Airbnb has said that it was willing to crack down on individuals in New York City who rent out multiple homes, bowing to pressure from politicians and tenants' rights groups who say the company has worsened affordable housing issues in the city.
The company also said on Wednesday, in a proposal to city officials, that it was willing to create a registry of hosts to make it easier for the state to enforce housing rules and that it would create a dedicated hotline for neighbours’ complaints. It would bar hosts who violated local regulations three times, and it said it had already taken 3,000 commercial operators off its service.
Airbnb has had an unusually contentious relationship with New York. The company’s attempts to court local support alienated a broad array of powerful interest groups, including hotel unions, landlord and tenant groups, affordable housing advocates, Republicans and Democrats.
In June, state lawmakers voted to impose steep fines on anyone who rents out a whole apartment on Airbnb for fewer than 30 days. Such short-term rentals have been illegal since 2010. That bill was delivered to Governor Andrew Cuomo on Tuesday. Mr Cuomo now has 10 days to veto it or let it become law.
The proposal introduced on Wednesday is a mea culpa of sorts for Airbnb. While the company has portrayed hosts in New York City as middle-class citizens trying to make ends meet, a study commissioned by Airbnb’s opponents has shown that many hosts list several homes and essentially run illegal hotels in residential buildings.
Landlords’ cut
In addition, the company, which is based in San Francisco, said it would ensure that landlords receive a cut of the revenue if renters offered their apartments through Airbnb, a sticking point for many property owners.
Local politicians have for several years tried to persuade Airbnb to remove from the service people who are operating illegally, and the company’s critics said the company’s proposal validated many of their concerns.
“It’s a tacit acknowledgment of what we’ve been saying all along, that Airbnb is dominated by commercial operators with multiple listings who are stealing our supply of affordable housing,” said Neal Kwatra, the chief strategist for Share Better, a coalition of elected officials, affordable housing activists, community groups and unions who are aligned against Airbnb.
Mr Kwatra added that Airbnb's proposal was "nothing more than the same failed PR stunt Airbnb has tried in every city that seeks to strengthen regulations to stem the tide of their exacerbation of the affordable housing crisis." New York City is Airbnb's largest market in the United States. Hosts in the city generated about $1 billion (€91 million) in revenue, and a portion of that goes to the company.
In a conference call with reporters, Chris Lehane, Airbnb’s head of public policy, presented Airbnb’s battle with New York as a “classic people versus the power” fight in which politicians who oppose the company are pro-special interest and anti-middle class. He called out by name Peter Ward, the powerful head of the hotel union, who is also a longtime ally of Mr Cuomo.
Still, Mr Lehane said Airbnb wanted “to proceed in a positive, progressive way” with governments around the world. Airbnb hosts will present the governor’s office with testimonials about how home sharing has helped them make ends meet. “Regardless of the outcome,” Mr Lehane said, “our work on this issue continues.”
Mr Lehane said Airbnb’s proposed rules for home sharing in New York were the result of hundreds of conversations with different constituent groups, including landlords and tenants. Airbnb also poured $11 million (€10 million) into a super PAC to pay for ads that tell voters how different legislators view the company’s short-term rental business. And it commissioned a report showing that Americans, especially millennials, support home sharing.
Hotel tax
Airbnb’s most public olive branch has been its proposal to collect millions of dollars in hotel taxes for New York City. The company reiterated that stance Wednesday, saying it could collect up to $90 million (€81 million) for the city that could be used for an affordable housing fund. The city’s proposed budget for fiscal 2017 is $82 billion (€74 billion).
Tax payments are made by hosts rather than by Airbnb, so those payments essentially redefine hosts as small hotel operators rather than as just people who share space in their homes for a small fee. New York politicians have argued that they do not want to tax illegal activity.
Airbnb is fighting other legal skirmishes in cities around the world. San Francisco and Santa Monica, California, have both fined the company for processing illegal listings on the site. In response, Airbnb has sued both cities. A ballot measure that would have severely restricted Airbnb rentals in San Francisco was defeated last year.
Airbnb has also created a way for its platform to prevent hosts in San Francisco from controlling multiple listings, a tool that will be available on November 1st.
Airbnb has tripled in value in just two years. While it was raising its latest round of financing, which valued the company at $30 billion (€27 billion), regulatory issues in New York City and San Francisco were mentioned as risks to investors, according to a person with knowledge of the funding round who declined to comment on the record because the talks were private.
When asked during the conference call whether regulatory issues stood in the way of a public offering of Airbnb stock, Mr Lehane said that home sharing was too large a movement to stop and that within in the next year or two, almost every big city in the world, “with the possible exception of New York,” would have put in place a regulatory structure that embraced home sharing.
New York Times