Airbnb hosts, prepare to be probed. Based on a request received by the U.S. Federal Trade Commission, it looks like the online short-term housing rental business is about to get some serious scrutiny, as reported by Reuters.
The request to the FTC originated from U.S. Senators Dianne Feinstein of California, Brian Schatz or Hawaii, and Elizabeth Warren of Massachusetts. Website-based rental businesses such as Airbnb, HomeAway, VRBO, and FlipKey have not escaped previous attention, regulation, and, in some instances, lawsuits as the business of shared housing has grown during the current decade.
In a letter to FTC Chairwoman Edith Ramirez, the senators said, “We are concerned that short-term rentals may be exacerbating housing shortages and driving up the cost of housing in our communities.” The senators went on to write, “We have also read troubling reports of racial discrimination on some short-term rental platforms.”
San Francisco, facing one of the worst housing crises in the country, has been notably active in requiring that Airbnb hosts register with the city. San Francisco recently enacted legislation to fine Airbnb for advertising unregistered hosts. Airbnb promptly filed suit against the city, claiming the law violates the First Amendment and the Communications Decency Act among others.
Acknowledging that short-term rentals present a new means of earning money, the Senators also requested the FTC investigate the extent that the websites provide a means for property owners and renters to run their own businesses.
The new economy, including various on-demand, hailing, and resource sharing models, presents new methods of earning anything from a few extra dollars to full-time incomes. With any business, however, no matter how small, it’s not just about selling products and services; compliance with the laws and regulations is part of the deal. Particularly as business categories grow, they attract attention. It looks like Airbnb and the other short-term rental websites and the small businesspeople they serve may be getting plenty attention from the FTC.