New York City

Airbnb Scandal! New York Attorney General Concerned Citizens May Be Satisfying Needs with Their Apartments


New York's Attorney General's office has just issued a report on "Airbnb in the City," studying the impact of the service that allows humans to easily find other humans who might want to pay to stay in their domiciles for short periods.

Since this sort of lodging service has largely heretofore been dominated by businesses calling themselves "hotels," regulated and taxed in specific ways by localities and states, entrenched interests in both business and government feel bedeviled by this innovation of the tech-enabled "sharing economy" that makes finding paying use for idle resources easier and cheaper for everyone.

Some of the AG's findings, examining Airbnb from 2010-June 2014, include a tenfold increase in Airbnb bookings, $282 million in revenue (including both the service and the hosts), and, hmm, 72 percent of Airbnb units violating some local law or another (again, while, overwhelmingly, making both renters and temporary tenants happy).

Also, the AG report finds a small number of people controllling lots of units dominate the NYC market:

Ninety-four percent of Airbnb hosts offered at most two unique units during the Review Period. But the remaining six percent of hosts dominated the platform during that period, offering up to hundreds of unique units, accepting 36 percent of private short-term bookings, and receiving $168 million, 37 percent of all host revenue. ….Each of the top 12 New York City operations on Airbnb during that period earnedrevenue exceeding $1 million

This, naturally, makes fewer units available for long-term lodging. This seems like an obvious bad thing, to people who have decided more long-term lodging is better for them, or the city, or just their sense of how things should go.

Why that value judgement should mean anything when lively demand for that many short term rentals clearly exists is unclear, but the AG's office seems to think that to merely state this fact is tantamount to some sort of call to action.

The reports details some of the specific regulations likely being broken by Airbnb operators, and notes, again as if this should matter to you, that:

Bookings in just three Community Districts in Manhattan—the Lower East Side/Chinatown, Chelsea/Hell's Kitchen, and Greenwich Village/SoHo—accounted for approximately $187 million in revenue to hosts, or more than 40 percent of private stay revenue to hosts during the Review Period. By contrast, all the reservations in three boroughs (Queens, Staten Island, and the Bronx) brought hosts revenue of $12 million—less than three percent of the New York City total.)

I mean, the AG's office doesn't need to rub it in to Queens, Staten Island, and the Bronx that way fewer people want overnight visits there, but his office is cruel and judgmental.

The AG's office notes it finds the growth in the use of Airbnb "staggering." Some might just call it useful, nice, good for them, or who cares? (Or, sure, I'm pissed seeing a new couple stagger in to the apartment next door every night.) But the AG is staggered.

Mostly, I suspect, staggered by the $33 million in taxes his office believes the city of New York should be owed on all this making-people-happy, the vast majority of which it isn't getting because it's a pretty easy tax to evade with Airbnb's technology.

The report goes on to groan a lot about the alleged shifting of property use from long term rental to short term in the city, which again may annoy someone personally or upset their sense of the "way things ought to be."

But Airbnb allows for people to express their true desires, as both property controllers and property users, and needn't be condemned just for that reason. Unless you are the sort of civic busybody type who just knows exactly how everyone else's property should be used and what choices everyone else should make. Alas, America's government and media are all too full of those sorts of civic busybodies.

Gothamist joins in an attempt to make really great things seem really bad by throwing in arbitrary negatively valued phrases such as that the concentration of Airbnb rentals in lower Manhattan means that "Lower Manhattanites are taking a beating" and that it's "startling" that some people controlling lots of units use Airbnb to fill them with willing guests.

A ReasonTV video from last August on Airbnb—and its enemies: