7 Questions For AIRBNB

Airbnb, the home-rental service, has helped its “hosts” roll out the welcome mat for more than 11 million “guests” in 192 countries. But Airbnb, its “guests” and its “hosts” are trying New Yorkers’ patience, just as guests begin to stink after three days. As Albany lawmakers address the challenges Airbnb poses to lawmaking and law enforcement, they shouldn’t get distracted by paeans to the “sharing economy.” 

Here are seven questions that lawmakers should ask Airbnb: 

1. A 2010 law confirmed that it is illegal for people to rent out their entire apartments for periods under 30 days. (People can rent out rooms while they are present, although they often violate their buildings’ rules when they do so.) Attorney General Eric Schneiderman’s investigators have determined that “the majority of [your] listings were for the ‘entire apartment’” and “for durations under 30 days.” Such rentals are almost certainly illegal. Will you turn over full records over the past three years so we can know for sure, one way or the other? 

2. New York State and City designate some real estate as residential and some for hotel use. The state and city, in turn, often offer tax breaks to developers to build residential housing in furtherance of a public policy goal: to create more affordable places for people to live. Do you think that New York has the right to enforce its own zoning and occupancy laws even as you seek to change them? If so, why not cooperate with the attorney general’s attempt to gather information on lawbreaking? Do you think that local and state government have the right to control local and state zoning at all? 

3. How many times in any given year do you think New York apartment dwellers should be able to rent out their homes to strangers for a few days, a week or a few weeks? Keep in mind that in a building of 70 apartments, allowing each family to convert their apartment into a hotel suite once a week for a year means that permanent residents of the buildings will almost always be subjected to transient strangers in the common areas of their homes. 

4. Nearly half of New York’s two million rental apartments are subject to state and city rent regulation laws. Tenants in these apartments enjoy protection from free market forces. Their landlords cannot raise the rent beyond an annual increase approved by political appointees. Nor can landlords refuse to renew tenants’ leases. In turn, tenants agree to certain conditions. Tenants cannot sublet their apartments for a profit. Is it fair for rent regulated tenants to enjoy protection from the market on one side and yet benefit from the market on the other? Should New York State ask rent regulated tenants to sign a rider once a year acknowledging that they understand they could face eviction if they rent out their apartments for profit? These questions are especially salient, because both rent control and illegal hotel conversions reduce the supply of apartments for newer market rate tenants who don’t enjoy rent regulation. 

5. Airbnb supporters often say that the company is using the free market to innovate and compete. But Brian Chesky, an Airbnb co-founder, told The New York Times’ Tom Friedman last year that “Hilton has around 600,000 rooms. We will get up to 200,000 people per night by peak this summer.” Does Airbnb consider itself an old-fashioned hotel operator? If so, should it not comply with all of the rules, regulations and taxes that New York hotel entrepreneurs face? 

6. Transient populations pose security challenges. People behave differently on vacation or on business travel than they do at home. They may make themselves more vulnerable to crime by carrying more cash and valuables, drinking more than usual and inviting new acquaintances to their rooms. Hotel companies spend money on security and other arrangements, including daily room checks, to protect guests from themselves and from other guests. Can Airbnb provide a similar level of security to guests, hosts and residents? 

7. Insurance companies treat businesses differently from homeowners. A homeowner who runs a business from his home must report this use to his insurance company. Are Airbnb guests aware that in the event of a fire, crime or slip-and-fall, their ability to recover damages may be curtailed by a homeowner’s insurance company that determines it doesn’t have to pay out for business losses on a residential policy? 

Nicole Gelinas (@nicolegelinas) is a contributing editor to the Manhattan Institute’s City Journal.