'Spring break all year': New Nashville home-sharing concept puts some residents on edge

Sandy Mazza | The Tennessean

Show Caption Hide Caption Video: Olmsted resident not happy with sharing building with 'Niido' renters Olmsted Apartment resident Robert Piraino is not happy with sharing the building with short-term renters

Robert Piraino was just starting to feel at home, six months after moving into one of Nashville's newest luxury buildings, when an email arrived saying that a new owner is transforming the complex into part-time hotel rooms.

Piraino was not asked to move out of the Olmsted in SoBro. Instead, he was told he may be soon living in a building filled with revolving streams of tourist neighbors.

Miami-based Newgard Development Group bought the six-story understated charcoal-colored building for $90 million last week. The group is now rebranding the building in partnership with Airbnb for a new home-sharing apartment community startup called Niido.

The venture is the latest development in Nashville's red-hot tourist market and its growing gig economy, which includes ride-hailing and food-delivery services like Lyft and Postmates. The boom has driven the frenzied redevelopment of downtown but also brought new challenges for residents as 14.5 million tourists now flood the streets each year.

At the Olmsted, news of the building's impending transformation came as a shock to many residents. They quickly organized a Change.org petition signed by more than 200 people in opposition.

It is here: Niido, Airbnb create first-of-its kind home-sharing apartment building in SoBro

"Professional people live in this building. Now we're going to have strangers coming and going," Piraino said. "One of their ads says: 'It's spring break all year-round at Niido.' I don't want to come home to a place where people don't care and leave garbage everywhere. That's not the community vibe I want to live in."

Niido co-founder Cindy Diffenderfer said she is not sure how many tenants will embrace the model. Nashville is expected to be Niido's first operating apartment-sharing community, though Niido is developing several buildings in Florida.

"We're first and foremost a rental community. So if we don't have a large number of people opt in, our business still works," Diffenderfer said. "What we're dealing with every single day now is just talking this through with our residents."

Niido officials are now working to redesign the Olmsted lobby and common areas with added furniture and signage of its lemon-yellow brand: "Niido: Powered by Airbnb."

Residents were told their locks would be changed to an iPhone-based code system, noise monitors would be installed in hallways, and they would have to carry ID cards. Niido is also developing a new events calendar for music, vendor sales, comedy shows and art classes, among other things that will be advertised on Airbnb's platform.

The company will recruit residents to pull short-term rental permits for their units in the building at 5th Avenue South and Peabody Street.

In return for allowing residents to rent their homes, Niido will take a 25 percent cut of profits. Participating tenants also have to pay city hotel taxes, cleaning expenses, and a 3 percent fee to Airbnb on top of monthly rent.

Diffenderfer said management will work to prevent visitors from treating the building like a "party community," despite a company tweet advertising that living in Niido properties would be like being on spring break all year.

"Airbnb travelers are not traveling to spend time in an apartment," she said. "An apartment is just a place I sleep when I travel."

Nashville's new identity

What is the new Nashville short-term rental ordinance? Nashville Metro Council passed an ordinance that phases out investor-owned short-term rentals in residential-zoned neighborhoods.

The tourism boom that has swept the city since 2008 nearly doubled the number of tourists that visit each year.

Hotel room rates responded by spiking so much that even limited-service hotels routinely charge $300 or more a night on weekends.

To cope, thousands of new hotel rooms are under construction at more than 100 new hotels. Those new buildings are expected to open their doors in the next few years across the greater metropolitan area.

Three new hotels with a total of 455 rooms in one massive building now face the Olmsted along Peabody Street.

Meanwhile, the number of short-term rentals have mushroomed. More than 6,200 short-term rental permits have been issued by Metro Codes Department since 2016. Hundreds more are now being sought by residents who were temporarily denied the permits for violating city code.

From earlier this year: Airbnb, Tennessee reach agreement on tax payments

The influx of temporary housing rocked some neighborhoods, particularly the popular SoBro, Edgehill, Germantown and Salemtown areas. Metro council members routinely field resident complaints about rowdy vacationers.

Councilman Freddie O'Connell, whose district includes much of this area, recently had to unhappily field his young daughter's questions about why tourists were spraying beer on each other outside a neighbor's home sometimes used as a short-term rental.

"This is a bigger question than one about short-term rentals," O'Connell said. "Nashville has – sometimes unwittingly – become a top-25 American city destination. The question is: 'Can we put on our big-city pants and actually think about what quality of life means now?'"

O'Connell said improvements to the way the city and platforms like Airbnb address complaints and bad actors could go a long way – such as temporarily restricting guests who received complaints from neighbors.

Earlier this year, city leaders tried to ban all non-owner-occupied short-term rentals from residential-zoned neighborhoods. But the state preempted the effort and overturned the city's decision to invalidate existing non-owner-occupied permits, blocking only new ones. Either way, the rule would not have impacted the Niido-owned property's ability to get short-term rental permits.

'An exciting place'

Kelly Lemmey, who lives at the Niido-run property, said she is not interested in renting out her home, but doesn't mind if her neighbors do.

"I’m not gung-ho and I’m not against it," Lemmey said. "Whether it’s good or bad, it’s happening. So maybe a company coming in trying to regulate it might be OK. If it turns out to be something I’m not comfortable with, I could move."

Diffenderfer said staff will be on-site to greet guests and respond to complaints throughout the day, and a round-the-clock security guard will be present.

Nearly 600,000 guests stayed in Airbnb rentals in Nashville last year, according to the company. Airbnb is one of several short-term rental platforms operating in the city.

"Nashville is a very important market for us," said Airbnb spokesman Ben Breit. "People want to be here. It’s an exciting place and an in-demand destination. Hotels in Nashville have the highest occupancy rates in the country and the highest prices in the country, according to some variables."

The 328-unit Olmsted building is set to be Niido's first operating experiment in apartment community home-sharing.

Last year, Canada-based Brookfield Property Partners invested $200 million into the Niido venture.

Its first major purchase was a 324-unit complex in Kissimmee, Florida. But that complex is not expected to begin functioning as a Niido home-sharing property until mid-2019.

The company's unusual mission and its slow, controversial roll-out in Florida, where many residents also object to the building takeover, worries some Olmsted residents.

Niido officials also haven't said if they'll release residents who don't want to be part of the transition from their leases.

"I moved into the Olmsted because they really did care about community," said Michelle Bellamore, a resident since it opened late last year. "Niido hasn't proven that this even works. Tourists are on vacation mode. If they're partying and drunk, it changes the whole dynamic of the building. I don't want to be in the elevator with a bunch of drunk dudes."

But Nashville Area Short Term Rental Association spokeswoman Megan McCrea said she believes such concerns are often overblown and the "bad apples" are few and far between.

She and her husband have relied on income from renting their property during difficult times, and they actively avoid renters who would damage their home.

"Who doesn't want a little bit of security in a world where there's not much of it?," McCrea said. "I think what people are experiencing is the growth of the city and that gets blamed on short-term rentals. For every horrible story you've heard, I can give you 10 good ones."

Reach Sandy Mazza at smazza@tennessean.com or 615-726-5962 and on Twitter @sandymazza.​​