Article courtesy of The Denver Post
Tenants at 20 apartment complexes across Denver are now sharing their amenities with out-of-town guests, as building management is allowing residents to rent out their units as Airbnbs.
Vacation rental company Airbnb has partnered with building owners in almost 40 cities “to make it easier for renters to find apartments that let them host part-time,” according to its website. Renters can earn money by hosting Airbnb guests in their units, with the frequency and guest rules varying by building and locality.
At a time when apartment rent in Denver averages $1,997, Airbnb estimates that a host can earn an average of $786 for a weeklong rental in the city. Out of the metro area’s current options available on Airbnb, the starting monthly rent ranks as low as $1,209 in Glendale, with average weekly earnings of $568, and as high as $2,993 in Denver, with that profit jumping to $749.
The following apartment complexes in the Denver area are listed as Airbnb-friendly apartments, as of March 22:
Eviva on Cherokee at 1250 Cherokee St. in Denver
Skyhouse Denver at 1776 Broadway in Denver
Radius Uptown at 1935 Logan St. in Denver
Uptown Square Apartment Homes at 1950 Pennsylvania St. in Denver
Solera at 1956 Lawrence St. in Denver
The Fitzgerald at 1840 Market St. in Denver
Sentral Union Station at 1777 Wewatta St. in Denver
Mason At Alameda Station at 275 S. Cherokee St. in Denver
Steele Creek at 3222 E. First Ave. in Denver
Theo at 985 Albion St. in Denver
Milo at 4109 E. 10th Ave. in Denver
The Overland at 2065 S. Cherokee St. in Denver
The Town Center Collection at 3131 Roslyn Way in Denver
Avia Lowry at 9649 E. Fifth Ave. in Denver
The Aster Conservatory Green at 9095 E. 47th Ave. in Denver
Circa Fitzsimons at 11700 E. 26th Ave. in Denver
4550 Cherry Creek at 4550 E. Cherry Creek Drive S. in Glendale
Esprit Cherry Creek at 5001 E. Mississippi Ave. in Glendale
Waterfront at 10555 W. Jewel Ave. in Lakewood
7166 At Belmar at 7166 W. Custer Ave. in Lakewood
One tenant at Eviva on Cherokee worries that he and others will eventually be priced out of their units as a result. Rent has already jumped every year that 34-year-old Matt Watkajtys has resided at the luxury apartment complex in Denver’s Golden Triangle, he said last week.
If a building can make more money by directly leasing on Airbnb, “they don’t have any incentive at that point to ever lower rent, because this is a desirable area,” Watkajtys said in a phone call. “If they can just turn into a de facto hotel, why deal with tenants?”
When he originally secured his unit, short-term rentals were “explicitly not allowed in the lease” unless management’s consent was received, he said. But then Watkajtys started hearing whispers late last year about the building’s new Airbnb-friendly apartment status.
When the policy first rolled out, “for a time, a person – if they wanted to book a room – would need to go through leasing, which, I mean, that’s essentially running a hotel at that point,” he said.
Watkajtys sees the merits of the idea for tenants who often leave town for work. “That’s fair,” he said. But “when the building does it in an official capacity, that feels wrong.”
So far, Airbnb guest behavior hasn’t caused any problems. “It hasn’t turned into a frat house, which I think was people’s initial concern.”
But if the broader apartment industry jumps on this trend, Watkajtys worries that “everyone’s gonna get priced out.”
If his rent creeps upward at all in September, “it’s not gonna be tenable. I’m gonna have to move.”
Despite the fact that multiple property management companies seem to be embracing Airbnb rentals, no one is willing to talk about it.
Real estate investment trust company Equity Residential manages Eviva on Cherokee and another five of the Denver area’s Airbnb-friendly apartment buildings. Spokesperson Marty McKenna didn’t respond to requests for comment.
Greystar oversees seven of the listed apartment buildings. Spokesperson Zain Abouseido declined to comment.
Highmark Residential manages three of them. West Region administrative assistant Grace Aguirre directed questions to private investment firm Starwood Capital Group, whose spokesperson Tom Johnson declined to comment.
Lights hang off balconies at Eviva on Cherokee apartments in Denver on Friday, March 24, 2023. In 20 complexes across the city, residents are allowed to rent out their spaces to Airbnb guests. (Photo by Rebecca Slezak/Special to The Denver Post)
Lights hang off balconies at Eviva on Cherokee apartments in Denver on Friday, March 24, 2023. In 20 complexes across the metro area, residents are allowed to rent out their spaces to Airbnb guests. (Photo by Rebecca Slezak/Special to The Denver Post)
“This is really a need”
Airbnb kicked off its Airbnb-friendly marketplace in November 2022 with 175 buildings across 29 U.S. areas – and the program continues to expand every week, said Jesse Stein, global head of real estate at Airbnb.
He pointed to 45 million rentals across the country, “and the overwhelming majority currently do not let their residents host.”
“This is really a need,” Stein said Friday. “It’s a shaky economic time, and the cost of rent is through the roof.”
He highlighted an “extremely strong” number of consumers who want to move into apartments and host on Airbnb. The program, which has been in the works for a couple of years, is receiving feedback from consumers and the real estate industry that “has blown away our expectations,” Stein added.
Recently, he’s held calls with several Denver-based property groups as the company plans to grow with more localized, regional managers after launching with larger players in the industry.
To concerned renters, Stein said, “We have not seen any of our apartments across the board increase their rent because of the program.”
“Residents are actually staying there longer because they are allowed to host and create incremental income for themselves,” he added. Last year, their hosts earned an average of $14,000, Stein said.
Denver requires hosts to obtain a short-term rental license if the property is leased for one to 29 days at one time. When that length of time extends to 30 days or more, then the host must apply for a residential rental property license instead.
One unit at Radius Uptown and another at Solera have started the application process for a short-term rental license, but not submitted them yet, according to data provided last week by the Department of Excise and Licenses.
Two units at Sentral Union Station hold short-term rental licenses, with another one pending. But that’s the extent of short-term licenses obtained across the 16 Airbnb-friendly apartment complexes within Denver proper.
“I think this is a case where just because these units are listed an Airbnb partner does not necessarily guarantee that there are renters who are using their home as a shorter-term rental,” said Excise and Licenses spokesperson Eric Escudero.
The mandate for Denver’s residential rental licenses for multi-unit properties went into effect almost three months ago. Out of the 16 Airbnb-friendly complexes within city limits, 12 are confirmed for holding residential rental licenses.
Solera and The Town Center Collection’s licenses are pending. Steele Creek has started the application process but has not yet submitted it.
Only Circa Fitzsimons is listed as lacking a residential rental license, as of March 22.
The exterior of Eviva on Cherokee apartments in Denver is pictured on Friday, March 24, 2023. In 20 complexes across the city, residents are allowed to rent out their spaces to Airbnb guests. (Photo by Rebecca Slezak/Special to The Denver Post)
The exterior of Eviva on Cherokee apartments in Denver is pictured on Friday, March 24, 2023. In 20 complexes across the metro area, residents are allowed to rent out their spaces to Airbnb guests. (Photo by Rebecca Slezak/Special to The Denver Post)
“A good thing for consumers”
The Apartment Association of Metro Denver’s Drew Hamrick called the Airbnb-friendly policy at apartment buildings “very rare.”
“We’ve got 1,930 rental communities,” so the 20 involved complexes make up “roughly 1% of the market, if you define it by communities,” he said in a phone call.
This move mainly impacts the apartment market’s high-end because “people are renting these things for the purpose of vacationing,” Hamrick said.
He outlined two types of transactions that occur with these units used as short-term rentals. About 70% of the time, the apartment resident renting from the housing provider puts their unit on Airbnb after receiving permission from their landlord.
“For years, the industry was just totally opposed to the concept” because of the potential risks, Hamrick said.
But if it’s the tenant’s place of residence, “then there really is no reason not to give the resident as much flexibility as any homeowner would have to supplement their income by using it as a vacation rental.”
The other 30% of the time, the short-term rentals are offered by the housing provider when it’s trying to manage vacancies during offseasons or at new developments.
“That is very niche because you have to have a pretty sophisticated understanding of your inventory to engage in this without stepping all over yourself,” Hamrick said.
“(The) long-term goal of a rental housing provider is to get someone in there on a long-term basis.”
Vacancy rates in the Denver area are at around 5.7%, Hamrick said. They’ve been jumping up, “which is a good thing for consumers” because that means less pressure to boost rent prices.
But he doesn’t think the Airbnb-friendly policy is bad for consumers or housing prices. Hamrick compared it to ride-sharing. “It is truly allowing more bodies to occupy the same number of units, which is good.”
Without the policy, tourists would still flock to Denver, and snowbirds – residents, often retirees, who move to warmer climes for the winter months – would still leave, but “more of these housing units would be sitting empty.”
“Anything we can do to help people live and stay where they want to helps the free market work better,” he said.
