
Homeowners Use Airbnb to Dodge Foreclosure - brianchesky
http://www.bloomberg.com/news/2010-07-18/homeowners-use-airbnb-room-renting-site-to-pay-mortgage-dodge-foreclosure.html?utm_source=twitterfeed&utm_medium=twitter
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carbocation
Unsurprisingly, using residentially-zoned space for commercial purposes is
profitable. Don't most full-time bed-and-breakfasts have to get licensed? (I'm
assuming that making $4,500/month implies being nearly full-time; maybe I'm
wrong.)

To me, this seems fine when rare. So let's say I rent out a room once a month
or something along those lines - no big deal. If I'm treating it like a real
b-n-b, though, it seems like I'm engaged in some real commerce that is
probably regulated. Presumably Airbnb behaves agnostically on this issue,
allowing the responsibility to fall to the property owner?

I'm delighted for the specific homeowners being discussed here, but concerned
about the general case.

~~~
hugh3
Sydney used to have a problem with unscrupulous entrepreneurs who would (say)
buy up a bunch of three-bedroom apartments in a fancy inner-city building,
stuff sixteen beds into it, and rent the beds out to foreign backpackers for
(say) fifteen bucks a night. For the backpackers, it was better than the
regular hostels, and for the owners it was a license to print money, but for
the other residents of the building, who would find the pool and gardens
filled with drunk poms at all hours of day and night, it was pretty annoying.
Eventually I think they came up with some new law to stop it.

Anyway, if airbnb is smart they should try to stop people from abusing their
system by trying to set up pseudo-hotels, since it's these people who are
going to bring down the regulatory hammer on the entire system.

~~~
starkfist
"Hotel Toshi" in NYC does exactly this. The fact that the guy is operating
somewhat high-profile and attracting attention to himself is probably what
brought knowledge of this problem to the NYC media and regulators.

<http://ny.curbed.com/tags/hotel-toshi>

<http://www.airbnb.com/users/rentals/8194>

<http://www.myspace.com/toshifilms>

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patio11
Airbnb is amazing at PR. See their interviews for examples, but in general
they've got a wonderful sense for spotting a narrative the media cares about
and inserting themselves into it.

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oldgregg
New York can go fuck itself. It's insulting to the people that in a time of
economic turmoil the politicians are still taking big fat campaign checks from
the hoteliers and passing arbitrary bullshit laws that dick people over who
are trying to make ends meet. Who the fuck do they think are to even suggest
they can come into my home and tell me how "sanitary" it is?

Sorry for the rant, but this is industry after industry, entrepreneurs like
AirBNB try to create efficiency and wealth and the establishment comes along
and buys off politicians to eliminate the competition.

Democrats hate corporations, Republicans hate the government. Or maybe they
just pit us against each other while they all laugh their way to the bank.

~~~
patio11
If you feel strongly about this, you might want to read Cato regarding
licensing for e.g. cosmetologists and taxi drivers. It is the same story --
pretexts about the public safety justify anti-competition laws, whose effects
are felt mostly by poor would-be entrepreneurs and the communities who they
can't legally service.

~~~
carbocation
The taxi thing seems totally like a pretext, but cosmetologists engage in a
lot of quasi-medical stuff that seems reasonable to regulate. Perhaps I'm
mostly thinking of spas and their ilk, and honestly I'm probably mostly just
thinking about the rise in community-acquired MRSA (which, to be fair, has not
been shown to be driven by cosmetological practices at this point).

~~~
kiba
Is it really necessary for the government to regulates?

Why not have voluntary associations that people can join but have rules on
business? If the organization have honest inspectors, their reputation will
show. Businesses will pay for that kind of exclusive brands. Risk-averse
customers will flock to it.

If you have an organization that everyone must join by law to practice certain
field, then it could be a breeding ground for corruptions. The government is
now intertwined with a professional organization, and then create an illusion
of safety which none shouldn't exists.

Associations that has been around for years will have more trusts than new
associations that pop up. The new associations will then prove that they're
not kooks that been rejected by incumbent associations.

~~~
Confusion
_Why not have voluntary associations that people can join [..] their
reputation will show_

This is an illusion. Are you going to check with what association your taxi
driver is registered and have you done the necessary research upfront to judge
the credentials of the association? If a taxi stops and it's from the 'wrong'
association, but you know it's relatively cheap, are you going to send it away
and wait for the next one?

Especially services that an individual uses only very infrequently, such as a
taxi, can get away with very poor performance. The businessman will tell
everyone that the taxis in StateCapital suck, but a few months later, when
he's there again for a one-off trip, he will have forgotten the name of the
taxi service that rendered him such a bad service last time. However, commerce
in StateCapital is harmed by all the gossipy remarks concerning one of their
taxi services (which are remembered as concerning _all_ taxi services in the
city). Requiring taxi drivers to be licensed and checked on by the government
could very well be a net advantage for all commerce in StateCapital.

~~~
asmithmd1
Do you check to see if electrical appliances are UL listed?

UL is private company that sets safety standards and tests products that
manufacturers voluntarily submit for (and pay for) testing.

Does a small mid-west town have the resources and and expertise to inspect the
traveling carnival rides to insure they are set-up properly? Or does the
carnival's insurance carrier handle that responsibility?

There are private replacements for coercive regulation that are not
theoretical but are actually working.

~~~
Confusion

      UL is private company that sets safety standards and tests products that
      manufacturers voluntarily submit for (and pay for) testing.
    

Why do these manufacturers do that? Perhaps just as a lawsuit hedge: they can
always claim to have been 'certified by the _de facto_ testing standard', in
which case it's the reasonable expectations laid down by the law that drive
the interest in this 'independent' testing. I.e.: the government.

Another explanation is that large brand A initially wanted to distinguish
itself as 'the safest' and brand B just followed the lead so it didn't seem
less safe. When they control a substantial part of the market, others will
soon follow. After that, the actual contents behind the logo don't matter
anymore. It's a perception-driven protection racket, the actual value of which
cannot be determined by consumers. But it doesn't even matter how it comes
about: after most of a market sports a certain logo or association, what's to
stop that organisation from growing lax and pleasing their clients? There is
hardly any room for competition in that market: who's going to start a UL
competitor and why on earth would a brand be interested?

Or, the more fundamental question: who tests the testers? How do you know the
UL is not theoretical and actually working? Even the government suffers from
corruption; I doubt such companies are any better.

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starkfist
There is one high profile illegal hotelier in NYC who is probably solely
responsible for all the media attention and ruining it for everyone else:
Hotel Toshi. He's a wannabe actor who was the asian chippendale gag on Conan a
few years back. The guy even advertises for cleaning staff and has his own
vans and trucks painted with his logo. I found AirBNB unusable in NYC because
half the listings were from Hotel Toshi.

<http://ny.curbed.com/tags/hotel-toshi>

<http://www.airbnb.com/users/rentals/8194>

<http://www.myspace.com/toshifilms>

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rbanffy
Shouldn't banks be lobbying against legislation like the one passed in NYC? If
it helps people to pay mortgages, it's their best interests, right?

~~~
hugh3
The total amount of money, as far as they're concerned, is probably less than
it takes to buy one lobbyist lunch.

~~~
rbanffy
But since they have lobbyists on payroll, I assume there would be no need to
secure extra funding.

~~~
hugh3
Yes, but their lobbyists are working hard on other things, like the complete
damn re-regulation of the entire financial industry, at the moment. Whether a
handful (hundreds?) of extra mortagees go into foreclosure isn't a big deal
for them.

~~~
rbanffy
Oh, but it would picture them fighting for the small guy. That's something
representatives like. It would be far easier to de-regulate an industry that
fights for the small guy, wouldn't it??

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mattmaroon
If I were AirBNB, I'd be sending this to whichever organization coordinates
lobbying for the lending industry to fight the law against this sort of
activity. Mortgage lenders have a serious interest in having their customers
pay mortgages, if this sort of activity helps them they'd be fools to not
support it.

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ck2
What's funny is how many people in America think (large) corporations =
capitalism.

But in reality what these enterprising homeowners are doing is real
capitalism.

So politicians are protecting the former (corporations) and destroying the
latter

\- they are actually working against capitalism!

~~~
joshuacc
If we're being technical, capitalism != free market, though the terms are
often used interchangeably. Capitalism means the rule of those with capital
(in this instance, corporations) while a free market is a system which
guarantees the free exchange of goods.

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sliverstorm
Those bastards! How dare they dodge their foreclosures and stop us from taking
their houses!

~~~
daychilde
I think that's rather missing the point entirely.

