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Stop Calling Airbnb the 'Sharing Economy'

It is just part of the regular economy, and a new analysis of the San Francisco market supports that.
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My husband and I stepped off a creaky water-bus in Venice, Italy, and, within 30 seconds, an extremely lanky Italian woman grabbed my suitcase. "Come on!" she said, flapping her arm for us to hurry up and follow her. We hustled over canals and cobblestones, a usually 15 minute-walk to our Airbnb rental, which was easily halved by our brisk pace. 

Turns out, our brisk clip was due to the woman operating as part of a tidy business: She was an employee of a small company with many rental properties in Venice. And cleaning apartments and swapping keys across the city puts her in a mid-day rush. Due to a bit of a language barrier, I didn't figure out how many apartments she was managing, but we rented another from her company on the other side of the island for our final night in town, and again got the hurried-but-thorough pick-up and tour en route to the rental. 

This isn't how Airbnb is supposed to work. But, truth is, it works great.

Cities--particularly New York City and San Francisco--are beyond irked that what bills itself as a company that lets homeowners rent out spare bedrooms has now spawned, globally, thousands of what can--rightly, I believe--called private hotels.

The problem with running private hotels is that cities have various ways they tax and regulate the hotel industry, and Airbnb is largely skirting them (and, with a lengthy warning notice on its website, placing the onus for obeying local laws on its own customers). And while the company pledges in some cases that it will pay the taxes to municipalities, there will be much finger-drumming in coming months waiting for that promise to be fulfilled.

In the meantime, hundreds of micro-entrepreneurs have sprung up. They're not the kind pocketing a little extra cash each month by renting out their couch, as Airbnb would like us to believe. They're little companies, like the one employing my lanky Venice key-delivery-gal, raking it in through renting out real estate in blocks of days, not months. 

A recent report commissioned by the San Francisco Chronicle confirms this: It found that of the city's nearly 4,000 Airbnb hosts, 513 of them controlled, and listed, multiple properties. This suggests that many of these hosts are treating otherwise live-able homes or apartments as year-round vacation rentals (leasing an apartment for less than 30 days is forbidden by the city of San Francisco).

In New York, it's equally grim in terms of how Airbnb--now valued at $10 billion, which is more than Hyatt Hotels--may be affecting the city's housing supply. Thirty percent of New York City Airbnb users in 2013 had more than one listing on the site--and up to 66 percent of New York City's listings may be illegal. More than 100 hosts had seven or more listings--making up 1,237 listings. Just 10 "super-hosts" at one point ran more than 313 units in the city. (Some have since been removed, but could easily make six figures on the rentals.)

"From a policy perspective, the real issue is whether there are a lot of units that have been removed from the housing market because of short-term rentals," Gabriel Metcalf, the executive director of SPUR, an urban-design think tank, told the San Francisco Chronicle.

Affordable housing is a massive issue in San Francisco. And residents are enraged--er, no, not so much. A study of San Francisco voters in early June found that just 26 percent opposed legalizing short-term rentals in the city. Seventy percent were in favor of allowing Airbnb to legally operate in San Francisco. When asked about city Supervisor David Chu's attempts to legalize and regulate Airbnb, 44 percent of respondents said they had no opinion of his attempt.

Despite all that apathy, let's remember that shaking up the stodgy hotel industry has always been the goal of Airbnb founders Nathan Blecharczyk, Brian Chesky, and Joe Gebbia. Chesky told me more than three years ago that he'd been interested by the fact that competitors in the hotel industry only differentiate themselves by price and luxury level--sort of the way department stores do. And he was aiming to take a big slice of the more than $500 billion global hotel business.

That was 2010, back when Airbnb had only 13 employees, and was based in a residential apartment in San Francisco's SoMa neighborhood. Now it's a global powerhouse with more than 800 employees. And it's provided the technological back-end for thousands of private hotels to open globally. It's mainstream. And it is not something delicate--so let's stop calling it a special name.

In this light, it's only shocking that regulators haven't caught up.

IMAGE: Getty Images
Last updated: Jun 17, 2014

CHRISTINE LAGORIO-CHAFKIN | Staff Writer | Senior Writer

Christine Lagorio-Chafkin is a writer, editor, and reporter whose work has appeared in The New York Times, The Washington Post, The San Francisco Chronicle, The Village Voice, and The Believer, among other publications. She is a senior writer at Inc.




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