It was 2008 when the startup company Airbnb launched its way into the short term rental market in the midst of an economic down turn. At the time, 2 million construction workers were forced to leave the field to pursue different and more lucrative industries. This is a large reason the housing industry still faces a labor shortage. Skilled laborers remain in high demand, and the "Airbnb Effect" had its part in pushing the home improvement industry along.

What is the Airbnb Effect? If you live in a city that draws in visitors, you know all about it. Homeowners with space suddenly became entrepreneurs with the use of one simple platform. With over 2.5 million listings and over 60 million guests world wide, it's a flourishing market to tap into if you're looking for some extra cash, which many of us did right after 2008. It didn't take long for Airbnb to be the preferred alternative to hotels, especially for millennials. So hosts took advantage, which lead to a multitude of changes to the housing industry, including a boost in home improvement.

Click to Browse the Top 10 Most Desired Airbnb Listings Worldwide

Today's experience-craving millennial travelers are choosy about the quality of their stay. Hosts found that they'd benefit greatly by adding some home upgrades to modernize their spaces. They could charge more and attract more guests so the upgrades were worth it in the long run.

Along with a modern essence to their stay, Airbnb guests are also seeking more unique stays like tree houses, RVs, and teepees driving the need for professional contractors who can make these unique spaces livable.

The home improvement industry has a predicted 6% growth for 2016 which can be attributed to a multitude of factors such as the recovering economy, rising home prices, and low interest rates which gives consumers more confidence in spending money on their homes. Though, the rise of Airbnb driven upgrades also plays its part.

According to a 2015 report done by Smart Assets - a financial technology company - hosts in high volume cities like San Diego, Houston, and Chicago were making an average $28,000 a year by renting out their extra space. Those who are flexing the Airbnb muscle and renting multiple unoccupied properties throughout the entire year are making much more, which has driven many cities to change policy that adds hefty fines for hosts operating more than one home.

Eight years post launch, Airbnb is in a flat out war with major cities like New York City, San Francisco, and Miami who've cast blame on the short-term rental company operating illegally, pushing out hotel business, driving up the costs of rent, and contributing to a housing shortage. Owners who can make more money on multiple short term rentals vs a few long-term rentals are hurting the housing ecosystem for residents of those particular industries. New York recently passed a law so strict Airbnb is suing the city for it. According to the new law...

"It is illegal for residents of 'Class A' multiple dwellings in New York City—buildings designed for three or more families—to advertise their full home for rent for less than 30 days. (Renting a shared or spare room is perfectly fine). Violators will be fined $1,000 for the first offense, $5,000 for the second, and $7,500 for the third."

According to an August report, the city removed over 2,500 listings in the city that didn't comply with the "one host, one home" policy.

In Miami, they're laying down the law with $20,000 fines to short term rentals operating outside of the city requirements for short term rental, which include a multitude of factors.

Between March and October the city issued a total of $4 million in fines.

According to the Miami Herald, one property (a 5 bedroom house in Miami Beach) has been hit three times with that fine totaling to $60,000. The owner is paying the fines on top of spending upwards of $200,000 on upgrades that make the home equipped to operate legally as a short term rental. This includes a wheel chair ramp, impact windows, fire sprinklers, and more.

Even with Airbnb throwing out lawsuits to cities like Santa Monica, San Francisco, and now the state of New York, officials in more larger cities may follow suit in adding regulatory resistance to the short term rental industry.

With so many moving parts going into 2017, will the demand for contractors keep up? Come back next week for our report on the top trends shaping the housing industry in 2017.

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