In case you don’t know what Airbnb is, it is basically a network of people with houses and apartments to rent. Airbnb brings those people together with other people who want to rent a cool place out for a short term. They work out the prices between themselves and Airbnb gets a cut. Voila…a great new industry is born on providing a service the world needs and evading the government regulations that crush regular hotels and most all businesses.
Here is what the Airbnb website says about what they do: “Founded in August of 2008 and based in San Francisco, California, Airbnb is a trusted community marketplace for people to list, discover, and book unique accommodations around the world — online or from a mobile phone or tablet.
Whether an apartment for a night, a castle for a week, or a villa for a month, Airbnb connects people to unique travel experiences, at any price point, in more than 34,000 cities and 191 countries. And with world-class customer service and a growing community of users, Airbnb is the easiest way for people to monetize their extra space and showcase it to an audience of millions.”
They boast more than 2 million listings allowing property owners to profit from an otherwise empty home or condo. Pretty impressive run for an idea less than ten years old. As I did a little more digging I discovered a few unintended consequences of the peer-to-peer marketplace model. Some of them being: tax evasion, breaking local and state renting laws, increased property values, and some very pissed off neighbors! Oh don’t forget that nasty little problem with the Porn Industry either.
The traditional hotel industry is among the most heavily regulated and burdened of all industries. Have you ever looked at your bill after a stay in a hotel? It’s a laundry list of taxation! Airbnb, not so much. It would be great if we could remove some of that burden from the lodging industry, but good luck removing a tax. Airbnb is flying under the radar for now, but they will only dodge the taxman for so long.
Also, Airbnb homes have been found to be in violation of an assortment of local and state rules and regulations. For example, in New York since 2010 it is illegal to rent your entire apartment for less than 30 days. Airbnb homeowners and many landlords have not complied with the rule.
Some feel as this form of short term rental property grows in popularity it will remove more and more units from the traditional yearlong lease system and limit options for renters. Other property owners are passing neighborhood covenants to outlaw short-term renting entirely in their neighborhoods under the premise that it will lower their property values and cause disturbances. For example, a large group of teens pool their resources and rent a lake house for a wild weekend party. Airbnb is there to serve.
The porn industry is also using Airbnb as a great way to find cheap film sets away from the creeping eyes of government. However, the owners of the homes almost never know their home was the scene of a XXX Freak Fest!
Despite all of these transgressions, Airbnb is currently enjoying great popularity. Airbnb is thriving outside the law. Interestingly enough, virtually all of the Airbnb leadership are former liberal Democrats from the political ruling class. It’s almost as if they knew exactly how to get around the laws they helped create. Names like Eric Holder (Former Obama Attorney General), David Harman (Former Charles Schumer Chief), Chris Lehane (Former Bill Clinton Campaign Manager), Bill Hyers (NYC Mayor Bill DeBlasio Top Aide), are all connected with the upper management of Airbnb.
Airbnb is happy to operate outside of the laws that govern other lodging businesses, and they’ve found just the right sort of people to help keep it that way.