
Airbnb gears up for big legal and legislative battles in New York - danso
http://skift.com/2013/06/05/airbnb-gears-up-for-big-legal-and-legislative-battles-in-new-york/
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leelin
The comments from Senator Liz Krueger buried in the third section are very
interesting and I almost missed it!

Unlike most articles blindly debating the pros and cons of the sharing
economy, Krueger claims many hosts are professionals who arbitrage by leasing
or buying long-term apartments and filling them nightly as a distributed
hotel. It seems the money earned hosting -- (cost_of_operation * nightly_rate
* occupancy_rate) -- is greater than signing a one year lease.

I used to offer my home on weekends when I was out of town for travel.
Eventually, a guest offered to pay for the full month for significantly higher
than my mortgage payment (and I contemplated various ways to spend a month
away)! Sadly, our co-op board discussed and decided paid nightly guests
violate our policies, ending my short hosting stint.

I'm torn. I love Airbnb and have used both sides (host and guest), and I like
the idea that some people can use a space more efficiently than others. I'm
less worried about taking a rental unit off the market and more worried about
the intangible and hard-to-quantify side effects (safety, insurance, tax
enforcement, neighbors' rights, etc).

~~~
brianchesky
This is not correct, and Liz Krueger knows it since we showed her the specific
demographics of who uses our site in NY. Greater than 90% of hosts are renting
the home they live in when they are not there (primary dwelling). Simply type
NYC in search and see for yourself who is renting. You wil notice most people
with just one property. The few property groups we have switched to 30 day
rentals long ago. Liz Krueger is the author of the 2010 bill that has been the
cause of much of this controversy, so she is trying to protect her legislative
legacy.

Most of the city officials we have spoken to are actually supportive of
Airbnb, but there are a few that matter like Liz that do not.

~~~
rdouble
Toshi ruined it for everyone.

~~~
brianchesky
He was certainly an impetus for stronger action from what I can tell, but
that's an overstatement. The 2010 bill was originally drafted to target
property groups that predate Airbnb or him.

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mtrimpe
I was just discussing over lunch that I _really_ don't understand why AirBnB
doesn't just offer cities the ability to add 'tourist-tax' on top of the
AirBnB rates.

In the end it all boils down to cities not wanting to give up the revenue
stream they get from tourists, which is also reasonable since it _does_ cost
the city money to care for tourists.

I'm convinced AirBnB's position would be much stronger if they would just say
"Sure we can tax rentals at X%/$ for your city! Sign this document to give us
clearance to run AirBnB in your town and we'll flip the switch in our
software."

~~~
jessriedel
Are tourists taxes _ever_ determined by the principle of estimating the cost
of the tourists to the city? Everything I've heard about them is that they are
almost pure profit both for the city collecting the tax and for the businesses
they frequent, and the mechanism for determining taxes is basically "how much
can we charge before we significantly decrease how many people want to come to
our city and/or the local business owners revolt?"

~~~
saalweachter
Yeah, for all people talk about evil company X and "if you're not a customer
you're a product"...

If you're not a resident somewhere, you're not a constituent and the local
government has almost unlimited license to tax the daylights out of you.
Tourists don't vote, so slapping taxes on everything they buy gets the local
government revenue without alienating any voters. My favorite is that, where I
live, property taxes -- including school taxes -- are higher for second homes.
That is, if you have a weekend or vacation home, you pay more for the schools
your children will never attend, because you live somewhere else! But part-
year residents also can't vote, so from the political standpoint it's a win-
win.

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nlh
IANAL (I am not a Legislator), but it seems to me that the primary concern
from the city/state side of things is that housing is in short supply in NYC
for NYC residents.

AirBNB "pros" buy up yearly leases for $x and then sublease them out nightly
for a monthly net of a multiple of $x. In other words, it's an arbitrage -
they're taking the long-term risk of a yearly lease and gaining the short term
reward of nightly rentals by tourists, for which there is strong demand, and
which results in fewer hotel bookings and fewer apartments available for local
residents.

And, fairly enough, it also puts that arbitrage profit into the hands of the
apartment renter, not the landlord, who took the risk of putting the building
up (or managing it) in the first place.

So hotels lose, landlords lose, NYC housing consumers lose, and tourists gain
and AirBNB hosts gain. Fine.

SO: Rather than making it outright illegal, why not balance out some of the
incentives in the name of efficiency? Hosts SHOULD be able to rent out their
place when they don't live there (improved efficiency) or rent out a spare
room in a multi-room apartment (also improved efficiency), but maybe limit the
amount that can be charged to a proportion of rent they themselves pay? If it
stops becoming a profit center then you remove the big incentive that "pros"
are going for -- sopping up available units and using them solely for
tourists. If my lease for an apartment is $3000/month, the max I'd be allowed
to charge is $100/night.

It would change the dynamics quite a bit -- now there's zero incentive for a
"pro" or landlord to go rent dozens of otherwise available apartmens to use
for tourists. In fact, the landlord would go right back to preferring long-
term lessors. Rather get an easy, single check per month than dozens of small
and unguaranteed checks.

It would remove the profit incentive of regular hosts but still allow the
rent-offset incentive.

However, it would make WORSE the imbalance between AirBNB and hotels, and
demand for airbnb would increase (and supply would decrease because of fewer
hosts). That said, it's not a bad thing. It would be real competition for
hotels, and rightfully so -- that's AirBNB's job and the disruption they're
causing. And more competition and lower prices for everyone is a Good Thing.

I'm sure I'm missing some untended consequences here, but perhaps it's a
start...

~~~
dragonwriter
> Hosts SHOULD be able to rent out their place when they don't live there

People who own or lease space that they don't live in _can_ do that. Of
course, there are a whole set of regulations they have to comply with if they
want to with regard to the condition, safety features, etc. of the premises
they are renting out, its zoning, notice provided to those renting, taxes,
etc.

Hosts that at least purport to comply with these regulations are known as
"hotel operators".

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ahtomski
They also have the problem of special cases who list in airbnb but are
actually professional bnbs/pensions/small hotels etc. who use other commercial
listing sites. They're probably on top of their tax vs. amateur users (their
spare room is not a sole income stream) who are taking some of that market and
heck cities can't lose that cut of tourist/hotel taxes.

~~~
potatolicious
I think the greatest problem facing AirBnb is that the "special cases" of
people renting their properties out professionally is increasing.

Just like how eBay started as a place for people to get rid of old crap, and
then evolved into a marketplace dominated by professional sellers.

In the early days AirBnb can rely on some populist good will - they're helping
vacationers fill apartments, they're helping the broke college student crash
in a spare room, etc. But as the professional listings increase this story
becomes less and less relevant, and the more parallels can be drawn between
them and traditional lodging, which makes legal and PR liabilities more and
more pressing.

I've stayed in 3 AirBnbs in the last year or so, and every one of them are
"professionals" - i.e., they rent the space out full time as a substantial
portion of their income.

~~~
angerman
So following along with that eBay comparison, would forcing hosts to be
classified in professional (power seller) and private solve this issue
sufficiently? Not sure how you'd detect false positives?

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46Bit
Does anyone know of public research into the makeup of rooms on AirBNB,
specifically rooms/house and so forth?

I feel there's often a lot of AirBNB-only properties listed but I'd prefer
some actual numbers. If needs be, scraped myself this weekend :-)

