Further Focus On Airbnb

BNB's Everywhere

Airbnb has been in the news a lot these days mostly to win over the public that they need the most, New Yorkers and other city dwellers who suddenly find themselves falling a little short much of the time when it comes to making their rent. So far the company seems to have found the most traction by exploiting the narrative of the “sharing economy” where everyday citizens share goods and services in exchange for the money to make ends meet. They fail to mention how these DIY hotel companies circumnavigate local housing laws and avoid paying hotel taxes. Like any other invasive entity Airbnb, along with all of the other companies that provide similar services, destroy the environment for which the most vulnerable are able to survive. In this case we are talking about the working class of New York City.

Most articles one reads these days about Airbnb usually concerns students or middle class tenants looking to make extra money to pay their $3000 dollar rents opens door to friendly tourists who can’t afford the $200 a night stay at the major chains. And from there a story of symbiotic benefits between tenant and tourist is painted. When presented in this light, one would wonder how any law could be justified in stopping this practice. What is missing from these stories of course is how the problem of how illegal hotels has led to the gentrification of various neighborhoods throughout cities across the world which in turn have pushed the rents up to these inflated rates to begin with. Such is the case with an article by Verena Dobnik of the AP, titled “NY fights site listing homes for tourists to rent”http://news.yahoo.com/ny-fights-listing-homes-tourists-rent-100038087.html. In the piece Dobinik quickly mentions that the practice of renting one’s room for less than thirty days is illegal in New York state and that the state’s top prosecutor is now demanding Airbnb’s list of operators, without offering any kind of back story. For those new comers to any of the five boroughs it may come as a surprise that rent regulated tenants have had to deal with an array of different forms of harassment and the loss of their neighbors. The focus on the article rather concentrates on how middle class tenants use this service to help pay their $3000 to $6000 a month rent. The question of why the rents are so high, especially in formerly rent regulated housing, is never asked. Further the article doesn’t separate legal short term stays from those that violate New York State’s multiple dwelling laws. Take the first case mentioned in this article; Mishelle Farer, who works as a sergeant in the US army, rents the second bed room of her Williamsburg apartment out through Airbnb for about $60 to $70 dollars a night. If Ms. Farer is staying in her place of residency while the tourists are there, then she is not actually violating any housing laws and really has nothing to worry about. In such circumstances the transients are simply house guests. If she leaves town and rents her place out for less than 30 days, then she would be violating the housing law. What is mentioned in the article is how far the company has reached in into New York City. According to Dobnik there are currently 15,000 operators violating housing law, reaching from Manhattan down into Red Hook Brooklyn with prices ranging from $35 dollars to more than $900. Airbnb contends that 87% of all of the operators who use their service actually stay in the units with their guests, a claim that seems dubious and bit hard to prove since through their own admission in other articles they have to trust their customers to follow the local laws. The company only provides the means of connecting tourists with those who want to rent out space. Strangely enough, these short term sublets have actually brought two natural enemies, landlords and housing groups together claiming that these operations violate laws surrounding one’s lease and often leads to security problems since those who live in the buildings have no idea who is coming and going from their place of residence.

Matt Chaban of the Daily News seems to have taken the time to focus on the reason that the state’s Attorney General Eric Schneiderman subpoenaed Airbnb in order to obtain the company’s list of 225,000 New Yorkers who use the service to rent out space in their apartments. According to Chaban, “ the site has 225,000 users in the city, but only data from those who rent out their place is being sought, according to sources. That would affect only about 15,000 of New Yorkers. The legal strike comes just days after AirBnB CEO Brian Chesky tried to appease state lawmakers by agreeing that its users should collect the normal hotel occupancy tax and promising to work with pols to root out bad hosts.”

According to a law enforcement source sited in the article the company is actually refusing to cooperate with the authorities when it comes to weeding out and identifying those operators who are not paying the hotel tax. Other companies who conduct similar businesses and have received requests by the AG’s office for their client lists have already complied. Airbnb’s response to the request so far as been to refuse to hand over the list. The subpoena is welcome news for many rent regulated tenants who have had to deal with noisy tourists for months on end or have found themselves not being able to get on the elevators to their own homes because they were filled with tourists and their travelling bags.

As pointed out in this article, many of the city’s electeds started to push for crack downs on illegal hotels in 2006 when the number of tenants being harassed out of their homes so landlords could use them for transient purposes exploded. The law is not meant to go after subleasers who look to rent their places out for 30 days or more or for those who are at home at the time a “guest” is staying at their place. It should be mentioned here that it is up to building owners or to decide if a tenant can sublease their place. When it comes to condos [subleases are at the discretion of the board] boards, this practice is completely forbidden. The 2010 update to the multiple dwelling law, which first went into effect in 1929 is really aimed at some of the city’s most notorious landlords and those who look to violate long standing rent regulation laws. http://www.nydailynews.com/news/national/state-airbnb-article-1.1477934

As Airbnb continues to refuse to hand over their operating list, they have decided to double down by consolidating their efforts with a number of companies which offer similar services http://valleywag.gawker.com/airbnbs-industry-mouthpiece-astroturfs-for-donations-1481305550/@maxread and helped form the website Peers.com. The company is a Who’s Who of small time operators and many who have been linked to the illegal hotel industry. Some other examples of companies involved in what has been described as a front group nonprofit by Gawker, are Lyft and Taskrabbit. According to Nitasha Tiku of Gawker, “While Airbnb funneled some of its $326 million in venture capital toward movie replica conference rooms, a skee ball machine, and corporate myth-making at its shmancy new Soma headquarters, the company's non-profit partner is soliciting non-tax deductible donations from regular shmoes to keep the sharing economy in the margins to which it has become accustomed.”

And this is where Peers comes in. Aside from offering Aribnb and other companies a cover for their business endeavors, Peers promotes itself as a grassroots operation which looks to, in their eyes, educate the public on this new “sharing economy” while at the same time working on behalf of the involved companies. The Executive Director Natalie Foster who heads the outreach arm of the group calls their efforts “community building and not “lobbying”. The language is interesting considering Airbnb has already pumped tens of thousands of dollars into Albany coffers in order to weaken New York State’s housing protection laws.

It is important to mention at this point that Airbnb’s relationship to Peers is in no way a passive one but rather quite direct. As Gawker notes, “ …That distinction is harder to swallow since Peers cofounder Douglas Atkin, who also happens to be head of community for Airbnb, sent out a corporate plea to New Yorkers directing them to a Peers petition, without mentioning Airbnb's affiliation. That petition is mentioned in an end-of-year email plea from Peers along with its success in "changing ridesharing laws in California.” Since then the company Lyft has instituted a minimum surcharge and has raised their overall prices.

Despite all of this Fortune magazine recently listed Peers as one of those groups that is truly for the people according to Columbia Journalism Review. A reporter for CJR wrote of Peers efforts a rather scathing review “And even the regular people Fortune refers to here are effectively mini-corporations themselves—ones that skip the taxes and other regulatory requirements competitors face. I'd bet few of these Airbnb activists breaking into groups and heading to Albany to lobby legislators are folks who rent their flat out for a few days a year while they're on vacation. They're much more likely to be people who make serious money doing it. Fortune reports that some Airbnb users bring in more than $400,000 a year in sales.”

So it is rather difficult at this point to separate this group from other lobbying arms for long standing corporations. This is especially true when you consider the fact that one of the driving forces behind Peers is Ebay founder Pierre Omidyar. According to a Fast Company article,http://www.fastcompany.com/3022974/tech-forecast/is-peers-the-sharing-economys-future-or-just-a-great-silicon-valley-pr-stunt Omidyar Network is the main financial powerhouse behind Peers and its anti-tax stance. It should also be noted that Mr. Omidyar also heavily funds pro-libertarian candidates many of whom fall in line with the Tea Party. As the author of the article Anya Kamenetz, points out of the 73 companies that make up Peers only three are actual nonprofits themselves.

Until next time…

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