AirBnB Has Been Rocked by COVID-19. Do We Really Want To See It Recover?

Yves here. AirBnB is responsible for increases in housing costs in many communities, as well as abuses of state and local laws.  I’m not at all a fan of them as a business proposition. This post suggests a way to provide for AirBnB’s supposed original intent, the occasional renting of spare rooms, without the profiteering

By James Muldoon, a lecturer in political science at the University of Exeter. Originally published at openDemocracy

So far 2020 has not been a good year for AirBnB. The company has missed its chance for an initial public offering (IPO) and racked up millions in losses – including a $250m payout to landlords for reservations cancelled due to the coronavirus pandemic.

In a bid to save $800m, the company has suspended all its marketing activity for 2020 and given executives a 50% pay cut. After a spectacular rise, things now look uncertain for AirBnB and its global dominance over short-term rentals. Landlords are leaving it in droves following the “ AirBnB Apocalypse” and are putting their houses back in the long-term rental market to salvage their losses.

The entire industry faces a devastating impact from the coronavirus pandemic due to knock-on effects of cancelled travel, events and conferences. AirBnB will eventually re-emerge, but it will no doubt be rattled by this experience and see a significant amount knocked off its market value.

Previous attempts to regulate AirBnB have proved ineffective due to the company’s deep pockets, lobbying power and willingness to fight regulations in courts across the world. The coronavirus has been the only force so far that has been capable of preventing the company’s continual expansion. While it is temporarily halted, it’s time we acknowledged that it is a threat to affordable housing and should be replaced by a democratically controlled alternative.

AirBnB began with a feel-good story that captures the myth of the “sharing” economy. A couple of friends rented out an air-mattress and decided to expand with the mission of helping families share their homes, make some extra money and meet new people along the way.

In 2020, the reality is that more than half of AirBnB listings in London are entire homes, displacing resident Londoners, and almost half are hosts with multiple listings. The rapid expansion of AirBnB’s extractive business model has gone hand in hand with a global covert war on attempts to tax and regulate it. The main beneficiaries of the business are venture capitalists and predatory landlords who run small rental empires, depriving locals of desperately-needed homes.

But how did AirBnB became such a threat to local communities? And are there alternatives to the profit-driven models of platform capitalists that can keep wealth circulating within communities, and create a digital future owned by all?

AirBnB’s rise

Scrolling through job advertisements you might be surprised to find the following: “AirBnB seeks community organizers to organize and advocate for home sharing in cities throughout the United States and abroad.” The corporate giant, which currently hosts over 7 million listings in more than 100,000 cities across 220 countries and regions, still likes to depict itself as a grassroots community-led organisation.

But the idea of AirBnB as a community of like-minded individuals interested in home sharing is little more than marketing spin. Its valuation of $31 billion dollars in 2017 would have placed it in the top 100 nation states in terms of GDP. It has a sophisticated communications plan to maintain its image as a pioneer of the “sharing economy” while keeping its many litigations and disputes with authorities out of the news.

This strategy has become increasingly difficult as it has continued to expand, with a growing collection of scientific studies and news reports casting doubt over its noble intentions and positive impact on local communities. Analysis conducted by the Economic Policy Institute, a non-partisan American think tank, reported that the economic costs of AirBnB to local communities likely outweighed the benefits.

Research from the Harvard Business Review found that AirBnB is negatively affecting the housing stock across the US due to the incentive for landlords to take properties out of the long-term rental market and turn them into profitable short-term rentals.

A recent Guardian report also found that AirBnBis threatening affordable housing across the UK. AirBnB rentals have become so prevalent in some parts of the country that there is up to one listing for every four properties, prompting calls for increased government regulation and for a 90-day cap on all homes let on the platform.

In 2018, AirBnB reached a landmark: they reported $200 million profit for the year and seemed poised for a successful public listing. But in the first nine months of 2019 AirBnB recorded a $322 million net loss, with the coronavirus now threatening to push its initial public offering date back to 2021.

As their public listing approaches, everything is on the line. Investors are already weary following the poor performance of other platform companies such as Uber Technologies Inc., Lyft Inc. and We Co. The fear is that further troubles could jeopardise their attempt to go public.

At this crucial moment AirBnB is doing everything it can to assure investors that future regulations won’t limit their profitability and maintain its positive image with the general public.

AirBnB’s Undercover War on Cities

“Read my lips: We want to pay taxes,” declared Chris Lehane, AirBnB’s global head of public policy, in 2016. But despite their many public statements about partnering with cities and working with local communities, AirBnB has been one of the most litigious startups in Silicon Valley, fighting cities across the world in an attempt to avoid regulations.

Since launching in 2008, AirBnB has been involved in at least 11 lawsuits against local and state authorities in America, with legal action taken against Boston, Palm Beach County, Miami Beach and New York in the past two years. They have used their deep pockets in a protracted campaign to undermine regulators across the US.

Officials at Palm Beach County, Florida have been attempting to force AirBnB to collect and pay the county’s 6% occupancy tax on visits since 2014. Three law suits later and millions of unpaid taxes still remain outstanding. “We knew we were going to get sued,” Palm Beach County tax collector Anne Gannon reported to Wired last year. “That’s what they do all over the country. It’s their mode of operation.”

In a joint letter written in 2018, Amsterdam, Barcelona, ​​Berlin, Bordeaux, Brussels, Krakow, Munich, Paris, Valencia and Vienna pleaded for the EU to more effectively regulate holiday rental website like AirBnB, claiming they were reducing the stock of long-term housing and adversely affecting neighbourhoods. Airbnb have ramped up lobbying efforts of EU institutions, spending millions in efforts to achieve less onerous regulations, according to a Corporate Europe Observatory report.

One of the primary threats to AirBnB’s business model is enforceable caps on property rentals. Cities such as Amsterdam, London, Paris, Tokyo and San Francisco all have caps from between 60 to 120 days a year. Candidates in Paris’ upcoming mayoral elections have suggested reducing their cap to as low as 30 night per year. Fears of the success of such a move have prompted AirBnB to demand “a single European oversight body for digital services,” which they could lobby instead of fighting battles against multiple cities. Airbnb recently won a legal battle in the Court of Justice of the European Union which foundAirBnB should be classified not as an estate agent but as an “information society service,” thus avoiding tougher regulations.

Throughout its ten year history, AirBnB has preferred to act without gaining permission and to allow regulators to chase them over violations. The resulting disputes have been like a global game of whack-a-mole, with AirBnB challenging local authorities’ attempts to stand up to them. The company fights every battle out of fear that if a particularly onerous set of regulations prove successful in one city, others would be encouraged to follow suit. For example, after regulations took effect in San Francisco, AirBnB lost about 4,000 listings.

What is clear in this pattern of behaviour is that Airbnb’s priority every step of the way has been to ensure that stricter regulations do not affect their future market opportunities. Concerns about AirBnB’s negative impact have only worried them following negative press, which is treated primarily as a PR exercise. AirBnB are prepared to work with cities so long as their business interests are not adversely affected. But in many cases, the rhetoric is simply a smoke-screen for a company that would prefer to operate with as minimal regulations as possible.

AirBnB Versus the People

In 2018, AirBnB publically declared that the company was not simply shareholder-driven, but would attempt to benefit all of its stakeholders, including local communities. Two years later and Airbnb report to be still “early in our work” with plans for the release of their first Annual Stakeholder Report in March of this year. But the only metric regarding protecting communities published in a recent update is about measuring AirBnB’s “carbon footprint”. Despite ongoing concerns, none of the indicators address rent and housing affordability or the impact of Airbnb’s activities on neighbourhoods.

We should ask ourselves the following: if AirBnB care so much about local communities, why has it taken the company over 10 years to produce a stakeholder report? Why was this only seriously considered following a wave of negative press just before its IPO? If this is more than a simple marketing exercise, why are there no robust and measurable targets?

AirBnB has consistently put its corporate interests ahead of those of local communities. In instances where being responsible and abiding by a cities’ regulations has threatened its profitability, it has fought tooth and nail to undermine and defeat local elected representatives. Its fight against San Francisco, which was eventually settled out of court, cost the city about $330,000 in legal fees.

AirBnB’s behaviour has opened up a new industry of companies offering assistance to local authorities attempting to regulate short-stay accommodation. The company’s reluctance to release its data to local authorities has also given rise to Inside AirBnB, “an independent, non-commercial set of tools and data that allows you to explore how AirBnB is being used in cities around the world,” administered by community activist, Murray Cox. Since AirBnB rarely releases data of its operations, it’s difficult to have an informed public debate over their policies and their effect on cities.

AirBnB doesn’t simply require more regulation. Instead, we need a complete overhaul of its extractive business model. It continues along its current path because there hasn’t yet been a large enough outcry over its actions combined with a co-ordinated shift towards a more ethical alternative. But a growing number of activists hope that this could soon change.

A Cooperative Alternative

Fairbnb.coop began in 2016 as a movement of people in Venice, Amsterdam and Bologna hoping to challenge the extractive model of existing holiday rental platforms. The organisation incorporated as a co-operative in October 2018 and has recently launched a beta version of its reservation system, allowing its 8000 registered users to book accommodation in five cities across Europe.

For Damiano Avellino, co-founder of Fairbnb.coop, AirBnB has “turned into a way for people to speculate.” This includes predatory landlords who buy up multiple properties to rent them out on AirBnB, as well as investors in the platform itself, who hope to turn a profit through the 23-25 percent commission paid to AirBnB on every transaction.

The model of Fairbnb.coop tries to stay closer to the original concept of “home sharing” while escaping the predatory aspects of Airbnb. As a workers’ co-operative, Fairbnb.coop invests half of the 15% commission on bookings into social projects chosen by hosts and travellers. Whereas AirBnB is designed to maximise profits for its shareholders, Fairbnb.coop only retains as much as is required to continue running the platform. This is a reversal of the underlying business model of AirBnB, which relies on maintaining a monopoly over the short-term rental market and extracting profit by exploiting their position as broker.

Its social projects enable the co-op to make a genuine contribution to the community. For example, travellers in Genoa can donate to the activities and projects of C.R.E.A, the Food Surplus Recovery Center and Mediterranean Laboratory, a space of culture and sharing. “In Amsterdam the money will go to a community gardening project in the north and an urban agriculture project for migrant women in the south-east – both poorer parts of the city,” Spanish founder, Sito Veracruz, reported to the Guardian.

In addition to its pursuit of public utility over profit, Fairbnb.coop also aims to reduce the negative impact of tourism and short-stay rentals through a “one host/one house” policy. This prevents landlords from taking properties off the long-term rental market by discouraging hosts with multiple lettings. Almost a quarter of London AirBnB hosts have five or more properties, with eleven hosts who have over 100 properties listed on the site, according to data from Inside AirBnB.

Damiano Avellino argues that it’s the communities themselves who have a right to decide on what further regulations should govern each city: “how to choose the best regulation for each city is something that we should come up with together,” he claims. “What is really important is to make sure the platform is governed as a commons and can act as a positive force for change in local communities.”

The challenge for Fairbnb.coop is how to expand their ownership and governance structure beyond the original investor/workers of the enterprise. Fairbnb.coop has ambitions of bringing in more stakeholders that would have voting rights over how the enterprise is run.

Currently Fairbnb.coop remains relatively small, but the model represents a genuine alternative to venture capitalist-funded Big Tech platforms. Next time you book short-term accommodation after the coronavirus pandemic, check to see whether you could support the local community instead of Silicon Valley.

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45 comments

  1. Tom Stone

    No, AirBnB has distorted the rental market here in Sonoma County severely.
    The sooner it dies, the better.

    Reply
  2. divadab

    Well I have a neighbor whose job along with every one else’s where he worked was moved to a low-wage “right-to-work” State. He makes a living renting out his back house and a neighboring house he bought on Air Bnb. Good neighbor, responsible person, hard worker, a credit to the neighborhood and a friend. And our City restricts Air bnb to owner-occupied units only. So I’m very reluctant to advocate outright eliminating Air bnb. It serves a useful function, when properly regulated. I think most of the problems with air bnb are a failure of regulation – the one thing that makes my neighbor completely non-problematic as an air bnb host is the owner-occupier requirement.

    He’s having a hard time right now and I think slamming Air bnb or wishing it gone is pretty mean.

    Reply
    1. Sam Adams

      Just the opposite experience. A neighbor sold to out of state investors, then put AirBnB groups in. Nothing could be done to stop them or the parties that followed. Police came, closed down noise and parties. The small police force are overwhelmed. Cleaning crew roll in Monday. Next weekend a repeat. Slowly my other neighbors have given up and sold. Other investors bought their homes. Wash repeat. I’m now surrounded by mini hotels filled with people fleeing the northeast epidemic.
      Proper regulation is a mythic beast.

      Reply
      1. Wukchumni

        A pox on AirBnB/VRBO

        They allowed anonymity to replace community, and we will soon be paying the outsized price as these garage mahals will be foreclosed on and then turned into squatters hovels, as I got news for you sunshine, the real estate market is toast, and if the 200 out of 1,000 homes here went on the market all of the sudden, all it would do is chase prices down.

        Sequoia NP is closed for the duration, and there’s no work here or attractions, aside from city slickers fleeing the Big Smokes holed up in a rental redoubt, that a suddenly desperate landlord leased to them for an indefinite period, and what does he or she care as long as their moolah is good?

        Reply
    2. Tim

      We’re one of those great kind of neighbors.

      Others raze old cottages then clear cut lots to stack rectangular vinyl.
      Clearly there’s a market for that.

      Our market has been meeting fantastic people from around the world who appreciate experiencing their vacation or working from “grandma’s beach cottage” hidden behind old growth live oaks & classic gardens.

      Airbnb has been destroying their brand by the hour & taking small operators like us with it.

      FairBNB.coop sounds like an excellent replacement for people like us.

      Reply
    3. The Rev Kev

      When properly regulated? That is the point. AirBnb absolutely refuses to be regulated. It is their business model. That is why all those lawsuits they launch – to carry on in illegal activities.

      Reply
    4. anon in so cal

      Spent hours on the phone line this past sat night due to a problem house nearby. A recurring problem and not the only one in the hood. The absentee owner alternately rents it long-term to problem tenants or on a daily basis to problem guests. This past sat night, the guests started blasting music, etc. at 6 pm. Appeared to be a large crowd. A house party during a pandemic. Officers came out twice, at midnight and again at 2 am. An associated problem is the increased neighborhood traffic and horn honking. Many attendees arrive and leave by uber. The uber drivers honk their horns if the ride is not immediately ready and visible. This place is rented out through one of the many competitors to airbnb. Imho, airbnb distorts the market for both sales and rentals. Greedy owners have an incentive to rent the place on a day-to-day basis over longer-term. There is the increased traffic, less community cohesion, and other associated morbidities.

      Reply
      1. Arizona Slim

        Pssst! It’s Slim! In Tucson!

        Perhaps I could offer this suggestion from our dear Old Pueblo: Don’t annoy a city council member.

        Link: https://www.kgun9.com/news/coronavirus/house-party-in-tucson-could-affect-city-policy

        Oh, it’s also not a good idea to get the police chief worked up.

        Link: https://tucson.com/news/local/tucson-police-stop-partying-during-the-coronavirus-outbreak/article_62b8cb6a-7363-11ea-9904-23c62fad5973.html

        Perhaps SoCal officialdom might want to take a hint from Tucson.

        Reply
        1. anon in so cal

          Thank you so much for posting those links!!!! They are very helpful!! And kudos to Tucson for taking those steps!!!
          Yesterday I emailed the captain of the precinct associated with my hood and amazingly enough received a reply. I had made a point of mentioning how the party was endangering the lives of first responders, healthcare workers, etc. This morning I got an email from the deputy city atty. Fingers crossed that la takes the hint from Tucson!

          Reply
    5. Other JL

      Your neighbor apparently owns at least 3 houses, two of which are on AirBnB full time? How are those two “owner-occupied” as required by city regulations? This doesn’t add up to me.

      Reply
    6. Yves Smith Post author

      Sorry, but he is violating local laws, depriving your city of tax revenue on hotels, and distorting the local real estate market by claiming a house he bought to rent is owner occupied. He may well have misrepresented the rental as a primary residence on his loan application (banks seldom verify that).

      In other words, the fact that he is a “nice guy” does not mean he is not doing harm.

      Reply
    7. drumlin woodchuckles

      If Airbnb is in itself causing a hard time to other millions of people other than your particular neighbor, then it seems the weight of millions of reasons to wish Air bnb exterminated outweighs your neighbor’s one particular reason to see it continue to exist. Outweighs it by several millions of reasons.

      On balance, it seems better that circumstances exterminate Air bnb, because it is already far to big for any combination of people to protect themselves or their communities against it.

      Reply
  3. DAVID SMITH

    I think AirBnB will emerge from this stronger. People will feel safer cocooned in a fully equipped apartment than in a hotel with hundreds of people rambling around the lobby, gym, pool, and dining areas. Hotels also host meetings, generally in cramped, packed windowless rooms, a revenue stream that will be especially long in returning.

    Reply
    1. lyman alpha blob

      You are assuming people who live in residential neighborhoods on a long term basis want to be surrounded by strangers coming and going all the time to their illegal hotels, rather than having, you know, neighbors.

      We don’t.

      Reply
  4. Vastydeep

    I love the idea of “Fairbnb” — suppose you have a great idea, but you don’t want to “vulture capital” it? Create a co-operative like Fairbnb? Create a B corporation like Yvon Chouinard and Patagonia? Every time a Fairbnb rises up it cries out that there really are other options. It’s been 100 years now — maybe it’s time to admit that the ruling in Dodge v. Ford Motor Company was a mistake… Perhaps it takes a pandemic to finally get back to stakeholder capitalism.

    Reply
    1. Tim

      Yvon & the amazing company Patagonia he built is EXACTLY who I thought of as a replacement for the arrogant culture of Airbnb.

      (saw your post after my reply above)

      Reply
      1. jefemt

        I worked for Patagonia for 8 years, In MT, CA, BC, and MT.

        In 1996, they moved MT ops to Reno, NV, and we chose to not move. Best 8 professional years of my life. YC warned me, we have ruined you as an employee— you will no longer be employable! So funny– too true. He’s a very smart man!

        I liquidated my generously-matched Patty-G 401K and constructed a purpose-built short term Vacation rental. Got out of the stock market, which I revile with a passion generally reserved only for Trump. This was pre-internet, and we were one of two short-term vaca rentals in town. Main client group was parents visiting young families and grand-kids, NOT fishermen or visiting University-affliated professionals, as we had anticipated. Low-key marketed – booked word of mouth.

        Our town now has an acute workforce housing crisis, like many ‘resorty’ towns. We have over 140 short-term vacation VRBO/Airbnb rentals within a 1 mile radius of our home and guest house.

        They call the internet ‘sharing’ economy disruptive.
        As to housing markets, combine VRBO/Airbnb with the 2008 bailout monies, fractional reserve banking and wall-street wizardry and concomitant asset inflation— flooding into ‘cheap’ Rockies (or other amenity-laden locales)…
        Well, disruptive technology is a profound understatement!

        Reply
        1. Tim

          One of my big mistakes in life was listening to my wife and NOT moving out west the instant I learned of Patagonia & their values in the 80s.

          Figured only downside was moving back east.

          I’m at Ocean Park Cottage dot com and with a dirtbag soul.
          ;-)

          If you’d like to chat.

          Mention we spoke in here.

          Reply
  5. sd

    I’ve had good experiences with AirBnB but always chose to stay in owner occupied units.

    That said, some places I regularly travel to have changed over time. For instance, Its sad to see how 101 Reykjavik has turned into just a huge giant hotel. So many rent out apartments that what was once filled with Icelanders is now filled with tourists. That’s fine in small numbers, but that’s no longer the case.

    In Los Angeles, a close friend has seen her apartment building empty out. She didn’t sign up to live in a hotel. There are now only 6 full time tenants left in a 22 unit building. All of the other units are AirBnB. From a safety standpoint, it’s not possible to tell who is coming and going.

    From personal experience, I had a neighbor rent out his place for parties on weekends. It started escalating, and he wasn’t cleaning up the public spaces after the parties, Greed lead him to became a sh*tty neighbor, the landlord caught on and gave him the option of stopping or moving.

    Limiting AirBnB to short term rentals of 30-90 days in a year would be a good place to start. Restricting percentage of space might also help, for instance, no more than 25% of cumulative space in any particular location to prevent entire apartment buildings from becoming hotels. And lastly requiring units to identify that they are an AirBnB host with some sort of medallion, plaque or sticker. Then at least you’d know you are in a hotel instead of an apartment building.

    Reply
  6. PlutoniumKun

    There are plenty of alternatives – from home swapping sites (I’ve never used one, but several people I know rave about the great value and experience they get from them), to free hosting sites such as couchsurfing (recently crapified I’m told), warmshowers (for bike travellers only), and those based on language exchange. There are also some commercial versions that I’m told are a bit more ethical in their approach (I won’t link to them as I can’t confirm that they are genuine, others may chip in).

    My own feeling is that the only genuine alternative is if local governments set up craigslist type sites for accommodation and transport on a non-commercial basis, and ensuring that they act entirely within local regulations. There seems however to be a huge reluctance to do this- I assume because of the up-front costs. The French government has shown with Qwant that it is possible to create genuine alternatives to big Tech.

    Reply
    1. Arizona Slim

      One of my neighbors was on Warmshowers. I say “was” for the following reason:

      My neighbor started getting last-minute lodging requests from solo men, and there was something about those messages that made her feel uneasy. At the time, she was divorced from her husband and was living alone.

      Just my US $.02. Your mileage may vary.

      Reply
      1. PlutoniumKun

        I’ve had lots of people stay with me on warnshowers with no problems – but then again I’m not a lone female. The referral system in my experience works very well, they are quick to eliminate genuine creeps. Having said that, there is a high percentage of eccentrics cycling around the world, a lot depends on your tolerance for that.

        Reply
    2. Basil Pesto

      I hadn’t heard of Quant until this post – interesting.

      Tangentially, I’ve had the idea bouncing around in my head for a few years now of a state-run social network that performs all the genuinely worthwhile functions of facebook (contact with friends, instant messaging, small and large scale event organising, virtual noticeboard & soapbox, small business directory, classifieds/marketplace) but completely devoid of advertising and profit motive, with a clean, minimal design and no Dark Patterns, and best-in-class privacy practices, easily understood by the end user and with regular, independent audits. A small but technologically ambitious nation (Estonia? Iceland? idk) could develop the platform for their country, then license it to others to make it a global concern.

      Fanciful maybe, but I’d bin facebook in an instant if such a platform existed.

      Reply
  7. lyman alpha blob

    Attempts to regulate AirBnB were ineffective because nobody bothered to enforce existing regulations with criminal penalties.

    Some cities, like my own, had already banned short term rentals like this in the late 90s before AirBnB was even a twinkle in some Silicon Valley grifter’s eye. If AirBnb can create a platform where people from all over the world can list properties, surely they could also refuse to list properties with addressees where such short term rentals are illegal. But they don’t – they continue to list properties in places where it’s illegal and as far as I know not one executive has ever had to pay any penalty for this blatant abuse of the law.

    I don’t like the “FairBnB” idea any better. They’ll “discourage” people with multiple listings, will they? And how exactly will they do that? By asking nicely? And what about whole house rentals? I can think of any number of ways to game this system. No internet platform that can be accessed by millions or billions of people is going to stop this problem. Not unless they adhere to the laws of every municipality and refuse to list properties in areas where they have been banned. But that would cost a lot of money to do, which is why it hasn’t been done by AirBnB and why it won’t be done by this co-op either, which sounds like an attempt to put some hippy lipstick on a capitalist pig.

    When our city was going through a big controversy a couple years ago, one pro-illegal hotel advocate argued that people have been doing summer rentals in the area for decades, so why the problem now? I have no doubt he is correct. But it was on a much smaller scale with a few people doing it discretely without bothering their neighbors, maybe listing the rental in the back of a magazine or renting to the same family for years. And that’s what it needs to go back to.

    All the illegal hotel businesses, coop or otherwise, need to be killed with fire.

    If you really want to run a B&B, there are actual bed and breakfasts out there for sale. But that takes work! – doing the bookings, cooking and cleaning rooms. Much easier to let a platform do the booking and have some underpaid gig worker come clean up afterwards, and you never even have to get off the couch.

    Reply
      1. Anon

        Co-ops predate the 1960’s Summer of Love. They are not “hippy lipstick”. Farmers are historical practitioners of cooperative enterprises. The Bank of North Dakota (1919) survives as a “cooperative” to this day.

        Reply
    1. Wyoming

      All the illegal hotel businesses, coop or otherwise, need to be killed with fire.

      I think this is the bellweather indicator.

      There will come a time when tolerance reaches its limit and suspicious fires at AirBnb locations start occurring. People will only tolerate so much in their neighborhoods before they take action. With the fallout from this crisis I expect we have taken a large step in that direction.

      Reply
  8. Arizona Slim

    There’s a recently sold house that’s just one block away from the Arizona Slim Ranch. It appears to be an AirBnB, but the ever-efficient neighborhood grapevine hasn’t told me yet.

    So far, no problem with any of the people staying there. However, as spring turns to summer, and our beloved COVID shows no sign of abating, I think the owners will experience some problems with their business model.

    Reply
  9. Joe Well

    In many countries, there is an official program for private homeowners to offer rooms to tourists. I am thinking of the Cuban casa particular system as an example. But our national and state governments don’t want to govern, much less do things like that. Maybe a nonprofit would be an alternative?

    Reply
  10. eg

    Our existing laws governing hotels had to have been crafted for some set of reasons. Have they just been forgotten? That doesn’t seem possible — so why do we allow them to go unenforced?

    I’m guessing perverse incentives?

    Reply
    1. drumlin woodchuckles

      How many municipalities are so tax-starved and over duty-loaded that they cannot even hire enough people to keep track of things like wildcat outlaw hotels?

      Reply
  11. Richard Hershberger

    I have used AirBnB just once. I went to a conference in San Diego last summer and got a room at about half what a hotel room would have cost. It was a studio apartment, “furnished” in the sense that college apartments are furnished. The Wifi was very good. It was fine for a couple of days, where I was just there to sleep and shower. But there was a cloak-and-dagger air of the absurd about the whole thing: following last-minute instructions to get the key, and being asked to not let on to the building what I was doing there. This obviously was a sublet contrary to the lease terms. On the one hand, I don’t have any actual complaint. I paid a reasonable price and got what I paid for. But the whole exercise seemed faintly ridiculous.

    It was also obvious that much of this comes from the disconnect between the feel-good story of a homeowner renting out the spare room for extra cash and the reality of units being dedicated to short-term rentals. This is much like the difference between the guy driving for Uber for beer money and the guy buying a car financed by Uber to drive full time. Lots of things that are reasonable as side gigs don’t work so well as full time enterprises. It is telling that the marketing pushes the image of the side gig, discreetly passing over the reality.

    Will I use AirBnB again? I can imagine circumstances where I might, but my inclination is to pay for a real hotel room.

    Reply
  12. chuck roast

    Liquidate AirBnB. Sharpen the knife for FairBnB.Coop…they sound like the right-thinking liberals who wouldn’t piss on you if you were on fire. And, of course, it’s the infinitely malleable Liberals in charge that let this happen. I want to live in a neighborhood where the locals may not all be friends or acquaintances, but at least I recognize them. We have zoning for mixed-use neighborhoods. If I want to live with transients, then I’ll move to one of those areas. And the last thing I want…the very last thing…is that skanky, anonymous real estate speculators force out my neighbors and gentrify the area into anonymity.

    I checked out the InsideAirBnB website and looked at my little seaside community. The town map was ample evidence that we have a really, really bad case of the AirBnB pox. Well, that’s what happens when small craftsmen, builders and creative people get forced out by repeated actions of a city council who think that idiot tourist and second home owners will pay all the tax bills and keep the resultant ice cream, T-shirt and restaurant businesses thriving.

    I opened a small business here in 1979. I met all the artists, musicians, playwrights and actors in town. By 1989 they were all gone. Dispersed by rising rents and the real estate “scam-of-the-day”…time-shares. Sadly visible evidence of a community that lost its soul in the embrace of a few more nickels.

    In my earlier wandering days I met a guy from California. He seemed like an interesting fellow. In the course of our conversation I asked him what kind of neighborhood he came from. He gave me a kind of a quizzical look and said to me, “What’s a neighborhood?” I was totally stunned. And I am regularly stunned that we continually abuse ourselves in this way.

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  13. Felix_47

    I wonder if increasing income taxes to 1950s levels would help in the US. If the marginal rate is high enough there is no reward for bad and unethical behavior or even Air BandB. So if I have to pay 90% of my Air BandB or VRMO income to Uncle Sam I just might not want to rent out my place for 1000 per night which is what I get when I am working 1500 miles away. Of course that might negatively impact what we are willing to pay for resort real estate. What I make with VRMO does cover maintenance and taxes and insurance for the year and not much else. Without VRMO I am not sure I would keep the property. I use it only a few weeks per year. Thousands of decisions like mine would effect the resort property market.

    Reply
    1. Hoppy

      I think you hit it on the head. Airbnb, hell the whole gig economy, is a symptom, not the problem.

      Killing the gig economy, does that really fix things?

      Is it a means to an ends, yes maybe, but I don’t know if it is the best path.

      It’s definitely a pressure point.

      But who loses if airbnb, uber, etc. go under?

      Will it be Wall Street, Silicon Valley, or the people just trying to get by?

      The people just trying to get by need an alternative solution when they are no longer profitable for the gig economy to support because they are no longer cheap labor.

      They are already out of the primary labor force. Who picks them up next?

      Reply
      1. Hoppy

        And just to be clear. I should have said…

        The people just trying to get by need an alternative solution when they are no longer profitable for the gig economy to EXPLOIT because they are no longer cheap labor.

        My only point is the target might be wrong and politically unwise if even more people loose opportunity.

        The structural issues in this economy are the problem, the gig economy is the symptom.

        Reply
  14. Hoppy

    I am of mixed minds.

    When traveling I feel much happier paying a local family rather than a corporate hotel paying slave wages.
    When traveling, especially abroad, you usually can find a more authentic experience meeting a greater variety of people in non touristy areas.
    You euro/dollar/money goes further, its a better deal than hotels. There are positive knock-on effects to how your money is distributed.

    All the complaints are legit though.

    Recently experienced a bait & switch which is frustrating when you show up at midnight and have few alternatives. Airbnb did pay for my replacement hotel I had to book through other means

    The worst though is Airbnb showing listings in cities where they are illegal. It should not be on the individual user or even the rentier to know if the airbnb rental is illegal in the city they are visiting. I rented someone’s apartment. The lobby had huge signs warning this practice was illegal and should be reported. I wasn’t going to rat out the person, maybe they had some exception for their rental, I don’t know if there are nuances in local laws. But if it was illegal then airbnb management should be going to jail, not the two parties using their service.

    Instead they think they are morally in the right and flaunt local laws & traditions.

    And just a reminder for some folks here that think they are taking the moral high road in this argument. Homeowners\landowners don’t like renters living next to them in any situation. Ruins the neighborhood. Doesn’t matter if they rent for a week, 6 months, or a year.

    Most people complaining about lack of housing because of airbnb also don’t want any low income housing anywhere near their house.

    Reply
    1. sd

      That’s where I think something like a medallion, sticker, or plaque officially identifying a unit as an AirBnB might be helpful.

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    2. WayUpstate

      Concur with Hoppy. I have my misgivings about AirBnB and I’ve used it happily on several occasions in cities where hotels are exorbitantly expensive and all I wanted was a clean bed in which to sleep. In my own village, there is an ordinance against any rental of less than 30 days and if you scratch a little deeper you find that, in fact, many/most(?) residents deplore ANY rentals less it affect the “quality” of village life. There’s a reckoning coming from both sides of this issue.

      Reply
  15. Irrational

    Try to use small, non-chain hotels or B&Bs when travelling – this is of course getting more and more difficult globally, but there really are lovely B&Bs out there!

    Reply
  16. Rtah100

    In the UK, the idea you cannot let your property freely seems very odd. The only law against holiday letting is in London, where the hotels lobbied for anticompetitive measures decades ago and the GLC connived. Some UK local authorities restrict new builds to permanent residents only but others (often the same ones!) also restrict trailer parks so that you *cannot* live there twelve months round.

    We have a farm with a holiday cottage, converted from a barn by my grandparents, and a house in the village that my grandparents lived in and, until one of us can retire there, we also let as a holiday home. I wouldn’t use Airbnb for business (wrong market, transients looking for 2-3 night party pads in urban areas; dystopian nudge culture hamster wheel for owners) but I would use the original VRBO (owner in charge; typically families for a week or more, bigger budgets and less damage). VRBO now copies the Airbnb model of fees up the wazoo, as you say across the pond. FairBnB sounds interesting but seems to exclude operators of farm stay complexes with more than one unit. So much for rural diversification….

    Also, not everybody can stay in a hotel. Once we had children, my wife felt judged and we stopped staying in them in favour of self catering apartments, which give more freedom and cost less. There will be a market for s/c accommodation in all places, however small. A lot of our clients are either coming for local events (fishermen especially), for work (solar parks) or for weddings and visiting local family. Pure holidaymakers are strict high season. We also get people needing a place between moves or relocating.

    Perhaps the problem is better solved by building serviced apartment blocks in cities and limiting stays elsewhere in cities, as the shortage of accommodation is felt there. In rural UK areas, the problem is not the public bad of over-tourism but the general shortage of affordable rural property because of second homes. At least s/c accommodation is generating employment and profit locally rather than standing idle for most of the year. Rural council housing would solve this problem or, even better, rural self build plots, as most country people would rather do it themselves….

    Reply
  17. bondsofsteel

    AirBnB can also help the local housing market and reduce hotel prices. We live in Seattle… after SanFran, one of the most housing constrained places in the US.

    When we bought our house, it came with a small apartment in the detached garage. It’s too small and doesn’t have a kitchen, so we can’t rent it as an apartment. So, we’ve been doing AirBnB. While it’s been a positive experience for the past couple years, we’ve stopped because of COVID-19.

    We’ve considered adding a small kitchen to make it a longer term rental, but Seattle is adding so many restrictive laws for landlords it’s not really worth it :(

    Reply

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