
A Warning for Airbnb Hosts - trauco
http://www.nytimes.com/2012/12/01/your-money/a-warning-for-airbnb-hosts-who-may-be-breaking-the-law.html?adxnnl=1&ref=business&adxnnlx=1354308572-sY0RIzG7wP4CCeFvUF24Pg
======
goodcanadian
The rules serve a lot of purposes:

1\. To protect hotel owners and operators.

2\. To protect consumers. They are guaranteed that the hotel has proper
insurance, for example.

3\. To protect neighbours. You can't open up a hotel in the house next door
for much the same reasons that you can't open a pub or an aluminum smelter.

4\. And yes, there is some rent seeking behaviour. I'll just mention transient
accommodation taxes.

You may agree or disagree with the various laws to various degrees, but you
must admit that they exist for a reason. By all means discuss reforms that can
be made, but please stop with the "these laws are stupid" or "serve no
purpose" sort of sentiments.

~~~
Permit
>You may agree or disagree with the various laws to various degrees, but you
must admit that they exist for a reason. By all means discuss reforms that can
be made, but please stop with the "these laws are stupid" or "serve no
purpose" sort of sentiments.

How about this: "These laws do not exist in most places and those places
haven't descended into anarchy, nor have they suffered any visible damage
because they don't have them. Therefore it might be reasonable to suspect
these laws aren't needed".

~~~
tomkarlo
Except they do exist in most places, in one form or another. Can you point to
some places that don't require hotel operators to submit to some kind of
licensing / regulation?

These laws aren't new - UK lodging laws go back several hundred years.

~~~
malandrew
If they go back several hundred years then they probably have more to do with
rent-seeking than consumer protection, and if that is in fact the motivation
for their existence, then they should be eliminated.

~~~
tomkarlo
Are you saying that based on any fact, or just a personal bias? Do you have
any familiarity with fire laws or lodging regulations?

------
tptacek
I have zero sympathy _at all_ for renters facing eviction for housing Airbnb
tenants. Those renters aren't being bitten by outdated regulations. They
signed a contract that spelled out their obligations to the owner of the
building, and the boilerplate version of that contract says that you can't add
tenants (or replace your own obligation as a tenant during the term of the
lease) without the owner's express approval.

I _love_ Airbnb. I have had nothing but good experiences with them directly
and I hope they succeed beyond their wildest imaginings. But if you're a
_renter_ , not an owner, and letting your place out on Airbnb without checking
your lease, you've reneged on a contract. Not a shrink-wrap or click-through
or EULA, but an ink and paper contract that every tenants rights group in the
country tells you to read carefully.

The one time I've been in civil court ever was with a landlord; I have had
nothing but _bad_ experiences with landlords and think poorly of virtually
every one I've had. But the flip side of that is, if I expect landlords to be
compelled into making repairs or returning security deposits, I have to hold
up my end of the contract as well.

Airbnb shouldn't have to warn renters to read their damned leases.

~~~
mamoswined
I'm really curious if there is a difference legally between giving the entire
apartment to a guest for a week and letting the guest sleep in a spare
bedroom.

~~~
tptacek
If you read carefully, a lot of leases have specific clauses about guests too.

There are limits in different jurisdictions about how enforceable some of
these clauses are. But subletting contracts tend to hold up.

~~~
malandrew
Can you loophole around it by renting out someone else's apt and having them
rent out yours on a quid pro quo basis?

This means that the person staying in your home is not a friend of a friend
and no longer a customer. It ceases to be a sublet, and is now you housing a
friend's friend.

Intent is there. But it gets you off the hook for breaking the contract. It
instead puts you on the hook for inducing someone else to break a contract,
which is a harder case to prove.

------
kbutler
This is especially ironic in light of the post-Sandy NYC-AirBnB "partnership":

"Mayor Michael R. Bloomberg and Airbnb today announced the launch of a new
platform to help connect victims of Hurricane Sandy with free housing options.
Airbnb is now providing a platform to connect those who are eager to offer
free housing to those who have been displaced by the storm."

[http://www.nyc.gov/portal/site/nycgov/menuitem.c0935b9a57bb4...](http://www.nyc.gov/portal/site/nycgov/menuitem.c0935b9a57bb4ef3daf2f1c701c789a0/index.jsp?pageID=mayor_press_release&catID=1194&doc_name=http%3A%2F%2Fwww.nyc.gov%2Fhtml%2Fom%2Fhtml%2F2012b%2Fpr401-12.html&cc=unused1978&rc=1194&ndi=1)

~~~
Zimahl
I don't see any irony. Allowing someone to stay in your home as a guest is not
the same as being paid for lodging. If AirBnB was there to facilitate people
to open their homes for non-paying guests, none of this would be a problem.
Although renters who rent out rooms outside of their landlord's permission are
just asking for an eviction.

~~~
jvm
That was very much not the idea. People renting their apartments were in
charging.

------
ChuckMcM
An interesting story. What is more interesting is that it sets up the entire
game.

Cities cap rents in an effort to rein in rapacious landlords, this 'traps'
money in the system (whenever you artificially price something you open up the
possibility that there is demand in excess of supply). AirBnb figures out a
scheme to liberate that trapped money by enlisting the folks who are
benefiting from the cap (tenants) at the expense of the folks who aren't
getting the money (landlords).

So it is totally in the selfish interest of landlords to hire a third party,
have them avail themselves of the service at any building where the landlord
has tenants and such a service is in violation of the rent, and then to use
the resulting lease violation to evict the tenant, allowing rent to rise and
then capturing the money for themselves.

Its really really really important to read your lease. Seriously.

~~~
mc32
I wonder if there would be a new hotelier who might emerge who builds 'hotels'
solely to rent out rooms via ABB to avoid some of the regular hoteling
regulations.

~~~
001sky
Yes--this is already happening. Entire apt blocks (say 6 -12 units) set up to
short-term-lease. The next-door property owners hate this (ie, short term =
vargrants, if you are a snob) that is why they lobby for 30 day min-stay laws
on sublets.

~~~
mc32
Interesting. I imagine if courts decide that ABB+lessors do not run afoul of
housing/renting regulations and establish some precendence, it might make
economic sense for someone to build an ABB hotel where only people booking via
ABB and its decendats are booked, thus avoiding the regulation which runs up
the price of other hoteling models.

~~~
anigbrowl
That's unlikely to happen. There are extended-stay hotels for people who come
from out of town to work temporarily and that are often paid for by the
employer or a corporate client - they're basically little studio apartments
with some extra services laid on for the convenience of the residents. To the
extent that they're liable for hotel taxes or regulatory fees, the principle
of equal protection under the law would require an ABB hotel to be be
similarly liable.

------
wwkeyboard
My biggest problem with business models like AirBnB and Uber are that they
don't solve the inefficiencies in the existing industry. Instead They transfer
the risks inherent in the operations of those industries from businesses who
understand, and therefore price according to, those risks, to individuals who
don't. When the downsides of those risks happen, as in the case of the OP, the
individual, who didn't understand or price according to that risk, is screwed.
This is no different than the businesses who sold sub-prime mortgages to
people who couldn't afford them, and then turned around and passed that risk
off as bundled investments.

~~~
chockablock
> they don't solve the inefficiencies in the existing industry

I disagree. To use some examples given in the original article: how about a
guest being able to rent a room in a neighborhood that doesn't have any
hotels? Or a host being able to earn money renting out an apartment that would
otherwise sit empty?

Which is not to say that your other points about pricing and risk are not
valid, of course.

~~~
wwkeyboard
Sometimes, but we don't know why there aren't rooms in those neighborhoods, or
apartments sitting empty. If it's a genuine attempt to remove inefficiency,
thats one thing, but an attempt to "beat the system"(the first part of
sentence that talks about the empty rooms and location) may circumvent
legitimate rules. For example HOA rules about subletting.

------
rm999
Five figure fines are completely unreasonable, the fault lies with NYC and the
hotels who lobbied for these laws. Short-term housing is really bad for a city
whose economy benefits so much from tourism; tiny hotel rooms start at
250/night. Airbnb is a really optimal solution.

My neighbor is an airbnb apartment. At first it bothered me that new people
were staying there every week, but I realized the benefits. The people who
stay there are always quiet and respectful, and I know the place is cleaned
regularly (no rats/cockroaches coming from there). I think it works out well
for my landlord too.

~~~
tomkarlo
Lodging laws aren't there just to protect hotels. They exist to protect
consumers and residents as well by setting standards for safety, etc. and
helping pay for the services provided to guests by the municipality.

If you take AirBNB to its logical conclusion, you end up with landlords
renting apartments on AirBNB instead of to actual residents, because they can
make more that way -- because they're ducking the rules on offering commercial
lodging, not paying for proper insurance, not paying taxes, etc.

I'm sure if someone ran a hotel but didn't bother with commercial fire codes
and local taxes, they could charge less too.

~~~
baddox
> Lodging laws aren't there just to protect hotels. They exist to protect
> consumers and residents as well by setting standards for safety, etc. and
> helping pay for the services provided to guests by the municipality.

That sounds very naive, and is extremely difficult to believe, unless hotels
played no role in advocating the regulations. Besides, if that were the
purpose, then why not ask the Airbnb renter and occupants if everything was up
to their standards, and if both parties were happy (which is presumably the
case, since most Airbnb transactions are presumably voluntary), drop the
charges?

~~~
jlgreco
Exactly. _Of course_ the regulations are worded and advertised as being about
"consumer protection", what could the alternative possibly be? There is no way
in hell a hotel lobby would write a law that plainly claimed to be for the
protection of their interests.

When laws protecting Taxi monopolies claim to be for consumer protection,
nobody here buys it. Those laws are for the protection of Taxi companies and
unions. These laws are more of the same.

~~~
tatsuke95
>"When laws protecting Taxi monopolies claim to be for consumer protection,
nobody here buys it."

If I rent a room from you, and stick my hand in your meat grinder, who gets
sued? Are you personally insured against such events? Is your landlord insured
against temporary tenants?

These aren't unsolvable problems, but are why the laws exist as they do. The
hotel pays money for insurance, which protects the consumer. Most AirBnB hosts
don't, and that gives them a competitive advantage achieved by someone along
the line breaking a law.

~~~
jlgreco
I am not claiming that there are not legitimate issues with consumer
protection to be considered. I merely find the idea that those laws which on
the surface claim to be for that were drafted and enacted with that motivation
to be incredibly unlikely. Hotel lobbyists and their politicians were not
_actually_ concerned for the consumer. They just claim that; what else could
they possibly claim?

If Walmart could figure out a way to make a law banning local businesses look
like it was for consumer protection, they would attempt it in a heartbeat.
Consumer protection is how you sell corporate protection laws.

~~~
tatsuke95
Personally, I find it no different than not being able to drive a car without
insurance. That protects me and other drivers, and I don't think it's an
"insurance lobby" agenda (although we battle with that too).

~~~
jlgreco
Fair point, but I think it is important to keep in mind that consumer
protection laws often (Always? ..no, probably not always.) have ulterior
motivation.

We have to be willing to consider putting things called "consumer protection
laws" on the chopping block. Calling these things "consumer protection laws"
affords them more protection than they may be deserving of, because who
doesn't like protecting consumers? It just sounds like a great thing to do.

Calling your law a "consumer protection law" is (or rather, can be) basically
a more advanced form of naming your law cleverly enough that it forms a
"patriotic" acronym.

------
woah
I'm wondering if anyone can illuminate us on the ostensible purpose of these
types of regulations. I'm assuming it's to maintain some sort of control and
regulation over those who would establish unlicensed hotels on a commercial
scale? For the welfare of the guests I suppose?

I imagine in a world before the internet, this kind of thing was actually
quite necessary. It would have been much harder to know any sort of details
before booking a room in the night in a particular city (I don't know, I was
born in 86). I'm guessing hotel regulations were written to maintain a
baseline of quality, and regulations like the one this guy was fined under
were written to keep people from getting around them.

Similar to the regulations on driving people around for money that Getaround
and others are being fined for, to keep you from hailing a cab driven by a
drunken, unlicensed cabbie.

At this point, though, it mainly seems that entrenched players like hotels and
taxi companies are seeking rent.

I love the quote from the SF landlord at the end, celebrating the fact that
infractions like these can be used to evict tenants and raise rents. We love
you too, Ms. New.

~~~
maratd
> I'm wondering if anyone can illuminate us on the ostensible purpose of these
> types of regulations.

Adam Smith is useful here. All regulation is created on behalf of business
interests and is justified through the public interest.

Business Interest:

If everybody rented extra unused "space" and the market was fluid, this would
substantially impact the profitability of the hospitality industry.

Public Interest:

Who wants to live next to a hotel?

###

If you want the laws to go, you'll need to build a larger business
constituency for lobbying and then convince the public that their private
property rights are being violated. Two step process.

~~~
anigbrowl
_Adam Smith is useful here. All regulation is created on behalf of business
interests and is justified through the public interest._

That is not what Adam Smith says. His argument that regulations _proposed by
men of business_ should be closely scrutinized, since those proposals are
almost always meant to further the interests of the business owners rather
than the public. He does _not_ assume the same of regulation in general, and
is much more sympathetic to the interests of households and laborers than is
commonly supposed.

 _convince the public that their private property rights are being violated_

You don't have a property interest in a tenant lease whose terms you choose to
violate. Note from the article that it's perfectly OK to let your spare room,
as long as you yourself are there to take responsibility for the behavior of
your guests.

~~~
maratd
> His argument that regulations proposed by men of business should be closely
> scrutinized

All regulations _are_ proposed by men of business.

> Note from the article that it's perfectly OK to let your spare room

If you read the article, which mostly speaks about NYC, you'd know that's
_not_ OK. You're not permitted to lease any property for less than 30 days.

~~~
warfangle
> All regulations are proposed by men of business.

Was Ralpha Nader in any way connected to seatbelt companies when he proposed
seatbelt and safety laws for automobiles?

~~~
maratd
Seat-belts were invented more than a 100 years before they were mandated by
the government. They were available as options on Ford vehicles more than 25
years before they were mandated by the government.

I'm sure the seat-belt manufacturers had nothing to do with them becoming
mandatory, right?

Remember, I said regulation requires two components. A business interest with
money to "grease the wheels" of government and a public interest component
that convinces the public that it's wonderful for them. The seat-belt
manufacturers provided the former, Mr. Nader the later. There doesn't need to
be direct cooperation. Merely the presence of both.

Not that seat-belts don't save lives, they certainly do, but don't kid
yourself ... there is always somebody who wins and somebody who loses with
each regulation passed, somebody who makes money and someone who loses just
smidgen of their liberty.

Again, read Adam Smith.

------
jrockway
Today, I crossed the street in the middle of the block because it was more
convenient than walking to a corner, waiting for the light, and then
backtracking along the other side of the street. This is illegal, but I did it
anyway because the reward was higher than the near-zero risk that I would get
in trouble for doing it.

People that run illegal hotels are doing the same thing: for every million
guests, one guy gets a $45,000 fine. That works out to 4 cents per guest,
which is a risk most people will take without thinking.

~~~
duked
Your reasoning would be "ok" if Airbnb would absorb the cost of the fine. The
problem here is that all the illegal part is done by the airbnb customer who
offers his short term rental on the site and he is the one who has to pay the
fine if any.

~~~
tomkarlo
It's like if made an navigation app that tells you all the best places to
jaywalk (and sold it to you), but failed to tell you that it's likely to
eventually cost you $150.

~~~
anigbrowl
Or jail time, as in the case of an SF cyclist who was an avid competitor in
Strava's ap comunity:
[http://blogs.sfweekly.com/thesnitch/2012/06/chris_bucchere_c...](http://blogs.sfweekly.com/thesnitch/2012/06/chris_bucchere_cyclist_who_kil.php)

~~~
jrockway
Uh, he killed someone. That's just plain negligent.

~~~
anigbrowl
It's criminal because he disregarded traffic signals (I believe he recently
pleasded guilty BTW). It's also negligent when he gets sued by the decedent's
relatives in civil court.

That's not the app's fault, but it's not the only case where people have got
into accidents because they were pursuing the status of fastest rider on a
particular route. Where rewarding people (even intangibly) encourages them to
push up against the limits of safety/legal restrictions, there's an argument
for proximate causation, eg 'but for Appmaker's reward of an exclusive title
(King of the Mountain) to the fastest cyclist on that stretch of road, Cyclist
would not have habitually ridden at such high and dangerous speeds.'

It's not a million miles away from prosecuting people for organizing street
racing: [http://twitdoc.com/upload/onaccel/san-diego-illegal-
street-r...](http://twitdoc.com/upload/onaccel/san-diego-illegal-street-
racing.pdf)

~~~
tomkarlo
It's the app equivalent of a "cannonball run" - a race to see who can get from
point A to point B as fast as possible. Unless you have some way to ensure
participants obey traffic regulations (and I don't think anything exists at
present), if you base winning on minimizing time you are arguably inducing
people to break rules, since that's almost mandatory to win.

There's still some rallies around that run on public streets, but usually
winning is based on _matching_ some target time, rather than having the
shortest time overall.

------
otterley
I am an attorney, but this is not legal advice.

The reason Airbnb isn't providing (and are unlikely to provide) legal warnings
to its prospective hosts is that instead of being on the hook for one
potential legal violation (N.Y. MDW. Law section 304(1)(a)), they'd be on the
hook for two.

Advising hosts to obey the local laws in its jurisdiction is pretty harmless.
Advising hosts what the law is, on the other hand, could be construed as the
unauthorized practice of law, and could get Airbnb into even more hot water.
See, e.g., N.Y. Judiciary Law section 495.

------
colevscode
This article presents a false dichotomy:

"Could you afford the kinds of fines that Mr. Warren was facing? If not, take
your listing down."

This assumes that a majority of hosts are breaking the law. Yet early in the
article the author claims:

"...he was breaking the law. And that law says you cannot rent out single-
family homes or apartments, or rooms in them, for less than 30 days unless you
are living in the home at the same time."

I've stayed at roughly a dozen AirBnB listings, and only once was the host not
living in the home during my stay. In fact, as the article mentions, that's a
big part of the AirBnB guest experience-- interacting with the hosts.

Perhaps the problem is that many hosts are treating their homes as small
hotels, letting out all the rooms and moving themselves elsewhere. Curtailing
this practice would avoid legal issues and improve the guest experience. A
win-win if you ask me!

------
aba_sababa
Was this paid for by hotel interests? I'm really trying to understand the
depth of PR in the news.

~~~
bcoates
The NYT does have a hate-on for AirBnB. I'm not sure if it's because it's
stepping on some toes that have influence there or if they're just not
glamored by the new tech aspect like everyone else.

Or maybe AirBnB is similar enough to craigslist and newspapers hate craigslist
because it killed print.

~~~
danso
What's with the need to see a conspiracy in everything? Is it so hard to see
how housing laws, which NYC residents LOVE when it comes to rent control and
tenant rights, inherently conflict with the freedom for a renter to rent out
the apartment for a profit?

I'm all for critical thinking, but not when it flouts occam's Razor just for
the hell of it.

~~~
aba_sababa
I agree in theory, but PG posted some pretty damning stuff about the reach of
PR in the news, and I want to know how far that reach goes down. In this
article, the author specifically says, "yo, you shouldn't airbnb."

That's a bit more than just reporting the facts.

~~~
bcoates
Hometown bias against a weird foreign service contrary to local norms is a
pretty reasonable explanation. Sometimes I forget what the NY in NYT stands
for :)

------
beatpanda
This is why trying to commodify sharing is a bad idea.

CouchSurfing > AirBNB, Hitch hiking > Zimride, Sidecar, etc.

There's still no enforceable law against generosity.

~~~
izak30
Lots of places have laws about soliciting rides by the side of the road
though.

------
Turing_Machine
So AirBnB is supposed to know the laws of every single city/town/village/condo
or home owner's association, or does this guy think New York is "special"?

~~~
trauco
Answer from the article: "Perhaps it isn’t reasonable to expect the company,
which believes it’s worth at least $2 billion according to a TechCrunch report
on its latest fund-raising efforts, to track down every zoning law in tiny
vacation hamlets. But it can certainly make the rules clear in urban areas
where it knows that people like Mr. Warren could easily end up in hot water."

~~~
Permit
If Airbnb started providing warnings about laws in various cities, wouldn't
the lack of a warning for another area suggest there were no legal issues
there?

This seems like something you can't half-ass.

~~~
sliverstorm
In other areas, you can simply swap out the "This is Illegal" disclaimer with
a "This might be illegal in your area, we don't know"

~~~
konstruktor
I really hope that your are right. Everything else would be a very perverse
incentive.

------
fmitchell0
This actually seems like an avenue for revenue for municipalities who have
budget shortfalls.

Create short-term, non-complicated licenses that expire after a couple of
days. Require signature of surrounding neighbors. Charge $25.

I can see that being good to the coffers.

------
cominatchu
The law here clearly needs to evolve, and probably should have evolved by now.
AirBnb wants to keep people safe, as it's in the best interest of their
business. Some purposes of the law are also to keep people safe, but we need
to revisit protectionist laws that restrict renting out parts of your home to
others solely to protect hotels, and the fact that Airbnb has made it much
safer to rent out your home (you can see people's reputations online, their
social networks and who they know, Airbnb provides insurance, etc) means that
some of the old laws aren't needed.

What is clear to me is that this sort of spot enforcement is a waste of
taxpayer money and doesn't serve to help anyone. I hope we can work towards
real legal reform as companies like Airbnb and Uber drive innovation in our
cities.

------
weisser
A family member owns a condo that I considered suggesting they put on Airbnb.
Then I thought about how other condo owners currently have a conniption fit
when they think people (guests) are getting access to the building that
shouldn't. I cannot imagine the amount of hell that would be unleashed if they
saw so many random people coming and going. Even if there was nothing in the
bylaws I could see them causing my relatives massive headache.

Conversely, the entranceway door to a condo is a security feature that all
owners have a shared responsibility for. If I was one of the other owners (or
even a renter) how would I feel about another person renting their condo out
on a nightly basis to anyone willing to pay for it? I'm pretty torn on the
issue.

------
cdixon
This follows a classic pattern. Incumbents once argued that having a 3rd
wireless carrier per city was a threat to the public:
<http://cdixon.org/2012/10/10/regulatory-hacks/>

------
at-fates-hands
They should know which cities they've had issues with and let their user know
so they can stay informed. Having their users post warnings about particular
cities would benefit everybody.

Nothing is going to change unless a large class action suit is brought against
Airbnb. I can tell you right now their site disclaimer won't help them in a
court of law.

~~~
tjic
> They should

why?

------
jash
As an airbnb host and user for more than 2 years, I would just like to say
that I find Airbnb to always accessible and thorough in all matters related to
my experience. They have taken the measure to have insurance in which to
protect those renting out. I do not expect them to keep me abreast of laws
ordinances in my neighborhood as that is my due diligence. I have been
completely thrilled with my experience and recommend it to others.

------
caw
I just got my electric bill from the city of Austin. On the newsletter, they
mentioned that short term vacation leases ("vacation rentals by owner")
require a license from the city. There's also a license for longer term
rentals, but basically in Austin if you're going to rent your place (it sounds
like Airbnb included), you need to get this license.

------
001sky
_His complaint with Airbnb remains, though. “They need to start being a little
more responsible and acknowledging what happened and providing a warning to
users,” he said. “They’re in some kind of fight with the cities, and the users
are paying the price.”_

\-- Says guy who doesn't care/read what he signs?

------
tabuchid
"unless you are living in the home at the same time." What are the conditions
for living in the home at the same time? What if my roomate is out of town and
I'm the role of the host? Can the room still be rented? Does leaving for a few
days really mean that I'm not living in the home?

------
patmcguire
Situation: If you have a roommate, since it's only illegal if you're not
living there, can't you just have your roommate be the official leaser while
you're out of town and pay you unofficially?

