I am intrigued by the antipathy that is often expressed toward Airbnb in the very circles where technological changes is heartily approved. Much of this antipathy is centered around the issue of persons who use the service to circumvent local laws and regulations governing hotel and rental units, with the complaint being that illicit profiteers should be suitably punished and (impliedly) so should those whose services allegedly abet them. This piece makes that complaint without stating it directly dramatizing the fact that such a person is there, in the flesh, exploiting the system, while stating that Airbnb wants to deny his existence.
Legally speaking, Airbnb is like YouTube and similar services in offering a service that is perfectly legal to do in proper cases and that can be done today to the immeasurable benefit of many in ways that could not even have been dreamed of in the pre-internet age. When the service is used legally and properly, it transforms how millions of people do things in their lives and does so for the better: in YouTube's case, as an outlet for video display and in Airbnb's, as a way of helping all sorts of people make more efficient use of their residential holdings. When the service is misused, however, others can be hurt: in YouTube's case, with persons posting and potentially profiting by infringing the copyrights of others; in Airbnb's, with persons attempting to circumvent laws regulating uses of commercial rental space. In each case, there is legitimate reason for many to complain of the misuses because they hurt people and people react to being hurt, and the law has measures in place to punish the direct malefactors in various ways. Yet what does this mean, legally speaking, for the provider of a lawful and, indeed, exceedingly useful service that is seen to profit in part from the activities of those who not only use their service legally but also from those who do not.
When you get to such cases, you arrive at the intersection of law with public policy. Unless one is to bar technological progress and the change that it brings altogether, one must devise rules to address the illegal uses that are bad while preserving incentives to promote the technological progress that is good.
In the case of YouTube, this was done through DMCA, which (whatever its other problems) did a pretty good job of setting up safe harbors that enable services such as YouTube to continue to do what they do without incurring liabilities for the wrongs of malefactors while at the same time requiring them to build in safeguards to protect the rights of those who might be hurt by their wrongs. This was not an easy task and even today the courts are sorting through the frictions occurring at the edges. But, though not perfect, the law has set up fundamental rules that, in the end, have managed to curb a good number of the wrongs while enabling a worthwhile service to survive and prosper.
In the case of Airbnb, the fights are occurring at the local level and are at an early stage. As the players sort through the policy issues, though, the same sort of primary issue needs to be addressed as happened with YouTube in the video streaming area: how can the rights of victims of third-party wrongdoers be protected without barring or significantly impairing the new-found value for many in using a great new service wrought by technological advances (and, of course, by the skills and talents of those who have built the service)?
I don't know the New York rental market at all and have nothing to say about how the issue is best resolved for the various persons affected by Airbnb's service there. I sense intuitively, though, that things like "15% across-the-board tax" are innately retrograde solutions that would serve to choke the beneficial and legal side of the service. Occasional users really are not in the business of providing hotel lodgings and it is a pretty big leap to say that they should be required to pay taxes as if they were. Or to require them to be subjected to liabilities and risks in ways that hotels are. These "solutions" are really just a way of governmental regulators, should they adopt the, acting on behalf of some narrow lobbing interest or other to choke a service that benefits countless others. They are overkill and would be the same as if Congress, at the federal level, had passed laws saying that YouTube-style services should be banned because they can facilitate copyright infringement that hurts others. That sort of "solution" would have been folly in our digital age and so too would any overkill-style governmental solution affecting any beneficial and innovative technologically-driven service that can come about by linking what people have to offer with what people need to use, and that includes Airbnb. Many other such services can easily follow (the "Airbnb for food" or the "Airbnb for whatever"). Do we really want to choke off the great benefits that can come from all this just because third-party abuses can arise.
The key to all this is to deal with the abuses while preserving the values conferred by the new services. If there is antipathy toward the wrongdoers, there is no basis for directing this to the innovators themselves. Why this should be happening among those who otherwise favor technological change is something that really baffles me. I for one commend Airbnb for what they are doing and for the benefits it can bring to many. If they make fortunes out of it all, so much the better. The potential third-party abuses do need to be dealt with so that innocent people are not harmed. But they need to be dealt with in narrow ways focused on the actual problems, not in blunderbuss fashion that is short-sighted and, in the long run, harmful to us all.
Somehow, every other VRBO site (such as VRBO.com) manages to comply with local laws. AirBnB doesn't--by choice. It refuses to comply with local laws because this lets it avoid the costs of compliance. Ultimately, AirBnB's competitive edge over its competitors is simply regulatory arbitrage.
This is why AirBnB generates such apathy. Take the regulatory arbitrage away and AirBnB isn't a technical startup or a market disruptor; it's just another VRBO site with pretty CSS.
They are overkill and would be the same as if Congress, at the federal level, had passed laws saying that YouTube-style services should be banned because they can facilitate copyright infringement that hurts others.
No, completely different, and as a lawyer you know this. Local issues are valid concerns for local laws. If New York wants to pass an across the board tax on temporary rentals, it is absolutely not the same as if Congress passed a country-wide ban on Youtube-style service.
The key to all this is to deal with the abuses while preserving the values conferred by the new services. If there is antipathy toward the wrongdoers, there is no basis for directing this to the innovators themselves.
Existing laws already do this. And as a business that injects itself into the market governed by such laws, AirBnB has taken on the burden of complying with such laws. Moreover, AirBnB isn't an innovator--it's a copycat. The only innovation AirBnB provided was sub-unit rentals (i.e., just a room or a couch), which is no longer the mainstay of its business.
You may be guilty of making a false equivalency between YouTube and AirBnB. Both are online, both are operating in legal grey zones. That does not mean antipathy toward one must necessarily be the same as antipathy toward another. Copyright might have been overdue for a significant rethinking. That doesn't mean that property rights are equivalently overdue.
AirBnB threatens a vastly wider swath of people than YouTube ever did. If you don't understand why people do not want to share a neighborhood or a residential tower with transients, perhaps you've never had to deal with the fallout and quality of life issues. Ever had to deal with bedbugs? I think I'd rather be stabbed and spend a day in the ER than have to deal with them again.
Unlike YouTube, which has tons of legitimate uses for folks uploading their own content, Airbnb is basically built on the illegal uses in its major markets like NYC. The places in NYC on Airbnb that are illegal aren't some annoying minority. Every single offering on Airbnb that is for less than 30 days and is not operated by a licensed hotel is illegal. Every single one. Unlike YouTube which has significant legitimate uses in all markets based on original content (and is a majority of what YouTube is used for), Airbnb has no legal uses in NYC for sublets of less than 30 days.
If Airbnb wanted to operate legally and protect the rights of its legitimate customers while still preventing illegal activities (as you are suggesting they do), it would only permit rentals of 30 days or more unless the 'host' has a hotel license and the proper permits. The simple fact is that Airbnb knows its business in NYC is nearly entirely built on illegal rentals and doesn't care.
The difference between AirBnB and YouTube is obvious. There are vast arrays of ways in which the average person can use YouTube without any question that such uses are legal.
Conversly, there are very few ways in which the average person - whether renter or rented, can use AirBnB in a way that is unquestionably legal. Few local jurisdictions allow the sort of transactions AirBnB is built upon facilitating, and even fewer allow such use without at least some minimal regulatory oversight such as business licenses and tax reporting.
The reason is the same as for other land use issues, adjoining and nearby properties are effected and real property cannot be moved. Transient lodging uses place unique stresses on a community, and their benefits tend not to accrue to nearby properties with orthogonal uses.
The better analogy would be Craigslist if Craigslist only advertised prostitution related material. Then we would stop pretending that there is wide spread legality and focus in on whether existing laws make sense, and striving to change them where they don't.
Amongst other things, I think a fair number of us have had asshole neighbors, at one point or another -- or several.
Any service that appears to increase that likelihood, I will oppose.
And no, I don't think it should be up to me to individually invest in pursuing each and every case -- particularly when there may be a new case every few days or weeks or I don't know when.
Real, stable tenants (hopefully) have an investment in keeping or finding peace with their community. Or, they can be compelled to do so.
Hotels cost more. Some of that may be "bad", but there is also a reason -- it costs more to deal effectively with transient populations.
From my perspective.
P.S. There is also the security factor. I don't want to live in a "hotel" where the faces change every day and I end up not knowing what the fuck is going on.
> Legally speaking, Airbnb is like YouTube and similar services in offering a service that is perfectly legal to do in proper cases
Is there actually a legal use case? I can imagine that this law is virtually unenforceable against private individuals renting out a spare room for a few days, but I suspect it still (notionally) applies.
My antipathy towards AirBNB comes because my experiments using AirBNB exposed me to:
- hosts using fake names
- hosts using fake addresses
- hosts giving deeply inaccurate descriptions
- hosts telling me that the super might swing by, and I should introduce myself as (some other name) friend of (another name I'd never heard) if I ran into him.
- neighbors of the unit giving me the stink eye, presumably because of what other guests had done.
My personal experience leads me to believe that AirBNB is, at it's heart, a platform that is built to create negative externalities. The processes in place to correct these issues are non-existent, which indicates to me that AirBNB knows this, and does not care.
> The Man Who Does Not Exist tells me he is a libertarian, an Ayn Rand disciple, and, in the parlance of Silicon Valley, views himself a disrupter.
Making money by breaking regulations and lease terms is hardly the stuff of the heroic inventor. What other criminals count as "disrputers"? Insider traders? Identity thieves? Insurance fraudsters?
This guy is sociopath and I hope he ends up in prison.
> He considers himself a New York entrepreneur who wants to make a buck and doesn’t have much patience for what he views as arbitrary rules and regulations, such as those that govern renting apartments to Airbnb subscribers.
I don't see how this guy is any different from Airbnb itself (or other disruptive-and-dubiously-legal operations like the various digital gypsy cab companies).
You also have to also ask why it is that these arbitrage opportunities exist in the first place. It seems to me that the fact that these folks exist is essentially the market arguing that there are inefficiencies in government regulation of the hotel industry. Perhaps the government shouldn't be implementing arbitrary taxes to direct to the politically connected.
> This guy is sociopath and I hope he ends up in prison.
Woah, that escalated quickly. This type of comment is more what I would expect from a sociopath then the mostly harmless individual described in this article. Don't you have any empathy for him? Have you considered that the author might not have depicted him in an accurate way? Don't you think prison would be a disproportionate punishment for his alleged crimes? Geez, the world is not black and white.
I think you're conflating morality and legality. How does breaking regulations make him a sociopath? Who is he harming?
In what world is renting an apartment, albeit against regulation and terms of the lease, an offense ANYWHERE NEAR insider trading, identity theft, or insurance fraud?
Yeah, I hate the fact that his actions will have for consequence to even increase the rents and real estate prices in New York, which, from what I heard, are already expensive enough.
That's pretty much as far from "libertarian Ayn Rand disciple" as you can get. This Man That Does Not Exist sounds more like a Libertarian Straw Man, serving the purposes of a writer with an authoritarian streak.
The guy doesn't exist. The whole article is a work of fiction. Pando must be desperate for traffic.
> After dropping out of college, the Man took a job in high-frequency trading when he was 20, where, he claims, he made a killing.
Are we supposed to believe that a person who dropped out of college, with no computer science or programming background, is hired by a hedge fund or the proprietary trading desk of a large bank to help develop their HFT software and algorithms?
He knows that neighbors despise what he's doing, but he doesn't see any reason for us to have hotel regulations. That might stop him from making money.
Must be nice to go through life believing you're entitled to ignore externalities that cause discomfort to others, or not pay for public goods that you benefit from. Keeps things simple when you just have to worry about getting what's yours.
I don't think AirBNB actually claims this guy doesn't exist - that's a clickbait gimmick. What they do claim is that he's in the minority, which I believe is true.
I'm an AirBNB host in NYC and I know a lot of other people who are too. We're all exactly the kind of people AirBNB wants -- we have places that occasionally are available/empty, and AirBNB has become a great way for us to make a few extra $$. I personally don't make a dime of profit off my place (I do, however, offset a good portion of my rent).
I know the bad actors exist, and I know we do need some form of compromise between "No AirBNB!" and "AirBNB free-for-all". Not sure what the perfect solution is just yet, but I m confident a good one can be found.
* Sub-leasing is legal in NYC, for medium-term rentals. You are free to sub-lease your place during your month in europe, you are not free to sub-lease it nightly to transients.
* Owner-occupied Bed-and-Breakfasts are legal, but carefully regulated.
If AirBnB restricted itself to listings in these two (completely legal) categories, no one would object to them.
I've been making tourist apartments available online since 2001, long before Airbnb (a competitor for me) even existed, and I never heard anyone in any city ever complain about tourist apartments, be it Prague, Venice or Paris.
What happens is that a certain, usually small, percentage of residential apartments is made available to the tourists.
Each apartment means about one/two less hotel rooms.
Hotel rooms take space too, they are not floating over the city.
They often replace old residential buildings to build hotels effectively taking away space from residents who are pushed out of the city.
So we may say that tourism takes space in the center, not apartments.
I didn't hear much complain about this neither, as tourism brings money and, if anything, they want more of them.
It seems to me that NY has a very specific situation so Airbnb may be actually harming the residents, I don't know, but in general Airbnb is not doing anything particularly new in Europe, where apartments for short term rent have been existing for long time.
The hype is all about "rent from another human being" but the reality, and I guess most of their business in Europe, is simply providing a better platform.
Maybe NY regulators could look at Prague or Croatia to solve the problem.
Why does AirBnb even allow more than one listing per user? How many people have multiple residences which they can legitimately rent out legally? It seems like it would stem a lot of criticism if they only allowed one residence per user, along with real-name and address verification (which they already use for renters).
I'm impressed by how much hate is directed in the comments to the guy in the article. Seems like a lot of people here are either jealous about this guy "hacking the system", or are just too self-righteous.
Why not instead use the article (as it was probably intended) as a way to think and debate about things that are hard to agree on or that are hard to define?
This caught my attention for example: "The Man Who Does Not Exist claims regulations that govern rental apartments are akin to drug laws. They are useless, unenforceable, and an affront to the general public.", and although I don't have a strong opinion about hotel regulation in NY (or elsewhere), I do agree that current drug laws pretty much only benefit government agencies (they get funding) and drug cartels (by artificially raising prices).
I approve of the law as it stands. Hotel taxes and hotel regulation improve my quality of life.
He breaks the law for money. As a result, I would like to see him punished.
(As a secondary matter, he is loathsome for defrauding his landlords -- renting out space to be used as a hotel is a much higher-risk proposition than a long term residence)
But while drug laws are primarily intended to restrict access to one resource (drugs), hotel regulations are intended to ensure that a resource (living space) is available and only as a side effect restrict another resource (hotel rooms).
The analogy also fails because while drug laws are motivated by health/moral concerns, hotel regulations are to a large extend motivated by the fact that the common resource required by both tenants and hotels is limited simply by the amount of available space in NYC,. This restraint on the available space would effect the outcome of a perfectly free market to be rather bad™, since it would turn the whole of the city (and most other popular cities) into one large hotel without any permanent residents.
I'd be surprised if he actually thinks this (though only mildly) - Some business activities are zero-sum, but in general business exists precisely because it's not a zero sum game.
He's a criminal. Of course his business is zero sum. His profits and the consumer surpluses of his customers are balanced against the losses to society.
>Current laws, for example, include a tax that goes directly to the Javits Convention Center — a place scant numbers of New Yorkers have ever visited.
And yet which brings thousands and thousands of visitors to New York (with spending and lodging money) yearly. Move the Javits Center to Jersey and the surrounding hotels, restaurants and immeneties suddenly have very little reason to be there.
In theory that's how convention centers should work. In practice, the Javits Center is isolated by the surrounding railyards and few desirable amenities have sprung up in the area.
(This may finally change in a few years' time with the opening of the Hudson Yards redevelopment and the western extension of the 7 subway - so of course it's been proposed to tear down Javits and build a new convention center at the even more isolated Aqueduct Racetrack site. Ugh.)
> After dropping out of college, the Man took a job in high-frequency trading when he was 20, where, he claims, he made a killing.
> Thus far, he's found two properties that fit the bill. He charges around $500 a night for the first one; this second one is set to launch in the coming weeks with a similar price tag. He’s received funding from outside investors...
Parts of this story seem odd. If the Man Who Does Not Exist made a "killing" in finance, why exactly does he need or want investors for this venture? It sounds like the investment required is relatively modest and would quickly be recouped. And I can't imagine that increasing the number of people formally involved in his illegal enterprise will be to his benefit when, for one reason or another, the gig is up.
What's so hefty about a 15% tax? Just pay the city the 15% and pocket the rest. If you need to, raise the price a bit.
Assuming your rent is 500$/month, to give one room to some random person for a night you should charge them 20$/night to offset your entire rent for that day after deducing the city tax. The person in the article charges 500$/night. In that case you can even charge 50$/night and make money on top of having enough to pay rent.
In no case would you need to charge more than a hotel - you both pay 15% tax, but you don't need to pay a whole hotel's worth of workers for that room's upkeep.
There are other issues, in many jurisdictions being a legally zoned hotel requires things like sprinklers that the average AirBNB lister might be unwilling or unable (in the case of a renter) to invest in.
The Man Who Does Not Exist tells me he is a libertarian, an Ayn Rand disciple, and, in the parlance of Silicon Valley, views himself a disrupter. Business is a zero-sum game...
It would be so nice if journalists who write about "Ayn Rand disciples" would actually read something by her first, so they would know what they're talking about.
There seems to be some confusion about the term "externality" in this thread that I want to clarify.
Not every effect that a person has on someone else is an externality. In general, externalities are direct physical impacts you have on others. In this case, noise is a good example, though the general "vibe" of having strangers moving in and out, and the risk of violence from these people, assuming it is higher, is also an externality.
On the other hand, anything that operates via prices is never an externality. If AirBnB increased demand for rental housing and therefore raises prices, this wouldn't constitute an externality.
The ethics of free market economics basically states that the government should regulate externalities, but if someone is only effecting you via market prices, that's your own problem.
Another kind of externaility is network externalities. Even though pricing residential housing out of the market isn't itself an externality, there may be a network externality associated with residential housing which means that the market wouldn't provide the optimal balance of residential housing and hotels (even if there was no noise issue). Because of this, the government may also want to intervene by restricting the total amount of hotels. However, I doubt this is a big factor in real life since the demand for hotels is clearly much smaller than the demand for residential housing (who spends more than a tiny fraction of their life in a hotel?)
"According to NYC Research and Analytics, the average price for a hotel room in New York City is $281 a night. That’s for all five the boroughs. In Manhattan, it’s hard to find a room for under $350. Add that hefty 15 percent tax and lodging in Manhattan is an activity for the 1 percent."
Yes, hotels in Manhatten are expensive, but calling it an activity for the 1% is a stretch. The rhetoric of 99%/1% was in response to 1% of US earners taking 20% of total income, at an average of like $400,000.
Not sure why, but instinctually, I really do not like the man who does not exist. Perhaps it's because I am an Ayn Rand hating libertarian. Or perhaps it's because he is the kind of man who takes advantage of the market with little to no regard to externalities, and when someone questions his actions, he wraps himself in an American Flag and screams about his god given rights.
If you're going to break the law, why go to the trouble of forming a Delaware LLC? Won't that draw more attention to the operation and result in double taxation? Doesn't it also mean breaking Delaware law by forming a corporation for illegal purposes? Title 8, Chapter 1 says "A corporation may be incorporated or organized under this chapter to conduct or promote any lawful business or purposes..."
Furthermore, he takes all these steps to avoid 15% hotel tax, but pays 30% on the LLC profits and then pays income tax when he takes earnings from the LLC?
[+] [-] grellas|12 years ago|reply
Legally speaking, Airbnb is like YouTube and similar services in offering a service that is perfectly legal to do in proper cases and that can be done today to the immeasurable benefit of many in ways that could not even have been dreamed of in the pre-internet age. When the service is used legally and properly, it transforms how millions of people do things in their lives and does so for the better: in YouTube's case, as an outlet for video display and in Airbnb's, as a way of helping all sorts of people make more efficient use of their residential holdings. When the service is misused, however, others can be hurt: in YouTube's case, with persons posting and potentially profiting by infringing the copyrights of others; in Airbnb's, with persons attempting to circumvent laws regulating uses of commercial rental space. In each case, there is legitimate reason for many to complain of the misuses because they hurt people and people react to being hurt, and the law has measures in place to punish the direct malefactors in various ways. Yet what does this mean, legally speaking, for the provider of a lawful and, indeed, exceedingly useful service that is seen to profit in part from the activities of those who not only use their service legally but also from those who do not.
When you get to such cases, you arrive at the intersection of law with public policy. Unless one is to bar technological progress and the change that it brings altogether, one must devise rules to address the illegal uses that are bad while preserving incentives to promote the technological progress that is good.
In the case of YouTube, this was done through DMCA, which (whatever its other problems) did a pretty good job of setting up safe harbors that enable services such as YouTube to continue to do what they do without incurring liabilities for the wrongs of malefactors while at the same time requiring them to build in safeguards to protect the rights of those who might be hurt by their wrongs. This was not an easy task and even today the courts are sorting through the frictions occurring at the edges. But, though not perfect, the law has set up fundamental rules that, in the end, have managed to curb a good number of the wrongs while enabling a worthwhile service to survive and prosper.
In the case of Airbnb, the fights are occurring at the local level and are at an early stage. As the players sort through the policy issues, though, the same sort of primary issue needs to be addressed as happened with YouTube in the video streaming area: how can the rights of victims of third-party wrongdoers be protected without barring or significantly impairing the new-found value for many in using a great new service wrought by technological advances (and, of course, by the skills and talents of those who have built the service)?
I don't know the New York rental market at all and have nothing to say about how the issue is best resolved for the various persons affected by Airbnb's service there. I sense intuitively, though, that things like "15% across-the-board tax" are innately retrograde solutions that would serve to choke the beneficial and legal side of the service. Occasional users really are not in the business of providing hotel lodgings and it is a pretty big leap to say that they should be required to pay taxes as if they were. Or to require them to be subjected to liabilities and risks in ways that hotels are. These "solutions" are really just a way of governmental regulators, should they adopt the, acting on behalf of some narrow lobbing interest or other to choke a service that benefits countless others. They are overkill and would be the same as if Congress, at the federal level, had passed laws saying that YouTube-style services should be banned because they can facilitate copyright infringement that hurts others. That sort of "solution" would have been folly in our digital age and so too would any overkill-style governmental solution affecting any beneficial and innovative technologically-driven service that can come about by linking what people have to offer with what people need to use, and that includes Airbnb. Many other such services can easily follow (the "Airbnb for food" or the "Airbnb for whatever"). Do we really want to choke off the great benefits that can come from all this just because third-party abuses can arise.
The key to all this is to deal with the abuses while preserving the values conferred by the new services. If there is antipathy toward the wrongdoers, there is no basis for directing this to the innovators themselves. Why this should be happening among those who otherwise favor technological change is something that really baffles me. I for one commend Airbnb for what they are doing and for the benefits it can bring to many. If they make fortunes out of it all, so much the better. The potential third-party abuses do need to be dealt with so that innocent people are not harmed. But they need to be dealt with in narrow ways focused on the actual problems, not in blunderbuss fashion that is short-sighted and, in the long run, harmful to us all.
[+] [-] gamblor956|12 years ago|reply
This is why AirBnB generates such apathy. Take the regulatory arbitrage away and AirBnB isn't a technical startup or a market disruptor; it's just another VRBO site with pretty CSS.
They are overkill and would be the same as if Congress, at the federal level, had passed laws saying that YouTube-style services should be banned because they can facilitate copyright infringement that hurts others.
No, completely different, and as a lawyer you know this. Local issues are valid concerns for local laws. If New York wants to pass an across the board tax on temporary rentals, it is absolutely not the same as if Congress passed a country-wide ban on Youtube-style service.
The key to all this is to deal with the abuses while preserving the values conferred by the new services. If there is antipathy toward the wrongdoers, there is no basis for directing this to the innovators themselves.
Existing laws already do this. And as a business that injects itself into the market governed by such laws, AirBnB has taken on the burden of complying with such laws. Moreover, AirBnB isn't an innovator--it's a copycat. The only innovation AirBnB provided was sub-unit rentals (i.e., just a room or a couch), which is no longer the mainstay of its business.
[+] [-] jquery|12 years ago|reply
AirBnB threatens a vastly wider swath of people than YouTube ever did. If you don't understand why people do not want to share a neighborhood or a residential tower with transients, perhaps you've never had to deal with the fallout and quality of life issues. Ever had to deal with bedbugs? I think I'd rather be stabbed and spend a day in the ER than have to deal with them again.
[+] [-] JohnTHaller|12 years ago|reply
If Airbnb wanted to operate legally and protect the rights of its legitimate customers while still preventing illegal activities (as you are suggesting they do), it would only permit rentals of 30 days or more unless the 'host' has a hotel license and the proper permits. The simple fact is that Airbnb knows its business in NYC is nearly entirely built on illegal rentals and doesn't care.
[+] [-] brudgers|12 years ago|reply
The difference between AirBnB and YouTube is obvious. There are vast arrays of ways in which the average person can use YouTube without any question that such uses are legal.
Conversly, there are very few ways in which the average person - whether renter or rented, can use AirBnB in a way that is unquestionably legal. Few local jurisdictions allow the sort of transactions AirBnB is built upon facilitating, and even fewer allow such use without at least some minimal regulatory oversight such as business licenses and tax reporting.
The reason is the same as for other land use issues, adjoining and nearby properties are effected and real property cannot be moved. Transient lodging uses place unique stresses on a community, and their benefits tend not to accrue to nearby properties with orthogonal uses.
The better analogy would be Craigslist if Craigslist only advertised prostitution related material. Then we would stop pretending that there is wide spread legality and focus in on whether existing laws make sense, and striving to change them where they don't.
[+] [-] pasbesoin|12 years ago|reply
Any service that appears to increase that likelihood, I will oppose.
And no, I don't think it should be up to me to individually invest in pursuing each and every case -- particularly when there may be a new case every few days or weeks or I don't know when.
Real, stable tenants (hopefully) have an investment in keeping or finding peace with their community. Or, they can be compelled to do so.
Hotels cost more. Some of that may be "bad", but there is also a reason -- it costs more to deal effectively with transient populations.
From my perspective.
P.S. There is also the security factor. I don't want to live in a "hotel" where the faces change every day and I end up not knowing what the fuck is going on.
P.P.S. And bedbugs. Etc.
[+] [-] lmm|12 years ago|reply
Is there actually a legal use case? I can imagine that this law is virtually unenforceable against private individuals renting out a spare room for a few days, but I suspect it still (notionally) applies.
[+] [-] hbags|12 years ago|reply
- hosts using fake names - hosts using fake addresses - hosts giving deeply inaccurate descriptions - hosts telling me that the super might swing by, and I should introduce myself as (some other name) friend of (another name I'd never heard) if I ran into him. - neighbors of the unit giving me the stink eye, presumably because of what other guests had done.
My personal experience leads me to believe that AirBNB is, at it's heart, a platform that is built to create negative externalities. The processes in place to correct these issues are non-existent, which indicates to me that AirBNB knows this, and does not care.
[+] [-] bradleyjg|12 years ago|reply
Making money by breaking regulations and lease terms is hardly the stuff of the heroic inventor. What other criminals count as "disrputers"? Insider traders? Identity thieves? Insurance fraudsters?
This guy is sociopath and I hope he ends up in prison.
[+] [-] ForHackernews|12 years ago|reply
I don't see how this guy is any different from Airbnb itself (or other disruptive-and-dubiously-legal operations like the various digital gypsy cab companies).
[+] [-] aliston|12 years ago|reply
[+] [-] olalonde|12 years ago|reply
Woah, that escalated quickly. This type of comment is more what I would expect from a sociopath then the mostly harmless individual described in this article. Don't you have any empathy for him? Have you considered that the author might not have depicted him in an accurate way? Don't you think prison would be a disproportionate punishment for his alleged crimes? Geez, the world is not black and white.
[+] [-] ErikAugust|12 years ago|reply
He is a step or two above a drug dealer. That's about where I would land him.
[+] [-] coderzach|12 years ago|reply
In what world is renting an apartment, albeit against regulation and terms of the lease, an offense ANYWHERE NEAR insider trading, identity theft, or insurance fraud?
Am I missing something?
[+] [-] S4M|12 years ago|reply
[+] [-] moocowduckquack|12 years ago|reply
[+] [-] unknown|12 years ago|reply
[deleted]
[+] [-] bjornsing|12 years ago|reply
> Business is a zero-sum game.
That's pretty much as far from "libertarian Ayn Rand disciple" as you can get. This Man That Does Not Exist sounds more like a Libertarian Straw Man, serving the purposes of a writer with an authoritarian streak.
[+] [-] yapcguy|12 years ago|reply
> After dropping out of college, the Man took a job in high-frequency trading when he was 20, where, he claims, he made a killing.
Are we supposed to believe that a person who dropped out of college, with no computer science or programming background, is hired by a hedge fund or the proprietary trading desk of a large bank to help develop their HFT software and algorithms?
[+] [-] trippy_biscuits|12 years ago|reply
[+] [-] hapless|12 years ago|reply
Color me surprised that he's a Rand disciple.
[+] [-] RockyMcNuts|12 years ago|reply
[+] [-] nlh|12 years ago|reply
I'm an AirBNB host in NYC and I know a lot of other people who are too. We're all exactly the kind of people AirBNB wants -- we have places that occasionally are available/empty, and AirBNB has become a great way for us to make a few extra $$. I personally don't make a dime of profit off my place (I do, however, offset a good portion of my rent).
I know the bad actors exist, and I know we do need some form of compromise between "No AirBNB!" and "AirBNB free-for-all". Not sure what the perfect solution is just yet, but I m confident a good one can be found.
[+] [-] hapless|12 years ago|reply
* Sub-leasing is legal in NYC, for medium-term rentals. You are free to sub-lease your place during your month in europe, you are not free to sub-lease it nightly to transients.
* Owner-occupied Bed-and-Breakfasts are legal, but carefully regulated.
If AirBnB restricted itself to listings in these two (completely legal) categories, no one would object to them.
[+] [-] Lucadg|12 years ago|reply
What happens is that a certain, usually small, percentage of residential apartments is made available to the tourists.
Each apartment means about one/two less hotel rooms.
Hotel rooms take space too, they are not floating over the city. They often replace old residential buildings to build hotels effectively taking away space from residents who are pushed out of the city.
So we may say that tourism takes space in the center, not apartments.
I didn't hear much complain about this neither, as tourism brings money and, if anything, they want more of them. It seems to me that NY has a very specific situation so Airbnb may be actually harming the residents, I don't know, but in general Airbnb is not doing anything particularly new in Europe, where apartments for short term rent have been existing for long time.
The hype is all about "rent from another human being" but the reality, and I guess most of their business in Europe, is simply providing a better platform.
Maybe NY regulators could look at Prague or Croatia to solve the problem.
[edit: formatting]
[+] [-] alanctgardner2|12 years ago|reply
[+] [-] nico|12 years ago|reply
Why not instead use the article (as it was probably intended) as a way to think and debate about things that are hard to agree on or that are hard to define?
This caught my attention for example: "The Man Who Does Not Exist claims regulations that govern rental apartments are akin to drug laws. They are useless, unenforceable, and an affront to the general public.", and although I don't have a strong opinion about hotel regulation in NY (or elsewhere), I do agree that current drug laws pretty much only benefit government agencies (they get funding) and drug cartels (by artificially raising prices).
[+] [-] hapless|12 years ago|reply
He breaks the law for money. As a result, I would like to see him punished.
(As a secondary matter, he is loathsome for defrauding his landlords -- renting out space to be used as a hotel is a much higher-risk proposition than a long term residence)
[+] [-] claudius|12 years ago|reply
The analogy also fails because while drug laws are motivated by health/moral concerns, hotel regulations are to a large extend motivated by the fact that the common resource required by both tenants and hotels is limited simply by the amount of available space in NYC,. This restraint on the available space would effect the outcome of a perfectly free market to be rather bad™, since it would turn the whole of the city (and most other popular cities) into one large hotel without any permanent residents.
[+] [-] dllthomas|12 years ago|reply
I'd be surprised if he actually thinks this (though only mildly) - Some business activities are zero-sum, but in general business exists precisely because it's not a zero sum game.
[+] [-] hapless|12 years ago|reply
[+] [-] joelgrus|12 years ago|reply
[+] [-] marquis|12 years ago|reply
And yet which brings thousands and thousands of visitors to New York (with spending and lodging money) yearly. Move the Javits Center to Jersey and the surrounding hotels, restaurants and immeneties suddenly have very little reason to be there.
[+] [-] bbanyc|12 years ago|reply
(This may finally change in a few years' time with the opening of the Hudson Yards redevelopment and the western extension of the 7 subway - so of course it's been proposed to tear down Javits and build a new convention center at the even more isolated Aqueduct Racetrack site. Ugh.)
[+] [-] 7Figures2Commas|12 years ago|reply
> Thus far, he's found two properties that fit the bill. He charges around $500 a night for the first one; this second one is set to launch in the coming weeks with a similar price tag. He’s received funding from outside investors...
Parts of this story seem odd. If the Man Who Does Not Exist made a "killing" in finance, why exactly does he need or want investors for this venture? It sounds like the investment required is relatively modest and would quickly be recouped. And I can't imagine that increasing the number of people formally involved in his illegal enterprise will be to his benefit when, for one reason or another, the gig is up.
[+] [-] johnbpetersen|12 years ago|reply
[+] [-] yetanotherphd|12 years ago|reply
[+] [-] trimbo|12 years ago|reply
[+] [-] anon4|12 years ago|reply
Assuming your rent is 500$/month, to give one room to some random person for a night you should charge them 20$/night to offset your entire rent for that day after deducing the city tax. The person in the article charges 500$/night. In that case you can even charge 50$/night and make money on top of having enough to pay rent.
In no case would you need to charge more than a hotel - you both pay 15% tax, but you don't need to pay a whole hotel's worth of workers for that room's upkeep.
[+] [-] exhilaration|12 years ago|reply
[+] [-] CamperBob2|12 years ago|reply
It would be so nice if journalists who write about "Ayn Rand disciples" would actually read something by her first, so they would know what they're talking about.
[+] [-] jasonwocky|12 years ago|reply
[+] [-] mcguire|12 years ago|reply
[+] [-] yetanotherphd|12 years ago|reply
Not every effect that a person has on someone else is an externality. In general, externalities are direct physical impacts you have on others. In this case, noise is a good example, though the general "vibe" of having strangers moving in and out, and the risk of violence from these people, assuming it is higher, is also an externality.
On the other hand, anything that operates via prices is never an externality. If AirBnB increased demand for rental housing and therefore raises prices, this wouldn't constitute an externality.
The ethics of free market economics basically states that the government should regulate externalities, but if someone is only effecting you via market prices, that's your own problem.
Another kind of externaility is network externalities. Even though pricing residential housing out of the market isn't itself an externality, there may be a network externality associated with residential housing which means that the market wouldn't provide the optimal balance of residential housing and hotels (even if there was no noise issue). Because of this, the government may also want to intervene by restricting the total amount of hotels. However, I doubt this is a big factor in real life since the demand for hotels is clearly much smaller than the demand for residential housing (who spends more than a tiny fraction of their life in a hotel?)
[+] [-] zachrose|12 years ago|reply
Yes, hotels in Manhatten are expensive, but calling it an activity for the 1% is a stretch. The rhetoric of 99%/1% was in response to 1% of US earners taking 20% of total income, at an average of like $400,000.
[+] [-] x0054|12 years ago|reply
[+] [-] ErikAugust|12 years ago|reply
No, sounds like easy-to-pull-off arbitrage models fit him.
[+] [-] bluepool|12 years ago|reply
[+] [-] RubberSoul|12 years ago|reply
Furthermore, he takes all these steps to avoid 15% hotel tax, but pays 30% on the LLC profits and then pays income tax when he takes earnings from the LLC?
Am I missing something here?
[+] [-] xacaxulu|12 years ago|reply