It’s no secret, technology moves faster than government policies can keep up. Nowadays, rising tech companies look to hire lobbyists and former policymakers the same way they look to hire new dev talent.
Airbnb is no different. Since its start in 2007, Airbnb has made it easier for normal people to make extra income by renting out their apartments, summer homes, rooms, etc. to folks looking to visit their area for a short period of time. As you can imagine, cities have been scrambling to figure out what to do with this, re: how it affects developers, hotels, affordable housing, neighbors, and landlords. The most recent city to take a crack at bringing down the $30 billion behemoth was New York City.
Below are some quick facts to familiarize yourself with the situation:
- On Friday, Oct 21, Gov. Andrew Cuomo signed a bill (effective immediately) authorizing fines up to $7500 for many short term rentals – taking direct aim at Airbnb
- In 2010, NYC passed a law prohibiting short-term rentals of less than 30 days when the owner or tenant wasn’t present
- Between 2010 and 2014, NYC commissioned an investigation into Airbnb where it found 76% of units posted were illegal
- Airbnb previously asked the NYC government to forgo legislation and enable it to just pay taxes which would have amounted to more than $90M for the city, in the past year - to which NYC declined
- The 46,000 Airbnb hosts in NYC have generated over $2B in economic activity
- NYC is Airbnb’s largest US market and generated over $1B in revenue last year
- By the end of the day, on Friday, Oct 21, Airbnb filed a lawsuit against NYC
While harsh city reaction isn’t new to Airbnb, this one feels different. This law was passed to set a precedent intended to spur similar actions in other areas. Take a look at the other cities who’ve imposed strict sanctions or have entirely blocked Airbnb: San Francisco, Santa Monica, Berlin, Paris, and Barcelona.
Let’s be real: this is a complex issue and there’s no one right answer. You have developers who’ve backed political campaigns with the hopes of getting friendly treatment when building new projects, like hotels – much of which are experiencing lower revenues. Affordable housing is getting squeezed out the market with commercial Airbnbers opting to create “mini-hotels” versus renting to actual residents. Neighbors complain of loud noises and of no longer
knowing who’s in their buildings. And, landlords are having to deal with heightened wear and tear on their properties from visitors coming in and out, unwarranted.
For years, companies like Airbnb, Uber, and Lyft have experienced the delicate balancing act between creating social good and disrupting industries that have historically provided jobs and been highly regulated. At the end of the day, it’ll come down to the masses voicing their opinions on these new technologically inclined services. If the greater good has shown a love and desire to continue using these services to help avoid drunk driving or to make the extra amount needed to put food on their tables, they will stand against the government interference. That said, if there are communities being disrupted, jobs and revenues being displaced, and political interests not being met, those folks affected will speak too.
My opinion: These game-changing companies are necessary and do way more good than bad. The legislators need to work with the companies to determine how we can smoothly integrate their services into the framework of the cities. There’s a saying: “People like change, so long as everything stays the same.” This is what the world is currently facing. Uber, Airbnb, Lyft, and others are changing the way people make money, explore new spaces, and present a cheaper alternative to highly regulated, overpriced options. Instead of both entrepreneurs and government officials starting out in contentious, adversarial stances on an issue, they must be more willing to sit down at the table and hash these differences out. That way, we all win.
