I just checked out of an airbnb this morning in Bangkok that had signs posted all over the lobby and elevator that this was NOT a hotel and that if you are caught and not a resident you will be taken to the police. It was pretty uncomfortable watching over your shoulder every time you entered as the security guards eye you up and down. Obviously, the listing didn't mention anything about this.
I've had that in Los Angeles as well. "If you see any people just tell them you're friends of Matt visiting. My condo ownership rules forbid renting out/Airbnb."
One of the most memorable aspects of my recent Airbnb interview: most of the interviewers I talked to lamented that Airbnb wasn't "legal" everywhere.
I don't think that's their biggest problem.
Let's pretend for a moment Airbnb wanted to really bring value to travelers, hosts AND communities. What would they do to ensure the community at large benefitted?
I have some ideas, mainly around ensuring users aren't listing more than one property and that neighbors of a listing have a way to veto a listing. But I'm getting the impression they don't really have a concern for the community. Which is ironic because their next play seems to be bringing a more cultural experience to Airbnb travel. It would be pretty hard to give someone a good cultural experience if they arrived at their Airbnb space and everyone in the neighborhood was ready to give the visitor the stink eye.
Given most people are not Airbnb hosts, I have to imagine unless the company does some major community outreach in the next few years, they're gonna run afoul of some grassroots headwind.
> I have some ideas, mainly around ensuring users aren't listing more than one property
This would destroy them. The reason Airbnb has grown far beyond what investors (and even the founders, probably) expected it to is because of individuals buying up and renting out large numbers of units as a full-time business, and because that phenomenon hasn't been stopped by regulators.
You can't build a $20B+ business on the back of individuals renting out spare rooms here or there for some extra money. You can build one by unlocking untapped value in the urban real estate market by converting long-term rental properties to short-term ones (whether that's illegal or has negative externalities is another matter).
I'm told architects have a saying: "form follows funding", and that now seems depressingly true. During my years in the industry I think things have steadily bent toward revenue at all costs, damn the mission, damn the government, and damn any sense of integrity. Zenefits is Exhibit A for me, but I hear story after story of companies building themselves to flip and doing shady things to maximize the next quarter's numbers.
I wouldn't mind this so much were our self image purely about cash extraction, as in the financial industry. But once I think it was more about impact, and I fear we are telling ourselves that story more than the current reality justifies.
The venture-backed technology industry is nothing more than an extension of the financial industry, and anyone who says otherwise is lying or deluding themselves. The guys on Sand Hill are getting their money from the same sources as the hedge fund managers on Wall Street.
The reason I think it used to be different and could be again is that venture funding is in theory about creating very long term value. You don't get a company like Amazon or Google or Apple by focusing on the next week or the next quarter, as is typical in the zero-sum-oriented financial industry. You get it by focusing on the next decade, the next century. You get it by finding ways to create massive long-term value for everybody, and then taking a modest slice.
The trouble I see is that the MBA religion of "up and to the right" leads people to make a lot of short term decisions. In the short term, short-termism does wonderfully well. I'm hoping that the current dose of unicorn fever is temporary. But in my case it's pure hope; I don't yet have a reason to believe it.
Pensions yes. But most 401(k) plans only offer mutual funds as investment options, and those in turn mostly only invest in publicly traded securities ( not VC funds). A few public companies have captive VC arms but those are pretty limited.
I think the "arms length" chasing of return by pension and 401k funds (whether active or index funds) is a problem. Our money goes places and does things in pursuit of returns that we would never consent to if we had to knowingly make the decision.
Out of which concerns have come socially responsible investing, triple bottom line and slow money.
Completely agree. I got fed up with the whole thing and went looking for opportunities to do useful stuff with the technology, without venture money and extractive shareholders. And found it.
To some of us the free market is integrity and the government and regulations are unethical beasts meant to be slain with technology. I see AirBnB and Uber as innovators in that space.
I think it's more a cultural shift away from libertarianism amongst a new generation of techies as the cause of the disconnect.
I have a hard time understanding that as anything other than a religious view. And a relatively new one, despite your claim that people are shifting away.
Read, for example, The Economist, which for 150 years has been advocating for free markets and against excess regulation. They've been doing it so long they prefer the phrase "classical liberal"; to them, "libertarian" is a johnny-come-lately term. Every time they advocate this stuff they do it not based on a tautological "markets are good because markets" argument. For them, markets are the best way to accomplish human ends: people that are better off, freer, more independent. But when markets work against that, they say so. For example, they're strong supporters of a carbon tax, because they see that as the least intrusive way to prevent further degradation on the atmosphere.
Markets are tools, just like computers are. They can be used well or used poorly, for good or for bad. In my view you have mistaken a mechanism for the purpose. When we decide how to structure society, it cannot be to serve the individual aesthetic or ideological views of a narrow group. It has to be to best serve its members. Nothing else is sustainable.
I see free markets as providing the least resistance to unfettered technological progress (which is ultimately what I'm after).
I don't think it's worthwhile to "decide how to structure society". Society should be emergent from individual freedom. Central planning can only cover the needs/ideologies of those doing the planning (and probably not even that).
Admittedly my views are radically post-modern and include a healthy dose of moral relativism i.e. there is no "best" way to serve society's members, just progress and the by-product of that progress.
Ok. You are after something that you define as "progress". Why do you think everybody else should act in ways that maximize what you want?
Also, you have already decided how you want society to be structured, which is devotion to a very particular definition of "individual freedom". (Other people have broader definitions of freedom that they are equally devoted to.)
I agree that there's no intrinsically "best" way to do things, but that doesn't mean we can't jointly converge on a shared understanding of "best". Indeed, I think it means we must work very hard to do so. Since God is dead, we must take up the work we previously assigned to him.
I'd also suggest you haven't really paid much attention to where your kind of progress comes from. Free markets (which require a fair bit of regulation to maintain) are a decent way to optimize certain things. But they aren't really good at anything that has relatively long payoff times. Anything with a payoff time of more than 25 years or so should be ignored because its net present value is zero. Anything where the value is hard to capture is effectively worthless, and that includes things like society-wide vaccinations, moon landings, GPS, the Hubble telescope, and our many interplanetary probes.
Or take the Internet. It came purely out of tax funding. The commercial equivalents were evolutionary dead ends like Compuserve and AOL, centralized fiefdoms with low interoperability. The network technology that drives it wasn't invented by AT&T, who had no interest in things that reduced their central control. (For more see the excellent history When Wizards Stay Up Late.) If not for net neutrality regulation, many Internet companies wouldn't exist; monopoly or oligopoly network providers would have made it too hard or extracted too much monopoly rent.
Or consider basic science research. Einstein never had a market-driven job in his life, and it's a good thing, as his freedom from practical concerns let him do amazing work. Very few Nobel laureates had anything approaching commercial goals or commercial support. I'd call the detection of gravity waves major progress, but that work received massive tax funding. Etc, etc, etc.
I'm not sure we've ever seen a 100% free market so while regulation appears on the surface to have been helpful, it could be viewed as solving problems caused by other regulations.
It's also important to note that the vast majority of major progress (including your examples) have been tied to war, conflict and war-like situations (Cold War).
Human conflict will continue to be a driver of progress but we've reached a state where the agents engaged in that conflict need not be centralized in the form of a government.
Some of us would like to race toward that situation while others believe there's redeemable qualities in the status quo. Interesting times as that dichotomy will likely grow as individuals continue to be networked together without the limitations of geography or citizenship.
> I'm not sure we've ever seen a 100% free market so while regulation appears on the surface to have been helpful, it could be viewed as solving problems caused by other regulations.
The prosperity gospel types, for example use it to say that if something bad ever happens to anybody, it just means their faith wasn't sufficient. [1] Communists use it too; when I've asked why we would want to try communism when it has failed every time, they explain that it just wasn't "true" communism, that it would work if we'd use a more pure version of it.
This strikes me as ridiculous in two ways. One, it isn't falsifiable; nothing can ever prove it wrong. And two, advocating to run a country on a system that can't work except under the most perfect conditions is advocating for something that will never work in practice.
I also reject your thesis that war is necessary for progress. Einstein wasn't out there building bombs. Most Nobel winners are not engaged in war research. The Hubble does not have military applications, and neither do gravity waves. The CDC is not paid for out of the defense budget.
Your notion that the most effective way to get more progress is to have more war between non-state actors is, aside from being wrong, ridiculous as something to advocate for; exactly nobody will go along with it. I agree it's a reasonable consequence of unfettered pseudo-libertarianism, though. It's at least refreshing that you admit that; so many anti-government types have trouble admitting that by their lights Somalia is the freest place on earth.
I was thinking about this recently, and most of the major inventions of the last 50 years seems to have been state funded - the internet, GPS, the space program.
Free markets bring the products based on these to the masses, and incremental improvements but the technologies behind them are often funded by military needs. Most research seems to be done in publicly funded research labs, while the development side of R&D is done in private companies.
Other great examples include things like the US Census and the National Weather Service. It's just enormously more efficient to pay for certain things centrally and make them available to everybody because that enables all sorts of useful business activity. Same for roads, policing, and courts.
As an entrepreneur, I like markets a lot. But as an engineer, I think of them as I would something like state machines or map-reduce or machine learning: amazingly useful in the right circumstances, but not always the right tool for the job.
There is no way it's worth that much. As we saw from the Square IPO ("valued" at $6B+ in their last round of private funding; current post-IPO market cap about half that), the valuations of the past few years are all wildly overstated, just as the pundits have said all along. AirBnB will never be worth that much in a public market.
> I'm getting the impression they don't really have a concern for the community.
Of course they don't. Their "sharing economy" BS is just short-term regulatory capture as a business model: pull together enough money to buy off various politicians, change the laws to suit their business practices, and let someone else deal with the consequences. See the extractive industries and subsequent Superfund sites.
Most of the AirBnB "guests" people have issue with are immediately followed by other AirBnB "guests". Repeat. Repeat. Your once quiet apartment building is now a hotel with a stream of "guests" who treat it as disposable instead of as a home.
My mother lives next to a busy Airbnb. The Airbnb guests regularly wake her up at 2AM by drunkenly pounding on her door. She complained to Airbnb. They don't care.
My previous apartment building (in a tourist area) was full of Airbnb guests partying on the weekends. They caused damage, got into fights with residents, and generally made it feel like living in a hotel.
Airbnb's investors all live in large houses with security and would never tolerate this kind of problem in their own lives.
> My mother lives next to a busy Airbnb. The Airbnb guests regularly wake her up at 2AM by drunkenly pounding on her door. She complained to Airbnb. They don't care.
Were the airbnb rentals legal ? If your mom owns her condo , she'd know that therefore be able to denounce the fraudster to the organisation that manages the building. There is plenty of things your mom can do to force an illegal airbnb rental to shut down.
And why would she complain to airbnb ? it's a well known fact that they don't get involved because it's their business model, all the risk is passed to the landlord and the renter.
Complaining to airbnb is like complaining to a local newspaper ad, craigslist, AWS or another marketing organization for listing something. It's barking up the wrong tree.
You complain to the person who owns the unit, the condo / HOA board, the police and the municipality. Because those are the real people who have the ability to deal with something.
That's too simplistic a picture. AirBNB directly facilitates, receives payment and so on, so they are not the same as a 'marketing organization' or merely a listing company.
Long term rental apartments are removed from the long term rental market and turned into illegal short-term rentals on AirBnB. Owners/renters that do this often have several such properties. This is often done in areas with no shortage of hotel rooms because they can be rented at a lower cost (no tax, no requirement to follow regulations, no inspections, no conformity to hotel fire code, etc). So the long term rental market sees a decrease in available units due to some being illegally sublet as short term rentals. This exacerbates long term rental prices in areas where there is already a shortage of units.
Agreed. I'd also add that it isn't even just about rental prices, it's about an existential threat to the community.
I've noticed that opposition to airbnb is highest in highly residential areas that are also appealing to tourists, partly because of the local culture. The left bank of Paris, various neighborhoods in New York and San Francisco, and the garden district and french quarter in New Orleans. What keeps these neighborhoods great is that the are still places where people are from. "Spare" bedrooms are actually occupied by non-rent generating children rather than revenue-generating boarders. Interesting people, long term residents, a community, exists. This is one reason why the french quarter in new orleans remains more interesting than the recreated french quarter in disneyland.
Airbnb profits massively by converting housing that used to go to people who live in the community into tourist housing. They sell much more than housing, they sell the interestingness of the neighborhood, and the destroy a little bit of each time they do.
Even the "spare room rental to make ends meet" model is a bit risky. This is the least objectionable aspect of airbnb, a local resident hosting people from other places, and making enough money to make ends meet. It's certainly the image airbnb likes to market. But even this does take long term housing off the market. I live in a 3br house in SF, and the two "spare" bedrooms are where my non-rent paying kids live. I don't think a family could be able to win a bidding war against someone who buys the house and factors in the rental income of putting the "spare" bedrooms on to airbnb year-round. SF is already down to under 14% families with children, and while airbnb is hardly the only factor, I think it makes thins worse, not better.
And that's the best scenario. The worst is entire units or houses completely taken off the market for long term residents, and clearly that is also happening on a very large scale.
Prop F lost in San Francisco, but a pretty large margin (about 55-45, which is a pretty solid win for airbnb), but keep in mind, spending was almost 20-1. If it takes a 20-1 funding ratio to win by 55-45, I actually like prop F's chances in anything approaching equal funding.
That equal funding contest may never happen, but there's still plenty of fight left here.
It's a shame that such a wonderful service (a family will be out for a couple of weeks on vacation, they rent their place out here and there) has become such an angry and divisive issue. These rental sites clearly have a good use within proper limits and regulations, maybe we'll get there eventually.
^^ YES ^^
I live in New Orleans, and this is my chief concern about short-term rentals. The guests can be obnoxious, sure, but that alone wouldn't have made this such a hot city-wide issue. The rental market has been changing very rapidly here, partly due to a recent influx of well-off young people, and it's causing a lot of anxiety about what the city will look like in the future.
Maybe you don't need 100% approval (lord knows that would introduce some sort of black market "payoff" system). But frankly, is someone is that disenchanted with your having an Airbnb, that's their right -- if I bought a home in a neighborhood, not next to a hotel.
That said, I also think as a good neighbor, you could lobby your position to such a neighbor. The biggest problem with these cases is no one ever talks to each other.
I hope you enjoyed your recent interview. Please forgive me in the delay in responding to this, but I wanted it to be noticed by you rather.
I work at Airbnb, and I empathize with your feelings. I, too, agree that hosts who list an extreme number of properties, and especially those who rent out properties specifically for the purpose of running a listing, are hurting our community. They are definitely not in line with our mission.
The problem with a blanket policies across the entire site limiting all hosts is that we have so many different use-cases. Some hosts will create multiple listings; one for when they want to rent out their entire home, and others for individual rooms in their home. Sometimes want to rent out their summer home in the winter, and their winter home in the summer. It is a difficult problem, so it makes more sense to remove hosts on an individual basis; either those who provide bad experiences for guests, or those who do not make a positive contribution to the community.
Having neighbors be able to veto a listing sounds like a great idea, but how would you validate who the neighbors are? Especially in remote localities where internet access is limited?
You could make the same argument about all sorts of services. For example, I think Grindr also doesn't care about their community. I have some ideas how to fix it - mainly ensuring users aren't hooking up with more than one person, and that neighbors of a Grindr user have a way to veto a house guest.
To me that sounds kind of insane. I guess I just think that people should be allowed to do whatever they like in the privacy of their own bedroom, provided it doesn't harm others against their will.
> Officials of Airbnb and VRBO (Vacation Rentals by Owner, a HomeAway brand that is popular in New Orleans) point out that they operate in so many places they cannot possibly get into the specifics of local policy; they are merely private businesses offering services to consumers.
Operating in so many places has never stopped chain restaurants or chain stores from getting into the specifics of local policy.
I have no idea how they square this with the standard Silicon Valley notion that we can solve any problem with some technology and a little elbow grease. Every time an AirBnB spokesperson opens their mouth, I become more reluctant to use them despite previously being a happy early adopter.
Definitely. If their CEO would get up there, say, "Honestly, we just don't give a fuck about local regulations," and make dismissive wanking motions, I'd have more respect for them.
I always find it strange that rentals of several weeks to several months are banned (or people try to ban them) in so many places.
What do you do with interns? You're obviously not going to pay them enough to live in a hotel. They're obviously not going to sign 12-month leases.
It seems like there are people who legitimately need to live somewhere for several months at a reasonable price, and are neither tourists nor residents. Did the Prop F people just want all the tech companies to stop hiring interns, and all the universities to stop having visiting scholars, etc?
It's just a normal room, so renting an hotel room for 30 days should cost as much as the rent of an N room apartment shared with N people, but somehow costs can be 3-10 times more.
For instance, typical prices can be 300$ for renting a cheap shared apartment room for a month while the cheapest hotel rooms costs 50$, while they should instead cost 300/30 = 10$.
That's why people use AirBnB and share apartments with roommates for more long term stays, otherwise everyone would just live in hotel rooms, which would be far more efficient and reasonable.
I suspect the problem might be government regulation.
Hotel taxes are not the reason rates are so high. One reason is low average occupancy, another is a lot of people dont pay the list price, and get discounted rates, while others pay more, for additional services, so there is a fair amount of price discrimination going on.
Nothing weird about it. It's to protect the host/landlord. If you rent out a place to someone for 30 or more days in many jurisdictions that person will have long-term tenant rights and it's much much harder to legally kick them out.
Far as I can tell, Prop F would have outlawed all rentals between 60 days and having an actual lease. Does San Francisco law make a separate provision for subletting?
What stuck out is how much emphasis there is on the difficulty of building out support for local policies at a product/service level and pushing the onus onto the host.
On the flip side you have Uber which is succeeding by working through the local policies. The apps themselves have functionality that's location specific (think Eats in NYC but not in NJ).
I do think Airbnb is using the local policies as an excuse and can do more to make themselves more acceptable to cities.
>I do think Airbnb is using the local policies as an excuse and can do more to make themselves more acceptable to cities.
What about the fact the I just would never feel comfortable with strangers walking in and out of my condo building. And I'd imagine this would be case for communities with childeren, people wouldn't want random people from the internet walking around their houses. Thats why there are specific laws and regulations around where hotels can operate.
Would the proposition to the cities that could offer their citizens more more money ( is this proven?) by sacrificing quality of life?
Perhaps there is an argument that you're entitled to a relatively stable set of neighbors, so that you can get to know them and learn which ones to avoid.
But you certainly don't get to choose your neighbors. The US went down that path in the 50s: massive and hugely oppressive racial segregation whose echoes are still being felt.
You are not entitled to decide who does and doesn't walk near your property, only on your property.
I don't feel comfortable sharing a country with Trump supporters, but that doesn't mean I get to prevent them from finding housing.
There is an argument that you're allowed to have a stable set of neighbors. We made it and codified it into law which says that you can't do short term rentals within long term rental units. Even if your lease says it's ok, it's still against the law. That's why all those whole unit apartment rentals you see in NYC are illegal unless the person offering it has a bed and breakfast license for the space. AirBnB won't tell you that your rental is illegal even though they know it is. The illegal whole apartment rentals is how they get most of their revenue in NYC.
The tenants do not get the right to pick their neighbors simply by living in a building, but by being joint members of a corporation which owns the building.
If you live in a plain old apartment building, your landlord can rent neighboring units to whomever he wants.
> your landlord can rent neighboring units to whomever he wants
... As long as he complies with existing federal, state and local laws, as well as existing HOA regulations, you as a neighbor don't have any property rights preventing a rental.
Apartments seems to be a great way for AirBnB and hosts to make buckets of money but then they are creating de facto hotels.
No only "can do" but "must do". Widespread legislation will come. AirBnB needs to invest heavily in building goodwill with municipalities, else they will not be at the table when the legislation is being written. They spent a ton of cash playing defense against Prop F in SF, but they won't be able to afford to put up the same fight in every city.
I think I wasn't clear on the point. They need to communicate their story and the value of the service in every market, as well as start addressing the concerns proactively. There seems to be much more organization from the anit-AirBnB side than the pro-AirBnB side, so they should be investing much more in organization and lobbying as well. Local legislation is always determined by local voters, which is why they need to be seriously investing in a grass roots infrastructure.
AirBnB provides no benefit to local voters and communities, except to the hosts putting the guests up. Possibly hotel tax revenue, which would've been realized regardless through traditional hotel bookings.
I'm not describing 'astroturfing', but rather investing in a grassroots infrastructure. AirBnB wins on legislation when voters want AirBnB. I will agree that while 'astroturfing' best describes AirBnB's current approach to the problem, it is very expensive with limited effectiveness. The NFL is a wonderful counter example here. They employ every tactic possible for getting new stadiums, but nothing is as effective as the outcry from the public over the possibility of losing their football team.
The anti-AirBnB side is absolutely better organized. Why else would AirBnB have to outspend them >10x to stop Prop F?
Or perhaps they're in the wrong? Are you proposing that right and wrong can be determined by measuring political influence? That seems a bit frightening.
This like most problems is yet again a lack of leadership. Lacksadaisical govt when simple regulations voiced by the people could be easily met. Bnb is like an ostrich with it's head in the sand and should follow the law even if one has to be made.
It seems like a lot of these problems could be solved by better enforcement of existing laws, rather than creation of new ones.
For instance, the article has a picture of trash piled up on the sidewalk in front of an AirBnB. Surely there are existing laws or regulations against this. People often mention noise from short-term rentals, there are regulations against this too. The benefits of better enforcement would extend beyond short-term rentals as well, and improve quality of life for all residents.
Other issues, like the "vomit covered floors", seem like strictly private issues to be handled between the host, guest, and possibly the mediation of the rental site.
I'm not saying that better enforcement should be the only solution (it can't deal with larger issues like elevated property prices), but it should certainly be a large part of it.
Better enforcement costs money. Who is going to pay for it? These neighborhoods didn't have such serious problems before so it seems unreasonable that they have to pay for more enforcement just to maintain their quality of life.
The greatest irony is that the founders love to preach "Do things that don't scale". Nothing scales worse then working through legislation with cities around the world, so this should be top priority for them, right?
Not sure if this statement is sarcastic or not, I could read it either way. So I'm going to respond as if it's not a joke.
The heart of the advice is to start solving problems that are hard to solve, and worry about scalability and efficiency after you've proven there is a demand. Often you will find creative ways to gain efficiency, build the infrastructure, and then have a wonderful competitive moat for the business. The big exception is customer service, there is no replacing being able to talk to a helpful person within 60 seconds of encountering a problem, but it's much more expensive to parallelize people then software.
In the case of legislation, getting on offense and working with a few cities will go a long way for establishing a precedent that other cities will follow. Uber was rather effective in this area.
Startups take off because the founders make them take off. There may be a handful that just grew by themselves, but usually it takes some sort of push to get them going.
The most common unscalable thing founders have to do at the start is to recruit users manually.
For as long as they could (which turned out to be surprisingly long), Wufoo sent each new user a hand-written thank you note.
[Meraki] got started by doing something that really doesn't scale: assembling their routers themselves.
When you only have a small number of users, you can sometimes get away with doing by hand things that you plan to automate later.
How is it that "city officials acknowledge that New Orleans simply does not have the resources to enforce this rule — given the 2,400 to 4,000 short-term rental listings on various services", but they had the resources to find those numbers?
The same way I don't have time to collect a sample of every beetle in existence, but do know that there are about 400,000 species of beetle: I asked Google and it told me the answer.
Edit: here is the sign http://i.imgur.com/dAczEnt.jpg