Speculators Have Subverted The Sharing Economy
The Los Angeles Times reports from California. “Airbnb continues to promote an image of helping mom-and-pop homeowners raise a little extra cash, but its platform has drawn far bigger operators who buy properties to rent out full-time. Cities from New York to Santa Monica are trying to figure out how best to zone, tax and oversee this new industry. As they do, they’re getting an earful from hotel workers’ unions worried about the effect on their jobs, housing advocates worried about a shortage of affordable apartments, and neighbors wary of strangers on their block every day.”
“Airbnb has responded with a battalion of lobbyists, especially in big states such as California and New York, along with beefed-up PR operations. It has hired veterans of Silicon Valley, the Obama administration and big labor unions. While the company touts ‘home sharing’ — the spare-room rental — in its advertising and political campaigns, nearly two-thirds of listings in L.A. and other big markets are for whole units, according to a recent study by the Los Angeles Alliance for a New Economy, a labor-backed think tank. Those units generate 89% of the company’s revenue in Los Angeles, the organization estimates.”
“Airbnb disputes the the group’s study, but observers say its findings suggest the company has little interest in reining in full-time operators. ‘Airbnb profits from transactions,’ said Yassi Eskandari-Qajar, city policies program director at the Sustainable Economies Law Center in Oakland. ‘There’s no incentive for them to put limits on how many people can do this, how much they can charge or how many homes they list.’”
From LA Weekly. “A pair of L.A. city leaders today proposed a law that would ban the short-term rental of units that hosts don’t actually live in. The proposal also would prohibit landlords from evicting rent-control tenants for the purpose of making a unit available full-time on Airbnb and similar sites, a spokesman for city Councilman Mike Bonin said. And hosts would have to start subjecting the rentals to the city’s hotel tax.”
“A statement from Bonin’s office put it this way: ‘As a result of the proliferation of short-term rentals … there has been a negative impact on some residential neighborhoods, which are changed by a revolving cast of visitors and their impacts. In some popular tourist communities such as Venice, speculators have subverted the ’sharing economy’ business model, converting regular rental housing into short-term rentals, significantly reducing rental stock and contributing to increased rents and decreased affordable housing. In some cases, large numbers of units in the same building, or entire buildings, have been converted to short-term rentals, operated by off-site management companies.’”
From Skift. “San Francisco supervisors are expected to revisit a sticky issue Tuesday that has generated impassioned pleas from tenants and home-owners alike — Airbnb regulations. People who rent out space say they need the additional income to pay the mortgage and daily expenses. ‘For thousands of San Franciscans, Airbnb is an economic lifeline making it possible to stay in the city they love,’ Airbnb spokesman Christopher Nulty said.”
From KTVU. “San Francisco Supervisor David Campos joined the protest at Airbnb; pitching an alternative plan up for consideration. His plan calls for limiting the days a homeowner can rent out their property to vacationers to 60 days per year. His plan also calls for homeowners to register with the city, and to share information about how many days the property was rented.”
“Home sharing advocate Peter Kwan says his organization represents about 1,800 home sharers. He agrees that many of them are renting out their homes precisely because the housing crisis has raised prices for everyone. ‘The vast majority of our members tell me that if it wasn’t for home sharing, they’d be forced to leave San Francisco,’ said Kwan.”
From Mission Local. “Poised to make a choice between two competing versions of legislation to regulate short-term rentals, the Board of Supervisors instead voted today to continue the items, delaying a final decision by more than a month. Supervisors Christensen, Cohen, and Kim said they were worried about separating the ‘bad actors’ who exploit homesharing platforms to profit from properties they do not live in from the ‘casual’ homesharers who use those platforms to stay afloat.”
“‘I’ve got constituents who are hanging on by the skin of their teeth,’ Christensen said.”
The Sonoma County Gazette. “I first noticed the effect of vacation rentals in the Russian River area, where home values started steadily increasing as a result of this sharing economy. Those little 2 bedroom 1 bath homes that could only be rented for $1,100 per month because of their distance from Santa Rosa could now fetch up to $5,000 per month if properly marketed and booked up because of their close proximity to the vacation area.”
From CBS San Francsico. “The Bay Area may be a nexus for high-paying tech jobs, but its tough housing market is hurting the entire country, according to a new study. The National Bureau of Economic Research released a paper last month claiming NIMBY (Not In My Backyard) policies that restrict the flow of housing in New York, San Francisco and San Jose are diminishing the national economy. Researchers said that increased ‘wage dispersion’ from 1964 to 2009 had held back the U.S. GDP growth by 13.5 percent largely because of housing constraints in those three cities.”
“The study also found the aggregate growth of New York, San Francisco and San Jose was so little that together the three cities contributed as much to U.S. GDP growth as places that suffered negative local growth like Detroit. ‘How can New York, San Francisco, and San Jose start pulling their weight?’ news analysis website CityLab asks.”
