The Guardian takes apart Airbnb’s PR strategy

As Airbnb’s fight with the New York Attorney General’s Office continues, the Guardian takes a look at Airbnb’s defense and the real PR problem Airbnb has–that it is hiding the fact that some landlords are using the site to turn long term apartment rentals into hotels. As a user of Airbnb I can say that having more options when I travel is a win for me, though in cities like San Francisco, New York and London there’s the inevitable tradeoff that occurs when some housing stock is taken out of the supply for the general population.

What to do? The Guardian article quotes  Jenelle Orsi, director of the Sustainable Economies Law Center:

One solution, Orsi suggests, could be greater regulation on the part of cities. “Cities may address legitimate concerns by limiting how many nights per year a property can be rented, how much money a host can make and so on,” she says. But, while this solution would handle one problem, it would create another: in order to enforce these new laws, cities would have to spend taxpayer dollars to investigate and prosecute illegal hotel operators. For cities with already overstretched budgets, this would be a nonstarter.

Alternately, Orsi notes, cities could establish their own hosting platforms. On the regulation side, this would be a win: “It would allow cities to more easily regulate the volume of short-term rentals, collect taxes, and ensure the health and safety of guests,” she explains. At the same time, it could be self-supporting, as the tax revenues and legal penalties generated by this kind of platform could be used to fund affordable housing – and, in the process, attack the underlying problem that is making Airbnb (arguably) untenable.

At the end of the day, what I think will eventually happen is just that Airbnb will begin collecting taxes on behalf of the city, which should placate city governments even if it doesn’t do much for housing advocates. I think it’s incredibly unfeasible for cities to run their own platforms as Orsi suggests, though some regulation that attempts to stop landlords from converting apartments into short term rentals could get traction. Either way, I don’t think Airbnb will be easily stopped.

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Adam Lesser

Analyst Gigaom Research

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