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click to enlarge MONICA OBRADOVIC Signs dot the yards of people living off Kingshighway who are angry about neighboring short-term rentals.

The stranger brandishing a pistol on his doorstep was just one in a long line of problems Matt Biegacki encountered because of an Airbnb a few doors down.

The man arrived outside Biegacki’s Lafayette Square townhouse shortly after 1 a.m. Through his home’s surveillance video, Biegacki watched as the pajama-clad man left Biegacki’s stoop and walked toward the direction of an Airbnb two doors down where police had broken up a party of two dozen people an hour earlier. Neighbors had reported the noise three times, and Biegacki, as he recalls this story three years after it happened, feels the man showed up in retaliation for the snitching.

He’ll never know whether that’s the case. Biegacki doesn’t call police for help with nuisances brought by his Airbnb neighbor. The cops have better things to do, he says, and he doesn’t want to risk lowering nearby property values by having a documented nuisance on the block.

But “nuisance” may be putting it lightly. Biegacki says the Airbnb, which has been operated by two different out-of-town owners, has been the source of frequent noise, trash thrown in neighbors’ yards, large parties, drag racing and, at times, physical violence.

“This past weekend, we had guys beat the crap out of each other in the front yard,” Biegacki says.

On this block in Lafayette Square, the Airbnb blends in with all the other stately homes. If it wasn’t for the townhouse’s name displayed on the unit’s front door, there would be no sign that the unit was a short-term rental. But its presence is the scourge of an otherwise peaceful block, Biegacki says.

“Every weekend, there were parties, birthdays and other de facto public events,” Biegacki says.

Disturbances from the property came to a height during the pandemic. In a May 2020 “take down letter” to local government officials, five neighbors sent a detailed (but non-exhaustive) list of incidents at the property. The owners at the time, a couple in California who lived in St. Louis before they turned the townhouse into an Airbnb, sold the property a year later.

click to enlarge COURTESY PHOTO Matt Biegacki, left, and his family have experienced nuisances with a neighboring Airbnb unit under two different owners.

“He was managing the thing completely remotely, saying, ‘Yeah, I got this, I’m on top of it,'” Biegacki says. “But when I call at 1 a.m. because there’s a guy on my doorstep with a gun, he can’t do shit.”

There wasn’t much hope that things would change after the house went on the market. A local real-estate agent advertised the townhouse as a “revenue generating property” that included “all the furnishings if you would like to run this as an income-producing property like these owners do with Airbnb.”

The townhouse sold to a couple in Kentucky, who, Biegacki says, had originally promised it would be their residence. But the property was soon listed on Airbnb and neighbors say nuisances have continued.

“It’s a different owner, same story,” Biegacki says.

Carrie Hoelscher lives right next door and shares a wall with the Airbnb. She says things are generally fine, but she still woke up at 3:45 a.m. the other week to a loud noise and a woman screaming outside. Hoelscher saw a man lying on the street and another man in a car yelling while people milled about, going in and out of the Airbnb.

There’s also a bowling lane in the top-floor game room that Hoelscher frequently hears through her wall.

“This is a residential neighborhood,” Hoelscher says. “It would be nice to have someone actually live in the home instead of Air-bnb-ing it.”

Across St. Louis, neighbors to short-term rentals report similar issues. One group of residents became so frustrated they organized a coalition called Neighborhoods are for Neighbors and drafted their own ordinance to dampen the proliferation of home-sharing platforms within city limits.

St. Louis is one of the last major cities in the country to regulate short-term rentals, or properties rented for fewer than 30 days. But the city’s years-long effort to take its first steps to regulate such properties is coming to a head this month as the Board of Aldermen deliberates two companion bills that seek to corral an industry that’s otherwise grown undeterred in St. Louis.

Short-term rentals have come under intense scrutiny lately as critics blame the properties for nuisance behavior and criminal activity. In the past year, an intoxicated woman jumped from a third-story window of a short-term rental and broke both of her legs. Two teenagers were shot at after they were denied entrance into a party in the Visitation Park neighborhood. A man leaving a large engagement party outside a rental in Shaw was shot in the abdomen. An 18-year-old was shot in both legs at a large Airbnb party in the Skinker DeBaliviere neighborhood.

Downtown residents have also blamed short-term rentals for fights, shootings and large late-night parties.

This “wild west,” as many city officials have called it, may finally meet its match as aldermen are set to pass measures onto Mayor Tishaura Jones for final approval this Friday. After mulling regulations for years, aldermen hope this first attempt is the solution the city desperately needs to solve a growing problem.

St. Louis’ first attempt to regulate short-term rentals came five years ago. Then-Alderwoman Christine Ingrassia filed a bill that would have allowed the city’s building division to develop its own rules and regulations for short-term rentals — and the rentals would have to receive a permit. The bill didn’t go further than first readings. Neither did similar bills Ingrassia sponsored in 2020.

The city was already behind other area municipalities. Hazelwood, Chesterfield and Ladue had outright banned short-term rentals. In 2017, Webster Groves capped the number of guests a short-term rental can house to four. Maplewood started requiring short-term rental operators to receive business licenses and special use permits two years before that.

By 2020, there were an estimated 1,000 short-term rentals throughout the City of St. Louis. The number has since ballooned to 4,600, according to analytics site AirDNA (though city staffers say this number seems excessively high).

“We really need to bear down on these,” Ward 5 Alderman Joe Vollmer says. “Right now, out-of-town entities can come in and buy five or six properties and get very good money for these. They can destroy neighborhoods.”

“For a city of our size to have no regulations for short-term rentals is embarrassing,” Alderwoman Daniela Velázquez says.

Meanwhile, residents like Kaleena Menke bear the brunt.

Menke, 37, has lived in the same Forest Park Southeast apartment for the past eight years. She loves her apartment and says she doesn’t want to move. But her landlord hasn’t given her much of a choice.

Menke is the last long-term renter in her sixplex located just a half-block from the main drag of the Grove. During the pandemic, her landlord started turning vacant apartments into short-term rentals. While these rentals haven’t been much of a nuisance, Menke says, she feels she’s being squeezed out of her building so each unit could host shorter stays.

Her landlord has upped her rent and, she says, refuses to fulfill maintenance requests — which includes repairing a leaky roof and windows that have allowed mold to grow in her apartment.

“While the owners have enough time and money to gut-rehab and furnish five units, my maintenance requests to fix the leaking roof, broken and leaky windows, and inefficient and noisy HVAC are ignored,” Menke says.

Menke, an engineer and owner of her own consulting business, is looking to buy a house. But the local housing market is dire, she says. Finding something within her budget has been extremely difficult.

“I’m a first-time homebuyer, so my budget is pretty darn low,” Menke says. “I certainly can’t afford my neighborhood.”

And that, too, might be the fault of the short-term rental market. As investors sweep up properties and market them by the weekend, there are fewer homes for purchase for those who simply want to live in them. More crowded cities have cracked down on short-term rental sites not only because of the nuisance aspect, but because they say Airbnb’s economic model also worsens housing affordability problems.

As other cities accomplish what St. Louis has yet to do, the urgency to pass regulations is palpable at public meetings for the bills currently being debated, which are sponsored by Alderman Brett Narayan. And while there’s a consensus to do something, there hasn’t always been agreement on what. Alderwoman Cara Spencer, who has chaired committee hearings after Alderman Shane Cohn recused himself, proposed 21 amendments to Board Bill 33. The amendments would have restricted short-term operators even further than Narayan’s proposal.

Spencer wanted to limit the number of short-term rentals in larger buildings to 12.5 percent of their capacity. She also sought to prohibit short-term rentals from receiving city tax incentives or operating within 500 feet of a hotel. Hosts who don’t currently live in their units would not be permitted to operate in single-family, two-family and multiple-family residential areas.

The committee refused to vote on Spencer’s amendments, but many of Spencer’s points were addressed last week. The city is close to barring properties that receive tax-increment financing or tax abatements from ever becoming short-term rentals. Narayan also added a cap on how many units in one building could be rented for less than 30 days to prevent so-called “ghost hotels.”

And after two-and-a-half hours of debate last Friday, aldermen agreed on final versions of the bills that would provide barriers for short-term rentals to operate in residential areas. Hosts looking to set up a short-term rental in Single-Family Dwelling Districts would have to receive neighbors’ approval via a conditional use permit.

This made the regulations more palatable for alders on the fence. Some, including Vollmer and Alderwoman Sharon Tyus, wanted fiercer measures to dampen the rise of short-term rentals in single-family neighborhoods.

But one reason St. Louis began its years-long endeavor to tackle regulations was to curb violence downtown. Not a single part of the city’s central hub is zoned for single-family units — a point that is not lost on Narayan, who says this could cause more short-term rentals to migrate into the very place St. Louis is trying to mitigate them.

The bills seemed to please no one. Critics who wanted tough regulations said the city wasn’t doing enough. Operators with a stake in the industry said various components would hurt their operations to the point of putting them out of business.

“We need some regulation here,” Narayan said Friday. “Some people say this doesn’t go far enough. That may be true. But at the moment, there is nothing in place.”

For Amanda McCracken, a St. Louis-area native with multiple properties listed on Airbnb, the city’s proposed regulations may derail a business she has poured hundreds of thousands of dollars into over the past several years.

“We are for regulations,” McCracken says of what she describes as “good hosts.” “We’re just against the ones that will put us out of business.”
click to enlarge MONICA OBRADOVIC Amanda McCracken fears the city’s regulations would force her Airbnb operation out of business.

McCracken has seven short-term rentals. One is a restored 1920s duplex in Southwest Garden she rents out through Airbnb with her two daughters.

As McCracken walks around the house, she points out things they repaired or restored — the built-in bookshelf in the living room, the bathrooms and kitchens, the windows. The house is homey and clean. Sometimes, depending on the availability of the cleaners she subcontracts, McCracken will clean the units herself. As she walks around the duplex, she fluffs pillows and puts small debris in her pocket to throw away later.

“I’m very anal,” McCracken says.

McCracken has rehabbed buildings in the city for 28 years but didn’t venture into the world of Airbnbs until 2017. Renting out a small house she calls “the cottage” in the Southwest Garden neighborhood went well, so she later bought the duplex, which is on the same block, with the same purpose in mind. She bought it from owners who wanted to see the house restored. McCracken also restored a house right next door to the duplex off South Kingshighway, which she also rented as an Airbnb before she started to live in it herself.

“We make a difference,” McCracken says.

Each floor of the duplex is rented as a separate Airbnb. All together, McCracken allows 20 people to stay in the building at a time — with eight in the first floor unit and ten on the second.

St. Louis’ proposed regulations would surely hurt McCracken’s business. They’d let the city limit occupancy based on the properties’ square footage. McCracken fears she wouldn’t be able to break even if her occupancy is forced lower and she couldn’t charge her current rates. She also has concerns about the public registry the city wants to set up of permitted short-term rentals, which she thinks would lure bad actors to properties they know could be empty.

Several other hosts have the same concerns. Last week, McCracken and others decided to organize into a group called STL City Short-Term Rental Hosts United to advocate for good short-term rental operators, who they believe are broadly lumped with problem hosts.

“Our vision is to create a future where short-term rentals coexist harmoniously with traditional housing options, benefiting both hosts and the communities we serve,” the group announced in a mission statement released last Tuesday.

“We want to make St. Louis a model for how to do it right,” says Dan Waeltermann, an Airbnb host from St. Louis.

Waeltermann owns a landscape construction company; his expertise shows in the back of one of his rentals. The backyard of what was once a “flop house” in the Northampton neighborhood oozes luxury, with an elaborate landscape of brick walkways, a water feature and thriving plant life.

Waeltermann owns two more short-term rentals in south city that he fixed up himself.

“All of the houses I’ve purchased, not one flipper wanted to even mess with them because they were in such bad shape,” Waeltermann says.

In north city, Vrbo host Miles Strickland operates one property with his wife. He views short-term rentals as a way to save north St. Louis, where entire blocks of vacant properties can be seen crumbling into themselves from neglect.

“We got 2,600-square-foot homes over here with three or four bedrooms that can sell for $25,000,” says Strickland, himself a 31-year resident of north St. Louis. “If an investor saw that opportunity and rehabbed it, they could turn a $25,000 piece of property and turn it into a $150,000 property.”

The United hosts insist they bring value to neighborhoods — that their properties are not just around for parties, which most of them attempt to ban or prevent by requiring two-night minimum stays. Many of the so-called “superhosts,” an Airbnb designation for highly rated hosts, vet their guests and don’t allow instant booking.

McCracken estimates 95 percent of her tenants are families; she has a strict “no party” rule, though she does book bachelorette or bachelor parties that need a place to stay after celebrating at bars or other local attractions.

Lt. Col. Renee Kriesmann of the St. Louis Metropolitan Police says rentals run through larger booking platforms such as Airbnb and Vrbo are often not the problem.

“For the most part, we find Airbnb and Vrbo to be pretty responsible,” Kriesmann says. “They do a pretty decent job of trying to keep their properties safe.”

Problem properties are often rented through word of mouth, Kriesmann suggests.

Airbnb and Vrbo are by far the most recognized short-term rental platforms. But people also offer short-term rentals through Craigslist, Facebook Marketplace and numerous other platforms that have mimicked Airbnb’s setup — but don’t rely on the rating system that is integral for an Airbnb host’s success.

That isn’t to say all Airbnb hosts are all saints. Some intentionally turn a blind eye to their properties and will rent to anyone. That’s what leads to the parties with 80 people spilling out into the street and shots being fired.

Even the best hosts will admit there are bad hosts who need to be stopped.
click to enlarge MONICA OBRADOVIC Dan Waeltermann operates three short-term rentals in St. Louis with his partner and hopes to make St. Louis a model for doing regulation right.

One property owner in Soulard admits she was part of the problem. She thought she could make a little money by partnering with a short-term rental operator in Texas. She ended up in way over her head.

The anonymous property owner, who for simplicity’s sake we’ll call Jane, had gotten involved with a dark corner of the short-term rental world called arbitrage. The term refers to hosts who don’t actually own their units. Instead, they rent an apartment from a landlord just to sublease it through Airbnb or other short-term rental platforms.

The practice can be incredibly lucrative: With the right rates in the right location, hosts make more than their monthly rent, while landlords are stuck with property repairs and in some cases pay for the unit’s utilities.

Jane met an Airbnb host through Zillow after he applied to rent one of the empty units in her four-family flat. He was a smooth talker and a good salesman, Jane says. He offered to rent out the apartment for her. He said he’d keep it clean and that he’d only rent to nurses and professionals.

“What a lie that was,” Jane says.

Things went smoothly the first few months, but then Jane’s other tenants started to complain about noise and bad behavior from the Airbnb unit. Seven months in, Jane tried to terminate the one-year lease agreement, which the Airbnb host refused.

Even though it was her building, Jane says she had no control over what went down at the Airbnb.

“What pushed me over the edge was the neighbors let me know there was a shooting outside the building and apparently the Airbnb guest was involved in the shooting,” Jane says. Jane later found out 15 people had been at a party in the small two-bedroom apartment that night.

A few days later, the city condemned the unit. Jane called the inspector’s number on a sign placed outside the unit’s door and was told the apartment was condemned due to “safety concerns.”

Jane notified Airbnb about the condemnation notice, and the host’s listing for her unit was removed from the site. But a few hours later, Jane found a new posting on Airbnb for the same unit.

“The guy had the intention to keep renting the unit even if it was condemned,” Jane says.

click to enlarge ILLUSTRATION BY JOHN KERSCHBAUM

A neighbor later called to say she saw a man enter the unit. Jane called the police — who, to Jane’s shock, allowed the host to stay in the unit even though it was condemned.

The host’s profile on Airbnb shows 120 listings, but he actually owns closer to 60. Negative reviews shown on his profile aren’t tied to actual listings, meaning the host took down listings that received negative reviews and reposted the units for a fresh start.

“He’s a con artist in the sense that he’s not running an honest business,” Jane says.

Airbnb arbitrage is most profitable with volume. After adding up the cost of renting, cleaning and furnishing the units, as well as other expenses, a host may hardly earn more than what the unit cost them. So career short-term rental hosts often scoop up several properties for arbitrage in areas with high demand.

Zooming in on Airbnb’s map of St. Louis, it isn’t hard to find hosts with several properties listed in apartment buildings that are intended for long-term tenants. One host, “Brandon,” has 11 properties in Midtown alone. On Frontdesk, a short-term stay platform run without hosts, 17 units in the Level on Locust apartment building downtown are listed. Stays cost from $110 to more than $200 per night, depending on the unit’s size.

City staffers’ strategies to track short-term rentals aren’t much more sophisticated than hovering over platforms’ maps and finding which locations are listed.

Kriesmann with the St. Louis police says each of the six police districts keeps an informal list of properties they know are short-term rentals based off of calls for service. The length of each list varies per district, but most range between three and six properties, according to Kriesmann.

City Assessor Michael Dauphin says his office “sleuths the internet” to identify short-term rentals. But what they have on their books is not close to the actual amount of short-term rentals in the city.

Dauphin tells the RFT his office has reclassified 300 non-homeowner-occupied short-term rentals from residential to commercial, but they’ve identified hundreds more that are occupied by their owners or available for 30 days or more.

“There’s no central system the city has that I’m aware of that has every single short-term rental listed,” Dauphin says.

A host’s property taxes nearly double after the assessor’s office switches their classification from residential to commercial. On top of the commercial tax, Airbnb guests also pay a 3.5 percent hotel/motel sales tax and a 3.75 percent convention and tourism tax that Airbnb collects and remits on the host’s behalf. Vrbo does not collect lodging taxes in Missouri, according to its website.

Only the implementation of a new city ordinance will show whether the city will gain or lose money by regulating short-term rentals. The proposed four-unit limit would weed out several of the properties run by larger operations with dozens of rentals. But at the same time, every short-term rental would have to receive a permit in order to operate, and non-owner-occupied units would have to acquire a business license, so the city could gain more by running a regulated market.

Permit fees would go toward enforcement, according to Narayan. Nick Desideri, a spokesman for the mayor’s office, says the building division will leverage “existing technology” and implement necessary changes to register and monitor short-term rentals. The division may also bring in a third-party vendor, if necessary.

If the mayor signs the bills being discussed by the Board of Aldermen, the new regulations would become effective within one year. Narayan has said this is just St. Louis’ “first bite of the apple,” and the regulations may evolve based on the city’s needs as time goes on.

Biegacki, the homeowner in Lafayette Square, is not super optimistic the city would put together rules that work. But either way, he says he is determined not to let a nuisance property sour his neighborhood.

“This is our home,” he says. “We’re not letting some people two doors down who can’t manage an Airbnb deter us.”

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