The Sharing Economy?

Airbnb is part of what is called the sharing economy, which sounds all warm and fuzzy, but apparently a lot of grief is being passed around too. The behemoth corporation acts as a liaison between property owners (or long-term renters) and out-of-town visitors. What is its relationship to the homeless crisis?

The gist of Airbnb’s public relations efforts is that it benefits the average struggling American. A middle-aged couple whose child is away at college can help pay for the diploma by renting out the kid’s room a few times a year.

The public is encouraged to praise this Yankee ingenuity. Turning a profit from underutilized assets is just good business. On the other hand, critics come right out and say that lifelong residents are permanently displaced, for the pleasure and convenience of tourists, and to the enrichment of Airbnb.

Especially in large cities, the agency has been blamed for monopolizing the housing stock and removing from the market homes whose walls should be protecting families. It is accused of worsening the most destructive aspects of gentrification.

Puny attempts to regulate Airbnb

A little over a year ago, San Francisco attempted to curb the excesses by passing laws. Supposedly, all hosts must register with the city, and a house or apartment can only be offered through Airbnb for 60 days per year, max. Limiting permission to rent to outsiders to two measly months was intended to stem the abuse of eviction laws by making it less potentially lucrative to kick somebody out. The new rule was also meant to somehow prevent entrepreneurs from “operating multiple listings simultaneously in violation of housing regulations.”

When people become “hosts” both municipal governments and the corporation receive complaints from neighbors who don’t like transient strangers to have keys to their buildings. This is where we start to see what are called “knock-on” effects, the chain reactions that make all social interactions so complicated.

About those local government offices where citizens can lodge their complaints: In a city where the average person could not afford to rent a garage or a storage unit, let alone a decent apartment, who is assumed to be working there?

Responding to a news article, San Francisco resident George Trent commented:

There is a significant shortage of secretaries and clerks (along with other SF City and County to process the predicted avalanche of small claims lawsuits (ie: neighbor vs neighbor)… It’s absurd to think that the backlog is going to get anything but worse. I’ve been recruiting for 28 months and have hired 3 people to fill 14 positions. You can’t live in SF on what the city pays a clerk.

Airbnb guests are not immune from damage, either. Trip planning should include research on the destination’s local ordinances. If someone books a stay in a city where Airbnb is illegal that person can be evicted without warning, right along with the person he’s subletting from.

For NYTimes.com, Ron Lieber pointed out that participants in the “sharing economy” actually share a scary amount of risk, and noted that “insurance companies aren’t always fond of everyday individuals running inns out of their apartments…” Hosts suffer a certain amount of abuse. Guests have done extraordinary things, like bring in bugs from outside so they could tell headquarters that the rental was infested, and get a full refund. An angry (or even just careless) guest can do a lot of damage, and there have been some hair-raising stories of places ruined by parties.

The domino effect of rising rents

Airbnb’s existence is blamed for inexorably rising rents, and everything has a domino effect. Because of the increased rents, settled tenants who do not want to be “hosts” are all but forced into the game. Explaining for The Guardian the context for her own story, Los Angeles resident Ruth Fowler said of Airbnb:

[…] a big part of its revenue has historically been driven by commercial property owners and landlords with multiple properties who rent out everything from luxurious mansions to rent-fixed units intended for long-term residents. Those sites are removed from the housing market to accommodate Airbnb clients, meaning that long-term, affordable housing options become more and more scarce.

Despite living in a low-income neighborhood, Fowler could not make ends meet if not for playing host to a stranger, ten nights each month. She contends that “in a city where the housing crisis is evident on every corner, I, the home-sharer, am the one picking up the price for the low-budget tourist.” She goes on to say:

The types of people who book my spare room tend to be business trip visitors, convention-goers, students and — saddest of all — Los Angeles residents who have found themselves unable to afford rent and must wander from cheap short-term rental to short-term rental until they’ve scratched together enough money to afford a security deposit.

(To be continued…)


Source: “Airbnb is transforming itself from a rental company into a travel agency,” TheVerge.com, 11/17/16
Source: “Airbnb Apologizes For Passive Aggressive Ads on Muni Shelters,” SFWeekly.com, 10/21/15
Source: “Airbnb Horror Story Points to Need for Precautions,” NYTimes.com, 08/14/15
Source: “The reluctant Airbnb host: why I rent my spare bedroom to pay my own rent,” TheGuardian.com, 08/01/17
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