Last week I wrote a story for Skift about Airbnb’s troubles in New York City. Like many other big cities that lots of people want to live in and visit, New York has lots of people and few places to put them. That’s why in the middle of a housing glut across the U.S., New York City has a record low availability for apartments.
One of the reasons is that at least 10,000 units are being rented out every night illegally on Airbnb, as well as other vacation rental sites. They’re doing this by openly flouting a law that’s been in effect since May of 2011 that says it’s illegal to rent full apartments for less than 30 days. It’s a pretty basic law that the city worked closely with state legislators to make as simple as possible so that enforcement would be easy. Airbnb says it’s complicated, but it’s not. It just doesn’t fit with their business model. Residents and community leaders had been complaining about a glut of illegal hotels for years, but a patchwork of laws meant that it was nearly impossible to put a real end to it.
And the profits were nice. A studio apartment on a vacation rental site can go for $175 or so a night, bringing in much more than the monthly income from someone with a standard year-long lease. Plus, the hosts could basically operate like a hotel, but without all the pesky safety regulations, insurance requirements, permits, or zoning that real businesses have to deal with. Or good neighbors for that matter.
Airbnb likes to argue that its hosts are just folks; actors renting out their place while they are on tour, snowbirds getting a bit extra cash while they go to Florida. But that’s not really the case. It’s big operators like Smart Apartments that run 200+ units in 50 buildings illegally, infuriating neighbors and turning residential apartment buildings into dorms of cheap tourists who are after “authentic” local experiences. These are the type of tourists who only like destinations that cater to them and don’t think hard enough about how their desire for cheap authenticity doesn’t mesh with not reducing the quality of life for people in living the destinations they are visiting.
In a frank interview with me, Airbnb’s head of public policy said to that Airbnb couldn’t be expected to know the law in every market they operate. I think that’s wrong. Businesses big or small (and I started a small business with big ambitions this summer) have a responsibility to be good neighbors but, failing that, at least understand the law of the land. Anything else is plain arrogance, whether or not you consider yourself “disruptive,” have a “.com” at the end of your name, or fancy yourself as the second coming of Jesus, but for apartment renting.
I like Airbnb. I think it’s website is inspiring for travelers, house hunters, and armchair dreamers. They’ve pulled vacation rentals kicking and screaming into the present century and they’ve made it look sexy.
But I also think they’re being total assholes.
In their major markets, the ones that represent the majority of their bookings, Airbnb relies upon properties the destinations consider to be illegal as the backbone of their business, and it’s locals who are priced out of apartments or have to live with drunken German tourists banging on the front door who have to pay. Few people want a month-long rental in New York City, but lots of people want an apartment for the long weekend. What’s best for Airbnb is not best for their hosts, their users, or the communities they are operating in.
As for our story, we had some nice pickup, with a version of it appearing on NBCNews.com and highlights on tech and travel sites across the web. Ideally we’d see Airbnb respond by saying, “Hey, we’re going to operate according to the law in our leading markets and stop enabling and profiting from illegal activity.” But I don’t see that happening. I think that their leaders’ reality is so distant from everyone else’s that they honestly believe the nonsense that comes out of their mouths rather than the great prospects possible in the (legal) connections they make possible.