According to DM Club CEO Damon DeOrio (and some DM Club members), the DM Club has a problem with poachers – unauthorized use of Club facilities. Some advocates of rent restrictions claim that a DMMA clamp-down on short-term tenants could help solve that problem. Let’s take a closer look.
Several members of the Dings Ad Hoc Committee interviewed Damon DeOrio on February 14, 2017. Damon admitted that the Club doesn’t have any hard data on how much poachers are costing the Club. But he could identify 13 instances of unauthorized use of Club privileges since January 1, 2018. These instances occurred during the Arabian Horse Show, the Barrett Jackson Auction and the Phoenix Open. Examples of abuse by non-members include:
• Using the driving range
• Using a valid member number to gain access to Club concessions.
• Calling in large take-out orders to DM restaurants and then not picking up the order.
Damon admitted that the Club does not have any way to distinguish between the authorized and interlopers at some venues. The Club doesn’t vet members who use specific facilities and doesn’t want to. Members would resent it, according to DM Club CEO Damon.
Damon was asked how important home rentals are to the Club’s marketing efforts. He said it’s very important for prospective members to stay on site, see the real estate and experience the amenities. But he distinguished two classes of renter-guests at Desert Mountain.
The first class is those who are either registered guests of a member or who rent through selected realtors or who rent through Club sales agents. We’ll call these DMMA rentals. According to Damon, these short-term renters are very important to the Club’s marketing effort. The Dings Ad Hoc Committee identified 43 homes at Desert Mountain used for short-term DMMA rentals.
The second type of short-term rental is those booked on public sites like AirBnB or VRBO. According to Damon, these “unaffiliated” tenants erode the sense that Desert Mountain is exclusive, private and secure. The Dings Ad Hoc Committee identified 111 of these public short-term rental homes at Desert Mountain. According to CEO Damon, setting a 30-day minimum period on these public rentals would have very little impact on DM Club marketing efforts. Unaffiliated tenants are not good prospects for Club membership.
The Real Problem
If you’ve read this far, you’re beginning to understand the real problem DMMA rent restrictions would solve. It isn’t poachers. Loss from unauthorized use of Club facilities is trivial. The real loss is in rental commissions (up to 20%) when short-term tenants book direct with a home owner through a public site such as AirBnB or VRBO. Direct booking evades the commission structure Desert Mountain has maintained for many years.
Enacting a short-term rental ban would provide three advantages:
1. Squeeze most DM owners out of the short-term rental market.
2. Drive prospective renters to brokers authorized by the Club to lease short-term.
3. Deliver more short-term tenants into the DM Club marketing system.
Notice that the effect of any short-term rental ban is highly discriminatory. Under the March 12 proposal, the DM Club would have authority to clear any tenant for a short term stay at a home recommended by the DM Club. There’s no competition. Owners of DM homes have no such authority under the March 12 proposal.
Is the DM Club Really in the Rental Business?
Go to www.desertmountain.com. Click the second tab, Real Estate. Select Property Search. In the new window, select Rental Search. Click on View Results to the left of the Map. You’ll see all listings currently available. In this case, 47 DM rentals were available.
Nine of these listings show daily and weekly rates. It seems the DM Club has no problem recommending short-term rentals so long as they’re arranged through the Club. At least 10 of these 47 rentals mention Club amenities. These are the short-term rentals Damon feels are very important to the Club’s marketing effort – a feeder for Club membership sales.
To introduce short-term tenants to Desert Mountain, DM Club employees provide unaccompanied guest passes, explain how to use these passes and then partner up short term renters with real estate agents and Club marketing staff.
The problem solved by the March 12 proposal should be obvious. It would give DMMA and the DM Club a near-monopoly on short term rentals at Desert Mountain.
Follow the Money
The answer to the question at the top of this page is clearly YES. In a single stroke, DMMA rent restrictions could:
1. Channel more business to rentals offered by the DM Club.
2. Cut AirBnB and VRBO out of the short-term rental market in DM.
3. Give a boost to the tenant referral system planned by DMMA.
4. Give DMMA better control over guests invited into your home.
Rent restrictions are win, win, win for both DM Club management and DMMA management. The only losers would be Desert Mountain owners called on to sacrifice property rights.
The problem solved by the March 12 proposal should be obvious. It would give DMMA and the DM Club a near-monopoly on short term rentals at Desert Mountain.
Follow the Money
The answer to the question at the top of this page is clearly YES. In a single stroke, DMMA rent restrictions could:
1. Channel more business to rentals offered by the DM Club.
2. Cut AirBnB and VRBO out of the short-term rental market in DM.
3. Give a boost to the tenant referral system planned by DMMA.
4. Give DMMA better control over guests invited into your home.
Rent restrictions are win, win, win for both DM Club management and DMMA management. The only losers would be Desert Mountain owners called on to sacrifice property rights.
2. Cut AirBnB and VRBO out of the short-term rental market in DM.
3. Give a boost to the tenant referral system planned by DMMA.
4. Give DMMA better control over guests invited into your home.
Desert Mountain Homeowners Coalition 