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Since its inception in 2008, Airbnb has hosted over 60 million guests in over 34 million cities, in over 190 countries. Only 16% of that happened in the U.S. If you’re not impressed by those numbers, remember that there’s a good chance at least 33.9 million of those cities have great hotels, and people choose to use Airbnb instead. People literally choose to rent a room in someone’s house over an undeniably clean and safe hotel.

Business Success & Legal Battles.

The company was started by three young men in San Francisco, who are now in their early 30s. INC Magazine rated Airbnb the 2014 Company Of The Year, and this year they were CNBC’s #2 top disruptor company, right after Uber. But as successful as the company has been, they have faced quite a few legal battles.

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In 2011, New York City law prohibited anyone from renting an apartment for less than 30-days, rendering Airbnb basically illegal in the 5 boroughs...not that that stops people from renting, or Airbnb from providing their service. The rule makes sense, really...especially for luxury apartment owners. People who spend more than 5,000 a month to rent in NYC don’t want strangers wandering their halls because they’re renting out a neighbor’s place for the weekend. It is a genuine safety issue and a moral good/bad neighbor issue.  

One anonymous Airbnb renter in Nashville that spoke to us disagrees with that concept, saying that as long as the complex management is aware, it shouldn’t be a problem. He states, “I’ve never received a single complaint. I’m not sure if people know that we even run an Airbnb… they might have figured it out by now if they’ve spoken to our guests - but I’ve never heard of anything and management hasn’t been reported any issues related to our rooms or any others nearby.”

travelAn anonymous NYC renter posted a blog on Brick Underground discussing how he manages to make $14k per month, basically paying his rent, by charging just $99 a night, which is much less than most NYC hotels. He’s taking a great risk, but was smart in posting the blog anonymously. The concept makes sense at first glance, especially if you’re like this guy and you travel a lot for your work. You end up paying rent for a place that you barely live in. Airbnb is the perfect solution, and I don’t blame anyone for ignoring the law on that.

The law technically states that an exception will be made if the renter is in the apartment when the rentees are there. I guess this allows owners to have friends stay over...or, it just means you can lie and say you were in the apartment when you rented the whole thing out to a stranger.

Trouble In San Francisco

It’s always a fun time when your hometown tries to sue you. That’s what the guys at Airbnb were saying earlier this summer when the city of San Francisco tried to charge the company upwards of $1,000/day for each unregistered listing. San Francisco, like most cities, has a law that states any rental property must be registered as such with the city. Airbnb users who do not register their properties as rental homes are in violation. Airbnb rightfully says that they, as a company, are not liable. In their official statement, the company said, “Instead of punishing Airbnb for publishing unlawful listings, the city could enforce its short-term rental law directly against hosts who violate it.”

How Does It Affect The Housing Market?

Deeply. Especially in cities like London, where a crisis is already in place. In London, there is a small company called BellBoi that exists in the legal gray area of Airbnb rentals, solely serving the purpose of providing a place for renters to exchange keys and such with guests. Currently, this is more of a moral issue than a legal one. In a time where homelessness is rising and homes are becoming less and less available, people are buying what’s left and renting them out to tourists. Legally, it’s like a game of “first come, first serve.”

Short-term rental was illegal in London up until late last year, when housing minister Brandon Lewis introduced a deregulation bill to enact more freedoms and allow householders to essentially do whatever they want with their homes, which may include making extra money. San Diego, L.A., NYC, Berlin, and several other cities around the world are boasting the same complaints, but it’s still a legal gray area. A regulatory bill may not pass in the U.S. because it would definitely cross the property freedom line, but there are moral grounds to consider.

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On the other hand, according to our anonymous interviewee, “Legislation can change on a dime and the hotel lobby is insanely strong.  There’s nothing they hate more than Airbnb’s… which is exactly why you see legislation in New York and San Francisco.  It’s absurd… and it cuts into actual people just wanting to rent out their homes in a lot of cases - which helps a lot of people meet mortgage payments.  Airbnb is a great for local economies too because you just drastically increased the amount of people who can afford to stay and spend money in your city.”

How sketchy is it really?

Renters and Rentees don’t always actually meet, and don’t always actually go through any kind of security check, other than Airbnb making sure that both parties are real people with ID. Those real people could very easily be meth addicts or serial killers, and neither would know. As either the renter or rentee, you can read reviews on the other person and choose to only stay with or rent to someone with good reviews. Other tips for staying safe include choosing people with long and detailed descriptions, dealing with payments in advance, do a little research on the area to make sure the description matches, and stay away from people who ask too many unnecessarily personal questions. Hopefully you can avoid situations like this.

Through their ID system, Airbnb does a very quick criminal record and sex offender check on all users, but it’s important to remember that certain things can fall through the holes. Also, a guest may bring four friends with them who didn’t go through the check. You can never be sure. Airbnb users have to know that they’re taking a risk.

Airbnb supplies their own insurance to owners, but apartment buildings often require that owners have their own separate insurance.

Other Services

Airbnb users often use other sites, like guesty, to help manage their service.

What you may not realize is that Airbnb is not the only service of its kind on the market. Popular travel website and reviewing service Trip Advisor owns its own similar service called Flip Key. Flip Key works the same way as Airbnb, and some might argue that it is a better service purely because of its connection to Trip Advisor. The websites are connected so that you can find a place near the attractions that you most want to visit and simultaneously see those user reviews. It’s a one-stop shop, something that Airbnb offers as well but is much less established. Maybe that’s something we’ll see in the future.

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HomeAway, with over a million listings, is easily Airbnb’s biggest competitor. Airbnb has more than double that many listings and is the fastest growing, largely because of their marketing success.

You can read about some of the other competitors here.

Business Travel

Airbnb sees business travel as a separate entity, allowing employers to actually book rooms for their employees. Using the regular Airbnb secure ID system, a renter cannot book for someone else because the IDs would not match. However, with this feature, an employer can book with a company card and have an employee check in.

The Benefits For The Traveler

Have you ever gone to a new city, stayed in a 5-star hotel, and then left feeling relaxed and rejuvenated? Well, you probably didn’t experience the city very much. The tourism industry is heavily manufactured, especially in major U.S. cities. Renting an airbnb gives you a chance to see how the locals live. Walk local neighborhoods, take local roads, and eat at local restaurants instead of buying into hotel recommendations and expensive cab rides. This couple is spending their retirement Airbnb-hoping.

The Benefits For The Renter

In an ever-changing job market, Airbnb is a great way to earn some extra cash, even if you don’t turn it into your own empire. Initial costs are high if you’re running your own Airbnb empire and not just renting out your own space. Our anonymous interviewee states, “Buying furniture in the first place is also a huge expense, but once you recoup it then you’re set.  We usually spend between $8,000 and $12,000 per apartment.  We usually get our money back in 2-3 months per apartment.”

Live Here

Either way, renters are forced to learn how to run their own business. Unless you want to dish out a lot of extra money and probably not earn it back, you’ll be doing all the work on your own - photography, marketing, cleaning and home design, handling your own finances...it’s all up to you. You can read about these men who turned their Airbnb businesses into empires here.


www.Dishmag.com / Issue 185 - September 2018
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