I listed my first home as a Short Term Rental in Baltimore in 2005. My ads were placed on VRBO.com, Craigslist and my own website.

I was one of the first three properties to list on VRBO.com for Baltimore in 2006. AirBnB wasn't even a thought in anyone's mind at that time.

From 2006 through 2014, the Baltimore Short Term Rental marketplace grew in a relatively healthy manner. Supply and Demand kept things in check. Those operating full home rentals in a manner that was extremely problematic for neighbors were dealt with by the neighbors without the need for legislation. Those offerring in home room rentals via AirBnB were seldom talked about by the full home rental folks as both offerred dramtically different services and neither were significant enough to put any dent in the hotel business. As of 2015, there were only about 30 full home rentals on the market in downtown baltimore that had 3 or more bedrooms. The short term rental business was complex and tricky, and those seeking to rent were advanced travellers. It was a healthy and mature marketplace.

Around 2015. AirBnB, a company started in 2008 to dominate the room rental space in occupied homes started to adversely affect the full home rental market. Individuals willing to move out of their homes for quick cash were putting full homes on the market at pricing below that which someone running a full time short term rental could compete with. No one in the full time full home rental business would have thought to use AirBnB as the reservation process provided no logical contractual protections to the home owner. AirBnB's entrance into the full home rental market, funded by hundred's of millions of dollars in venture capital money was a true "global market problem" that went unchecked for too long.

As a result of AirBnB's rise and desire to monopolize, with the ear of younger travelers and entrepreneurs, Individuals started to go into "business" educating others on how to make "fast money" via AirBnb on youtube and via websites like "Bigger Pockets". Worse yet, founders of things like Expedia.com and Bookings.com realized 1) the short term rental market had the potential to do damage to their online travel booking duopoly and 2) the short term rental market was attractive for monopolization like they had done with the other online booking industries.

One GIGANTIC, GALACTIC size battle for land, rental properties, online presence and control of seasoned property owners ensued off the radar of many and in fact that battle is still raging on today, although many of the seasoned owners have moved on, leaving only a few left for the closing rounds.

A deep dive into the market competition in Baltimore and other areas 2018 or so showed some seriously disturbing trends. Massive Institutional investors like Hilton were seemingly spotted behind smaller investment groups. Smaller investment groups were promising massive returns to investors in illogical ways that can only be explained via Ponzi and/or Money Laundering. Several local investors had committed mortgage fraud with VA Loans and Second Home Loans to get into business, and more. It had become a whores market for sure.

I was forced to sell a property I had intended to hold onto for life. I have one property left in the Short Term Rental business and I'm not sure how long it'll remain. I've wanted to exit with the other seasoned landlords for years now. However, a pendulum I trust dearly with the Buddha dangling from it has continued to say I'm to stay, and thus I am still here.

With that, I've decided something. If I'm going to be forced to stay because the Dangling Budha says so, I'm going to play in a way that makes the others re-check their pendulums too. Over and over again until either I win, or we all say it's time play in a different way!

Welcome to my "latest website" on short term rentals.

If you didn't know about the others, you have no clue what you are missing and most of that will NOT be repeated here. However, there should be more than enough here to peak your interest and hopefully it will get some things in Baltimore "back on tracks" in Baltimore.

In Fall of 2017 Expedia purchased VRBO/HomeAway. In the preceeding decade home away had bought out dozens if not hundreds of smaller listing websites leaving them as the primary controller in the global industry for vacation rental listings. At the time of purchase,HomeAway was an aadvertising platform with optional bookking services. that meant they got annual advertising fees from homeowners not pieces of every booking unless you used their optional booking service which was not mandatory and not used by most small business people.

In winter of 2017 and the spring of 2018 there was a flood of new home buyers converting quickly to vacation rentals the downtown Baltimore Marketplace. It was as if they knew something the rest of us seasoned owners did not. In the Summer of 2018 Expedia converted the entire global rental marketplace they controlled into their own, by forcing all on the platform to book all bookings through the platform for a 9-12% booking fee. It was a major coup pulled on over 1 MILLION small property owners world wide.

It became apparent quickly the goal was to align the new VRBO/Homeaway revenue model and the booking process with AirBnB's process. It also became apparent the end goal was to pigoen hole landlords into signing up for the "book it now" program such that the listing inventory could then roll out to Expedia ( a company with ties to European Royalty) and Bookings.com (a Dutch company). No one seemed to care that most property owners actually preferred to screen their guests before accepting a booking. That was irrelevant to these "big thinking" corporatists with arguably quite tiny minds.

During this race to control the markets both horizontally and vertically, all kinds of funny money manipulation games seemed to have sprang up as well, as mentioned previously.

The result of this Gold Rush in Baltimore was an upheveal of voices. There were both healthy and strange pushes from in and/or or around City Hall to regulate the short term rental industry. The strangest voice in the bunch was the organizer of the Baltimore Hosts Coalition who claimed she was speaking on behalf of all short term rental owners when she said we were okay with Lodging Tax being imposed on all of us. (?)

Who organizes a group of small business owners without notifying us of organization and then speaks on our behalf as it relates to an illogical lodging tax that shouldn't apply for numerous reasons? How about someone with deep political ties and a mysterious home purchase or a few with money with seemingly no backstory. But I'm getting off track a bit fast...

The long and short of this is a battle ensued over legislation to control the odd and illogical growth of the Baltimore Short Term Rental industry and in the end, some fairly draconian rules passed, with a bit of logic mixed in.

In the next section we'll provide a summary of those rules and links to documentation. In the following we'll highlight folks who aren't complying and that's where this first publishing will end, with an understanding that there may be much more to come!

In late 2018 Baltimore passed tentative codes limiting the rental of full homes in Baltimore. The codes were finalized in mid 2019 with an affected date of 1/1/2020. The new code can be found at Article 15, Section 48-7 :

• https://dhcd.baltimorecity.gov/sites/default/files/Art%2015%20-%20Licensing_0.pdf

• NOTE: there is an editors note at the end of 48-7 that outlines the grandfather clause for full home rental owners

Summary

• The codes affected both Full Home rentals and Room Rentals in an Occupied home

• The codes went into affect 1/1/2020

• There was a grandfather clause that applied to full home rentals with a trigger date of 12/31/2018.

Execution Date Update

• Due to licensing compliance complexity and a new licensing responsibility that was tossed like a hot potato between the Housing and Finance Offices in Baltimore, the deadline for obtaining a license for those who qualified was extended to 3/31/2020

• HOWEVER, the codes themselves were still valid as of 1/1/2020.

• Translation >> Anyone who did not meet the licensing requirements should have ceased commercial operations as of 1/1/2020

• Translation >> Anyone who operated after 1/1/2020 who was not qualified for operation was in fact violating city code while engaged in commerce competitively with others.

Ramifications for at least 5 Property Owners

As you will in the next major section

• We will spotlight 3 single family homes within 1/4 of my home which continued to operate into 2020 when they clearly should have ceased on 12/31/2019.

• We will spotlight a commercial property management company who seems to have had one or several properties which they continued to operate in violation of city ordinance.

• We will spotlight a single family home that seems to have "cheated" with a singular review qualify for the grandfather clause that was designed to exclude them.

BUT, before we get into these reviews, you will need a better understanding of the new rules.

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Full Home Rental Details

1. You can only own and rent a full home in Baltimore IF 1) you are currently living in a Baltiomore City property as your primary residence AND renting a room in that home you occupy AND you own a second home in your name (not an LLC) which you are renting full time..

   1. 1. The result of this clever, slightly tricky, and arguably draconian legislation is that anyone renting a full home in Baltimore is a) a Baltimore resident and b) they are not overtly partnered with any other people on a full home rental from a title/ownership perspective

      2. GRANDFATHERING EXCEPTION - If you were in the short term rental business as of 12/31/2018 and you had at least one qualified rental in that short term rental as of 12/31/2018, you could maintain control of the home as a rental business without having to live in Baltimore as a primary residence with a room rental to boot.

2. All bookings run through the major Internet Platforms are subject to the Baltimore Lodging tax of approximately 15.5%.

   1. 1. 6% of that is a state sales tax

      2. 9.5% of that is a city tax

         1. 60% of this tax goes to the city

         2. 40% of this tax goes to a private organization that promotes baltimore (<< WTH is that? GREAT question. Would they have had a financial desire to push for regulations to get the short term rentals taxed? if so, could they have paid lobbyists or others to promote the tax position? )

3. The property needs to be inspected by a home inspector in a manner that aligns with traditional rental property requirements

4. The property does NOT need to be inspected by a lead inspector (this part was confusing)

5. The property needs to be registered as a traditional rental property in Baltimore, with the lead inspection exclusion

6. The property needs to be registered as a short term rental

7. The property owner needs to have a Tax Payer ID (even though all relevant transactions subject to tax are platform transactions where the platform controllers are collecting and remitting tax).

8. Taxes need to be collected on all Online Platform Bookings and remitted to the State of Maryland Controller (which is out of the control of the property owners).

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Partial Home Rental Details

1. These don't apply to me. Read the specifications yourself if interested.

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AirBnB was contacted in December 2019 and January 2020 regarding their website back end. They are supposed to have a field for data entry of a license number so it can be displayed in the ads where required. They have insructions for such a field in the Canadian website and those were the instructions provided.

When informed the same field did not exist for US Customers, they implied it wasn't currently required. As if they didn't give a shit if Baltimore City wanted it... they weren't going to provide it -- for some reason...

Why on earth wouldn't AirBnB help a city manage their short term rental market concerns??

Maybe it has to do with knowledge related to inappropriate or illegal activities?

Maybe it has to do with a goal of going public in 2020?

Time will tell...