Why the house that Airbnb built stands on shaky legal ground

Share and share alike

Airbnb is undoubtedly a disruptive service. It’s changing the vacation property game at warp speeds, and now the industry has to figure out either how to catch up and adapt, or use legal means to change Airbnb. Whether you call it the peer-to-peer economy, sharing economy, or “collaborative consumption movement,” the way we buy things has changed thanks to the Internet and tech startups.  The idea of ownership is very different than what it used to be, and Airbnb forces renters to ask: If this couch is my couch, why can’t I make some money off of it?

collaborative consumption infoLegislature is a big part of what’s standing in the way of all that. Airbnb’s own home, San Francisco, specifically prohibits exactly what the site does. Renting a property for fewer than 30 days is illegal — in order to do so, you have to get a special permit. And that’s if you own — renters are, of course, still subject to the clause in most leases that prohibits subletting. The law isn’t just meant to protect landlords, it has to do with a slew of issues: Bed and breakfasts and hotels can only exist in certain zones, and some people are buying up properties for the sole purpose of renting them out in popular tourism locations. This means that places people are desperately trying to find affordable apartments to rent in are being consumed by Airbnb properties, which are more valuable assets to the owner as short-term units. These ad-hoc hotels are taking up units in popular residential areas where finding a rental is already incredibly difficult. Owners may not only be motivated by ease of renting on the site, but because it allows them to get around complicated applications and expensive licenses that bed and breakfasts have to pay. They may think Airbnb represents a loophole, but the same owners often fall under the city’s definition of a B’n’B, and thus are breaking the law.

Of course, the laws exist for a reason — typically to protect your neighbors in the case of zoning. If you’re gone for two weeks a month and renting out your apartment, your next door neighbors will be subjected to your (potentially unpleasant) guests — something they are unprepared for since they weren’t aware they lived in a zone permitting you to run what is essentially a bed and breakfast. All of this is really only the surface of an inherently complicated issue, and it’s one that San Francisco is actively attempting to deal with

And Airbnb is working with them. The company tells me that the San Francisco Mayor’s Sharing Economy Working Group was formed with the intentions of trying to address the tension between current legislature and businesses like itself. “Airbnb seamlessly integrates travelers into a neighborhood’s existing infrastructure, relieving congestion in tourist zones and distributing their economic impact to new neighborhood economies – which is a win-win for residents and businesses in those areas,” the company says. “Our hosts and guests practice collaborative consumption, which encourages innovative ways to use existing resources, such as the extra space in a home, rather than exploiting new resources. The underlying philosophy leads to more sustainable and productive communities and helps to drive new business to the existing businesses in each area.”

Entire marketplaces are springing up for getting things that we want, cutting out the middleman and lowering costs by allowing us to share or get rid of extraneous add-ons we don’t need (in the case of Airbnb, a hotel restaurant, turn-down service, your towels cleaned for you, etc). And renting rooms is only the beginning: Car-sharing networks like GetAround and Wheelz are part of this, as is ThredUP, a childrens clothing-swap platform. ParkatmyHouse turns your driveway into a parking garage. 

Consumers aren’t the only ones who benefit. Reusing, sharing, and exchanging goods can cut down on waste; if we all share driveways for parking thanks to a network the allows us to organize and connect for this purpose, then we could potentially eliminate ugly, half-empty, space-consuming parking garages in high-demand real estate areas.

It’s a matter of efficiency, and with that comes job loss. If you effectively compete with and eliminate the magnitude of a product’s use, jobs will be sacrificed. If the consumers relying on services like Airbnb, Zipcar, and TaskRabbit continue to increase, it could hurt a variety of industries. And again, there are laws complicating the legality of many of these services.

And that’s where the debate over how Airbnb will proceed from here enters, and why the legal discussion is ongoing and being led by city boards and lobbyists. 

How do we solve the peer-to-peer rental dilemma?

We can discuss the merits and shortcomings of the collaborative consumption movement all day long, and while they play heavily into the issue of Airbnb and its relationship with zoning and pricing regulations, it doesn’t solve the renter’s dilemma. As it currently stands, renters who are acting as hosts on Airbnb are, by and large, violating their leases. The punishment can range from a first-time offender slap on the wrist, to eviction or legal action to claim part of the money you earned. 

Whether you agree with the ethics of a sharing economy or not — and for the record, I do — the fact remains that this is the way house leases are generally written, and have been written for a long time. They are the rules that many of you reading this agreed to when you signed that contract. Given that this is the case, how should users approach using Airbnb?

First of all, if you want to be a host, you should check out your lease. Who knows? Maybe you just happen to be the lucky minority without a subletting policy in your agreement. If you do have one, it’s a risk you have to personally weigh. Consider talking to your landlord and explaining the situation and the site. Chances are, since these are property owners who rent apartments, they’ve heard of Airbnb before. You also need to take your neighbors into consideration, and screen your potential guests carefully — whatever your apartment’s house rules are should apply to them as well. 

Renters shouldn’t be the only ones who give a little, though. Maybe it’s time for property owners to get a little flexible as well and consider integrating language that makes it possible for their renters to use Airbnb. Maybe they take a cut, maybe they get to help approve guests. Airbnb is open to cooperating with landlords and finding a solution. 

None of this is a problem Airbnb asked for, mind you. The site’s intentions were to give property owners a way to share their empty homes, rooms, apartments, porches, couches, and so on. Now the platform has unwittingly struck a cord on both sides of the rental market, and it’s up to landlords to adapt and lawmakers to decide how the Airbnb evolution will continue.

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