So it turns out that more than half of all of short-term home rentals available on AirBnB are illegal. Yes, half. A recent investigation by the folks at Skift revealed that these offerings are in direct violation of a city law that prohibits short-term stays. And each and every one of the hosts running those properties is liable to owe the city between $1,000 to $20,000 per transgression—surely enough to sully the peer-to-peer home share site's halo in the eyes of users and investors alike.
Airbnb undeniably offers a popular and useful service. And its feel-good origin story and easygoing ethos can still imbue the entire endeavor with that nonchalant 'crash at my place' vibe that first endeared it to both budget travelers and Silicon Valley VCs. But the stark truth, according to Skift, is that the majority of hosts now offering properties up for rental are not chill dudes looking to make an extra buck and meet new pals. They're organized conglomerates that use the platform to shirk hotel regulations and push tenants out of their homes. And they are breaking the law.
“The vast majority of Airbnb listings are multiple units by the same entity,” says Sarra Hale-Stern, District Office Director for New York State Senator Liz Krueger, who sponsored the legislation that made short-term rentals illegal. “It’s not Aunt Suzy going off to London for the month. It’s corporate entities doing it 12 months out of the year.”
In a high-demand tourist destination like New York City, it's often more lucrative to stuff your apartment buildings full of short-stay travelers who are willing to pay a higher rate per night. But using new technology to pack city buildings with wayward tourists as far as the market will bear only makes sense in the kind of libertarian fantasia that too many startups seem to traffic in.
First of all, hotel regulations exist for a reason. People may bitch about overbearing rules now, but imagine a fire in an overstuffed loft complex without adequate fire escapes, a bunch of panicking, jet-lagged tourists swarming this way and that. There is a very real potential for serious disaster here. And then there are health and building codes to manage—a lot of people pass through hotels, and it's a lot more work keeping everything sanitary, functional, and safe.
And, presumably, we still want the people who actually live in the city to be able to continue to do so. Like, even the less affluent ones that can't afford jacked-up NYC hotel-level rental rates. But people are actually liable to get priced out of their own apartments. Others grow so alarmed by the rotating-door hotel atmosphere of professionally managed Airbnb locales that they're leaving their homes. These are extreme cases, but they highlight the potential that a peer-to-peer market has to disrupt folks' lives if it remains unregulated.
Unfortunately, this is what Airbnb thinks of those regulations: David Hantman, the company's Global Head of Public Policy told Skift that "We can't possibly keep up with the law in all the cities." Um. Why not?
“We are a platform that serves 34,000 cities. New York is a big one. We try to be as open as we can and we are trying to keep our hosts better informed. We want to avoid becoming legal advisors who are required to know the law in every market we operate.”
Ahem. Do you, Mr. Hantman, know how many international companies would love to not be "required to know the law in every market" they operate? Fucking all of them. That is perhaps the most brazen and disrespectful stated policy I've heard from a peer-to-peer online marketplace operator—and I'm well aware of Uber, so that's saying something.
Now, to any of the good folks at Airbnb who are reading this—and, believe it or not, I truly admire your product; it is an innovative way to link demand to spare capacity in the tourism sector, and it can be done responsibly—but designing an extra cool peer-to-peer platform does not exempt you from observing laws that have been established to protect the rights of citizens. Just because you only work out of San Francisco, and because it is inconvenient that you have to worry about hotel regulation in, say, London or Paris, doesn't mean that you should have the privilege to ignore the rules a given society has chosen to adopt.
The sharing economy, which Airbnb helped give rise to, is by and large a very encouraging phenomenon. But this episode really does lay bare the hubris that so often comes embedded in the purveyors of disruptive technology: If Airbnb is serious about maintaining the social benefits of its product—as well as a sustainable business model—it's got to devote some serious time to understanding and explicating the regulations in, yes, every market in which it operates. Just like every other company that works across borders.