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Raleigh's last B&B owner blames Airbnb for its closure

Posted April 20, 2015

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— The capital city’s last bed and breakfast is closing June 1.

It’s owner noticed things were coming to an end about a year ago.

“My neighbor asked me why somebody should stay at the Oakwood Inn,” owner Doris Jurkiewicz said. “And as I'm explaining it too her, she said 'well why should they stay there? Your neighbors are doing the same thing.' And I said 'what?'”

Jurkiewicz, who has operated the inn for 31 years, said business has declined in the six-room bed and breakfast in recent years.

“I had a knock on my door about a month or two later and the woman said 'do you recognize me,'" she said. “And I said 'you used to stay here. Did you move into the neighborhood?' She says 'oh no. I'm staying at your neighbor’s house. I couldn't pass up the deal.’”

The former guest was staying at a nearby Airbnb home. Airbnb connects homeowners with visitors looking to rent a room.

Jurkiewicz says her business’ closure is largely due to the app.

“Since they're not regulated, they're not paying the taxes and they're not having to do the same things I do,” she said.

Raleigh city council members declared Airbnb and other room-sharing applications illegal in December after receiving a complaint from a Five Points resident about a neighbor’s rental. The following month, council members referred the issue to a committee for further study and discussion.

Opponents say such services undercut hotel taxes and present a traffic problem for residential neighborhoods. Airbnb users argue that regulations on the service impinge on a homeowner's right to use his or her property to make some extra income.

Under the city's current "Bed and Breakfast" laws, such rentals are allowed, but only in historic districts, historic landmarks or properties listed in the National Register of Historic Places.

Gregg Stebben, who operates as an Airbnb host, says operators like him should be regulated.

“The playing field should be leveled,” he said. “No one, I've heard no one disagree that taxes should be collected. I think taxes should be collected.”

But he feels Airbnb should not be blamed for Oakwood Inn’s closure.

The issue is business and jobs, not beds, he said.

“You're the CEO of a tech company and you're thinking about moving your company here because you've been lobbied by the city council or the mayor," he said. "And you see that Airbnb has been made illegal, you’re going to think this is not a place I want to move. This is not friendly to the tech industry or startups at all.”

23 Comments

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  • Gary L Jurkiewicz Apr 21, 2015
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    Alexia, you are correct. The major corporations are killing the smaller businesses like ours . AirbnB is a major corporation, see citation below from May 2011. When you join as a member, you are like a part of a franchise, they charge you fee based on your room rental.

    From the website Gigamon, May 31, 2011. Airbnb, the peer-to-peer apartment and house rental website, is rumored to be raising $100 million in a new round of funding that values the company at $1 billion. Such large numbers may seem shocking considering the startup’s relatively modest past — the three-year-old company launched out of its founders’ living room in San Francisco, has since raised $7.8 million. Airbnb is on track to take in more than $25 million in net revenues on $500 million of flow-through sales in 2011, and the rumors of a new round are on target, according to a source with knowledge of the company’s operations. If all goes according to Airbnb’s larger plan, those figures could just be th

  • Alexia Proper Apr 21, 2015
    user avatar

    It's unfortunate that any business ever has to close it's doors, but the argument for a "level playing field" really doesn't fly with me. There's no such thing.

    Let's say Hilton decided to open a B&B next door. They've got lots of money, so they could create something really nice and have no mortgage. Would one complain that it wasn't an even playing field? That's just the way business is and people get put out of business all the time by those with an advantage. The only issue here is that the advantages are taxes. Arguably, such taxes shouldn't even exist in the first place. What are those taxes for? They're just one more way to empty the pockets of the middle class. Might as well be honest about it and tack those taxes on our salaries.

    Somebody said we can't all run our own businesses. I'd argue we could. At least many could and did years ago before big corporations killed so many small businesses.

  • Gary L Jurkiewicz Apr 21, 2015
    user avatar

    Mr. Jeff Abbott; we have had FREE Wifi since it first came out. Hotels charge for it. We also have FREE off street parking which is required by the city. We had online reservations since 2002 when that service was provided. As far as musty, we are inspected not only in the kitchen, but the rooms and the grounds. Four pieces of our antiques were in the Thomas Day exhibit at the History Museum which eventually went to the Smithsonian for six months. When the pieces came back to NC, we donated them to the History Museum for everyone to enjoy for years to come. We have some very unique and wonderful pieces as told to us by our guests who know the antique market. We can not clean our bathrooms, they must be sanitized.
    Gary

  • Gary L Jurkiewicz Apr 21, 2015
    user avatar

    . We abide by all rules and regulations; the Airbnbs do not. We have to pay for the creation and maintenance of our website Airbnb provides it to their members, free. The Airbnbs also get an insurance policy to cover damage and such free from AirbnB, we pay for ours. We don't have a problem with the Airbnbs except they are doing the same thing we do, but do not follow the same rules and have a lot of free services. You can not compete with that. And we do offer many amenities; more than most B&Bs and Airbnbs.... that is not the issue.
    If the competition had to follow the same rules, I'm sure many owners would stop or the fire marshal and health department would not allow them to even open if not following the regulations.
    I hope this provides more info than what the news media is providing. They are only citing the competition of the Airbnbs, but it goes beyond the fact of pricing.
    Gary Jurkiewicz, Owner of the Oakwood Inn

  • Gary L Jurkiewicz Apr 21, 2015
    user avatar

    View quoted thread


  • Gary L Jurkiewicz Apr 21, 2015
    user avatar

    We would like to reduce our expenses. About 75% of a B & B's costs are fixed; mortgage, property taxes, and insurance. The banks will not refinance our mortgage currently at 6.5% which was issued in 2005. We have owned the Inn since 2001, not 1984 as WRAL stated. If we could get 4.0% like other people we would reduce our monthly payment by $1,500. The banks will not give us a new mortgage because we are running a business out of our house; the rules have changed. The Inn is a registered business with the city and is inspected by the fire marshal and health department all inspections have fees; $100 and $120 respectively. We have to charge the sales tax and occupancy tax. The Airbnbs do not pay any of these nor are inspected because they are not registered businesses. Their mortgages are at a more reasonable rate since the bank does not see the business activity since they are not registered. There are over 400 of these establishments just in Raleigh; over 1800 in NC. We abid

  • Amy Singleton Apr 21, 2015
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    View quoted thread


    Clearly you've never parked anywhere near Five Points.

  • Amy Singleton Apr 21, 2015
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    View quoted thread


    I'm going with all of the above. You're right, the legislative response is disingenuous too. In the whole of history I doubt a business team has asked a municipal committee if AirBNB or Uber are legal. Nor would they care. They just want their tax handouts too, nothing else.

  • Amy Singleton Apr 21, 2015
    user avatar

    View quoted thread


    And the city should be concerned when the business tax base diminishes. So should you. Are you going to clean the gutters and grease interceptors? Pay police and teachers with a personal check? Or privatize it? Because cleaning sewers is so profitable these days.

  • Amy Singleton Apr 21, 2015
    user avatar

    I would like for all those who are recommending we allow these non tax, unregulated entities to drive tax paying operations out of business where they believe the lost tax revenue will be made up? Sales tax, income tax... most working people will have to make it up.

    This is simply pandering to the "ownership economy" ideology which is beginning to have negative effects the economy at large. Believe it or not most people will still require a job. The whole economy can't function under the misguided perception everyone can and will run their own business.

    Most Uber drivers and AirBNB folks are earning less than the average hourly wage in the RTP area. Let's all give up our paychecks or allow them to be taxed to death so we can support low income service "owners" as they drive revenue generating, tax paying businesses off the map. What a win.

    Sorry if your ideological position won't allow you to acknowledge clear fact but tax revenue matters.

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