
Legalize Airbnb - impendia
http://www.slate.com/articles/business/moneybox/2012/06/is_airbnb_illegal_why_hotels_are_so_upset_about_you_renting_a_bedroom_to_a_stranger_.html
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DanielBMarkham
What the internet is doing is taking our private lives and making them public.

If I sell an apple to you from my lunchbox, am I a food vendor and need to get
a license? What if I sell 100 apples? A thousand?

Government has created these boxes around what it considers employees,
restaurants, hotels, businesses, and so forth. Then the industry has waddled
up to the trough and helped create a web of laws that prevent just any random
schmuck from getting into one of these official categories. Now that we have
this ton of innovation, expect a lot of pushback. This article only scratches
the surface. If you are acting in the capacity of a hotel, should you have
health inspections? Carry a certain kind of insurance? Or are you a landlord,
but just for a day? In that case you have all sorts of tenant rights and
landlord responsibilities to consider. And the key question behind all of this
is: do we want government to apply the same kinds of broad solutions we needed
to safeguard consumers in 1850 (I exaggerate for effect) in the hotelling
business to one guy who rents his house for a couple of weeks a year? If not,
what is the difference? We're going to have to choose: either accept massive
government intrusion into every small detail of our lives (monitored by the
internet) such that we still fit into this concept of a 1950 economy or deal
with a world where these risks we used to not have to worry about are
commonplace.

Like I've always said, SOPA and such are just the beginning of the battle.
Lots more to come. It's not just big industry protecting it's turf; there'll
be a lot of that. It's the problem that the structure of the governmental
system doesn't match up to the actual way people are beginning to live their
lives. That's a much more fundamental issue.

I don't think legalizing AirBnb is going to help internet entrepreneurs any
more than brandishing a squirt gun is going to save you from an armed robbery.
The best it will do is cause an imperceptible delay in the oncoming storm.

~~~
_delirium
I think your dichotomy is a bit too stark, and the result will end up having
to be some mixture of traditional regulation and exemptions for small-scale
activity. With AirBnB, the guy renting his house a couple weeks a year I agree
is not a model that makes sense to shoehorn into 1950s hotel regulation. But
what's causing problems is that a number of AirBnB renters _are literally
unlicensed hotels_ , of the slummy, bug-infested, inadequate-fire-escapes sort
that the original hotel regulation was intended to put an end to. They're not
any sort of new 2012 problem, but exactly the same 1950s problem (and in NYC,
often quite literally in the same old buildings).

The problem isn't you or me renting out our apartments, but the guy in NYC
who's converting an apartment block into a full-time commercial hotel without
meeting the proper safety/health standards. So far, I think this is a minor
problem on AirBnB _except_ in NYC, where slum-hotel listings are starting to
proliferate, often dishonestly listed as if they were someone personally
renting out their private apartment (though the review system does help limit
this after the first few people are fooled).

~~~
smokeyj
"I think your dichotomy is a bit too stark"

Kids are getting their lemonade stands shut-down by cops. Traveling vendors
are getting shut-down in cities because they're competing with established
restaurants. The Amish are getting raided by feds for selling raw milk. I can
keep going if you wish.

~~~
_delirium
I agree, and I think that's why there will need to be exemptions for small-
scale independent vendors. You didn't address my point about the continuing
need for regulation of large-scale vendors for essentially the traditional
reasons, though. Does the fact that we should let kids run lemonade stands
without being hassled _also_ mean that full-scale commercial hotels in
Brooklyn should be unlicensed and not subject to health/safety inspections? On
the latter point, I don't see the situation as much different than the 1950s:
if someone is trying to convert 30 apartments in a building to a de-facto
hotel, that's the use-case that hotel regulations were put in place to
address. The new 2010s phenomenon is the person who's renting out their
personal apartment intermittently, and which current regulations are too
inflexible to accommodate. So I think a more flexible range of policies are
needed.

~~~
smokeyj
You're asking me if we should dictate to the entire population which risks are
acceptable to take. I would say there is no logical methodology to accomplish
this.

It's okay to drive a motorcycle, but not okay to buy lemonade from a kid? It's
okay to smoke cigarettes, but not okay to sell unregulated securities?

Risk should be legal and honestly disclosed. The only crime should be
intentionally misrepresenting risk -- and this can easily be done in contract.

------
seiji
What if we continue this trend of just doing technically illegal things on a
massive scale?

New sites we can make: food2u - browse local bored people with kitchens and
have them make then deliver food to you; movr - rent (unlicensed, uninsured)
people with large vehicles to transport your stuff; qwikcut - find people who
cut hair at home; friendzzzz (four Z's) - substitute someone bored instead of
a licensed home care nurse; bugoot - find people with excess bugspray to treat
your residence; talkerr - find a non-licensed person to share your problems
with instead of a school'd therapist.

I wouldn't be surprised if half of those are billion dollar companies waiting
to happen.

~~~
roc
> _"What if we continue this trend of just doing technically illegal things on
> a massive scale?"_

Judging from history: the wronged-customer stories will pile up until the
public demands some form of regulation.

Keep in mind that the laws that make airbnb illegal, are the ones that were
created as a _reaction_ to business operating in the prior regulation-free
environments. Building codes and fire safety regulations exist as a result of
a history of preventably-tragic fires and building failures. Food safety
regulations exist as a result of a litany of preventable food-borne illnesses,
ingredient fraud, etc.

~~~
seiji
Key words: _massive scale_

Regulations/rules/laws require oversight. You can fine a giant hotel. You can
verify conditions in restaurants. You can ticket illegal food trucks. Can you
stop a guy from making experimental taco flavored cereal at home then
delivering it to people who ordered it online? That's a horrible example.

The new rule of startups seems to be: We'll do what we want. You can't stop
us.

~~~
_delirium
You can't stop small-time, independent cottage industry, and traditionally
many governments turn a blind eye to it--- people selling small amounts of
baked goods and such is not a new thing, and prosecuted rarely enough that it
actually makes the news when it happens. What's new, and _is_ much easier to
stop, is centralized brokers turning at-scale aggregation of such cottage
industry into a business plan. It's hard to stop me from privately arranging
to sublet my apartment for $30/day with someone I met online, but it's much
easier to shut down AirBnB doing it with thousands of properties.

Basically I agree that the internet will change much of this, but I disagree
that there are billion-dollar companies waiting to happen, unless they get the
law to (at least tacitly) go along with them. Billion-dollar companies are
juicy targets that can't sneak under the radar in the way that individuals
can.

~~~
excuse-me
Google "cops close down lemonade stand" 165,000 hits

~~~
_delirium
That's what I mean by it being so rare that it makes news. And _big_ news...
one incident in Georgia in 2011 produced hundreds of news articles, including
in major national newspapers, significant television coverage, and thousands
of blog posts. You wouldn't expect that if cops were shutting down a dozen
lemonade stands a day.

~~~
excuse-me
Good point. Although you have to wonder how much of the ubiquitous `anti-
terrorism` web tracking is going to be used to report ebay/craigslist/amazon
to the IRS

------
mapleoin
One thing that has always puzzled me about AirBNB is that there's no mention
anywhere about taxes. All this money changing hands without being taxed sure
seems weird. Renters usually pay taxes for the rent they get, shouldn't people
doing this on AirBNB do the same?

~~~
pcopley
This is no different. The onus is on the person renting out their
property/room to declare rental income and remit the appropriate taxes.

On a side note, it breaks my heart to read "all this money changing hands
without being taxed sure seems weird."

~~~
_delirium
What's a bit gray-area about it is that unlike someone like Craigslist, AirBnB
isn't just a matchmaker, but has inserted themselves directly into the
commercial transaction as the point of sale: they, not the property owner, are
the ones who not only advertise the property, but complete the booking and
charge the credit card. Whether that means they're responsible for filing the
taxes is murky, and probably depends on which taxes and which jurisdiction.

~~~
tptacek
No, that makes it _less_ of a grey area, because Airbnb issues 1099s for the
money it disburses, and Craigslist obviously can't do that.

------
mibbitier
> "But letting people stay temporarily in unoccupied rooms or houses is the
> opposite of harmful"

Until some of those guests get murdered, raped, videocammed in the shower,
have their possessions stolen, etc etc etc.

We have regulation on this type of thing for a reason. Allowing anyone to just
suddenly decide they are now a hotel, is a recipe for disaster.

~~~
mustpax
I've first hand experienced bait and switch scams, thieving cleaning staff,
and made up fees in cheap hotels from around the world. NYC hotels are
particularly bad offenders even though they are thoroughly regulated.

If anything an AirBnB host infinitely more trackable and accountable than a
hotel you book directly or through an oblivious intermediary (travel agent).
Not to mention the countless minimum wage staff working for these hotels that
are also much harder to thoroughly vet and trust individually than a single
host.

Just because something is more familiar (hotels) doesn't mean it's safer.

~~~
adgar
Ah, the "Republican" argument: _If regulation is so great, why hasn't it been
perfect? Clearly the solution is less regulation._

~~~
mustpax
I'm not making any blanket statements about regulation, I'm simply stating
that in this particular case the safeguards provided to guests by the
structure of AirBnB's business are superior to those provided by municipal
hotel operation regulations. If you'd care to address this point directly I'm
all ears.

------
jpeg_hero
Great, allow my neighbors in my shared hallway apartment to rent out their
rooms to strangers on the Internet. Glad I am not a single female.

~~~
yen223
I'm pretty sure your neighbours can already rent out their rooms to strangers
on the Internet.

~~~
jasonlotito
Actually, more likely they cannot. Most renters contracts I've seen explicitly
forbid this.

~~~
toomuchtodo
"Heh look! Craigslist still takes my ad for my spare room even though my lease
says I can't do this!"

~~~
rprasad
"Hey look! My landlord just evicted me for leasing out my spare room in
violation of my lease!"

There is nothing stopping you from putting an ad on Craiglist. However, if you
violate the terms of your lease, you can get evicted. Moreover, these sorts of
violations are usually _not_ covered by tenant protection laws, so you would
not be entitled to the normal eviction procedure protections.

------
Spooky23
AirBNB isn't illegal -- it's analogous to the "personal services" sections in
newspapers that are almost certainly including advertisements for
prostitution.

The problem is, the people renting out their rooms on AirBNB are in many cases
violating local law, lease terms or insurance contracts. They're also in moral
hazard -- they are paying for homeowners/renters insurance while running a
roominghouse.

AirBNB's legal position has to be "buyer (ie. landlord) beware". But their
marketing position is that it's easy to cover your expenses by renting out
your apartment. That paradox is a variation of Napster's old "people are just
sharing music like they always have" line.

~~~
subpixel
One of my family members in Charleston, SC was making $30k+ annually with
Airbnb, until the city threatened her (and everyone else in town offering
space on Airbnb) with steep fines and even jail.

She chose to pull her listing, and most others in town did as well.

~~~
rprasad
Ironically, it would have been acceptable if she had used a normal VRBO
service (like HomeAway), as those services usually take care of any licensing
and taxes associated with renting out one's home.

------
hef19898
What I missed is a clear anser to the question wether AirBnB is illegal or
not. And if yes, in which countries.

The only constraint I see in Germany come from your rental contract in case
the room / appartment you rented out via AirBnB is not your own property. In
this case technically you would need the OK from your land lord. If it's owned
by yourself, you would have a legal contract with the person staying over. But
I'm not a legal expert on that.

EDIT: What puzzles me are some of the comments here. I rather expected them to
be along the line of "of course it is, WTF are you thinking it souldn't be????
And "how I like it, great product". But maybe it's just me, I really had a...
weird day today! :-)

~~~
jellicle
Hotels are regulated at the state and municipality levels, so the answer is
different in many thousands of different jurisdictions.

In most cases it isn't that "AirBNB is illegal" it's that people using AirBNB
aren't complying with all local regulations.

~~~
subpixel
Another comment makes a great point re: insurance. If a tenant burns your
house down, or floods your basement, or invites someone over who falls and
breaks their leg in your home, you may be in for a world of hurt.

------
sammyo
Does a broker of services have an explicit legal responsibility to monitor tax
issues of the clients? Wouldn't that put an absurd onus onto services like
craigslist?

~~~
Nutella2
No, because Craigslist is not a broker. They're an advertiser. AirBnB is a
broker because all the financial transactions go through them so their legal
and tax responsibilities are different.

------
gautamc
I haven't used airbnb but after reading some of the comments here, I looked up
the airbnb site to check if they have tools/features which try to address the
"I am renting to a total stranger/I am renting a strange place" issue -
<http://www.airbnb.com/safety#reputation> \- I guess these tools could be
improved/enhanced.

But, just because something doesn't follow an established pattern, doesn't
mean its illegal. It would make sense if a community decided to add a "no
airbnb" clause to their bylaws/rules - but the govt picking and deciding what
is abuse of resources and what is not doesn't sound practical - esp when the
resource usage of an airbnb unit is no different when it is rented out versus
the owner(s) occupying it themselves.

If there can be things like credit-default-swaps, I don't see why the
insurance industry should not come up with instruments for this kind of a
market - where there is a market, there must be a way.

~~~
Spooky23
The issue isn't that an unconventional pattern is illegal. The issue is that
the risk models of residential mortgages, many apartment leases and insurance
are designed for people living in a home.

That distinction is important, because people generally treat their home with
more care. And insurance/mortgages are priced accordingly.

An apartment tenant generally doesn't leave the door open or unlocked -- they
don't want their stuff to be stolen or destroyed. But a hotel guest or AirBNB
renter has no skin in the game. Have you ever worked at a hotel? People
routinely leave patio doors open or prop entry doors when they leave the room.

------
shek
I wonder what is the impact of AirBnB on rents. If landlords see that (despite
their leases prohibiting them) their renters are making money through AirBnB,
they would want to jack up rents to get a piece of the action.

