein, a former mayor. Three months earlier, the Portland City Council OK'd an ordinance to legalize short-term rentals in homes, provided the host pay a $180 permit fee, undergo home inspections, and pay 12.5 percent city hotel taxes. Even tiny cities and counties have pushed for regulations.

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Gaither, Reed's spokeswoman, says the city "currently has no legislation aimed at addressing Airbnb or similar types of uses at this time."

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Sprouse, however, wants the state to consider a policy that would cover all 159 counties and more than 500 cities, rather than watch Georgia turn into a patchwork of rules and exemptions when it comes to short-term rentals.

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"If you deal with it community by community, it's going to be very complex," he says.

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Gold Dome study committees can be created for any issue and can span the spectrum from serious policymaking to showboating. Most committees are required to release a report at the end of their lifespans, just before the General Assembly convenes for its 40-day session in January, documenting their findings and, if warranted, recommending legislation to address the issue they discussed.

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What legislation the state could introduce regarding Airbnb, and its chances of passage, is up for debate. Georgia law fiercely protects private property owners' rights and allows them to earn income on their real estate. How GOP lawmakers decide to thread the needle on regulating those rights — while also appearing to stand up for the landed gentry — could make for entertaining theater.

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Any measure would also likely be met with pushback from users and hosts on par with what state reps and senators faced from Uber and Lyft drivers and passengers when the Legislature mulled regulating the ride-share services. Back then, some lawmakers bullish on new technologies and sympathetic to the company's libertarian streak also joined the chorus of dissenters — and could do so again if measures are aimed at punishing technology companies such as Airbnb.

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"Companies like Airbnb allow people to provide for their families in a way they could not before, and our laws should adapt to accommodate these companies, not the other way around," says state Rep. Buzz Brockway, R-Lawrenceville. "Our economy is being transformed by these new technologies. This is causing disruption but providing tremendous opportunity for people to live out their dreams. It's going to require new ways of thinking in government. Instead of thinking what is good for government, or the old guards in the industry being transformed, we need to remember these new approaches are improving lives. It's about people, and sometimes the status quo needs to change."

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House Speaker David Ralston, R-Blue Ridge, acknowledged in a statement that "technology is creating new industries and reshaping existing ones with an ever-quickening pace." But he is not showing his hand before lawmakers deliberate the issue, saying that he has "every confidence in the committee's ability and commitment to examine this issue thoroughly and thoughtfully."

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Starting in September, we'll find out how other local lawmakers will reckon with Airbnb and similar companies and the Georgians they serve.

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Atlanta’s coolest Airbnb rentals

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