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Airbnb host ordered to pay £100k of unlawful profits after letting council flat
- pessimizer 7y agoOr less interestingly, Airbnb host who made £100K letting council flat fined £100K for letting council flat, an amount determined by how much profit the host made.
- dustinmoris 7y ago> "Anti-fraud software had found Harman's first name in reviews and connected the listing to him." Pretty interesting to me... > "It's illegal for council tenants to sublet their homes and we carry out tenancy checks, as well as monitoring short-term letting websites for any potential illegal sublets." Also pretty interesting to me... it's nice to see that the councils in London are using their own technological advances to fight illegal activity like this!
- iratewizard 7y agoAnd it's lucky that they've now paid off a tenth of the cost of developing the software.
- PunchTornado 7y agoso she lost nothing. good for her, bad for the rest of us. others can do the same, at worst, you lose your profits.
- pessimizer 7y agoI'm very much agreed generally, but in the case of somebody hustling by renting out their council flat, I'm not sure that the worst punishment is useful. This is probably not a wealthy person, and the damage done is theoretical and marginal. Making them pay it back entirely actually might be an onerous burden, it's probably mostly spent. I might reduce the amount by some token per night rented representing having to find somewhere else to sleep or having to share your space with a stranger. Punishing financial crimes to a degree that could have a deterrent effect should start at the top, not at the bottom. Also, IMO, if the UK actually started doing this, its economy might collapse.
- rthrowayay 7y agoIt could be worse as well because either they haven't declared this income and now HMRC will be after them or they have and they might not be able to get a refund from HMRC. I assume this would be considered a business loss and I'm not sure if you can refund past taxes against a present loss.
- PunchTornado 7y ago>should start at the top, not at the bottom then it will never start.
- NLips 7y agoThe source article (https://www.thetimes.co.uk/article/tenant-fined-100-000-and-evicted-for-renting-council-flat-on-airbnb-8wk5g350b https://www.thetimes.co.uk/article/tenant-fined-100-000-and-...) states that the council also have a possession order, meaning the host is also losing their home.
- baq 7y agoneed this in my city, there are whole neighborhoods being built that are hotels in everything but name driving rent and flat prices sky high and making the whole local housing market inaffordable for normal people.
- lawnchair_larry 7y agoWhat does “letting council flat” mean in US english?
- grumpwagon 7y agoRenting public (housing) apartment.
- davefp 7y agorenting a subsidized apartment
- Sholmesy 7y agoCouncil flats are like "government subsidized living". Letting it out (aka renting it out), is taking money from the government, intended to help you shelter your family, and using it to turn a profit.
- deleted 7y ago[deleted]
- aclelland 7y agoA "council flat" would be an apartment which is owned by the local government. The person who the council thought was living there was essentially sub-leasing it to people through Airbnb which is against the lease rules.
- digestives 7y agoRenting out public housing
- deleted 7y ago[deleted]
- lumberjack 7y agoA council flat is an apartment rented as part of a socialized housing scheme to low-income households. Usually the rent is much much much lower than renting on the free housing market. Sub-letting is usually explicitly forbidden when you are part of one of these schemes.
- Sholmesy 7y agoI live in a building in Central London (Soho) that has 12 flats. We pay market rate for ours, that is supposed to help the housing association offset the cost of some of the other flats that are designated as social housing. Most of these flats are just constantly churning Airbnb guests in and out, some of the others have lodgers (also illegal, friend of mine lived in one of them, hence why I know). I don't know what to do with this information, but its such a shame that people are so comfortably scamming the government, when it's literally funded by all of us. EDIT: per the responses, I have called the council and they were very keen/interested. Thanks for your input.
- vidarh 7y agoWestminster council has a form to report potentially unauthorised short term letting: https://www.westminster.gov.uk/nightly-letting-complaints-form https://www.westminster.gov.uk/nightly-letting-complaints-fo... (It's not specific to council housing; if it's specifically council housing as opposed to the developer just agreeing to let it at a reduced rate, then they'll take an even dimmer view on it; if it's the developer or some management company then it's worth contacting them as well as it may impact their insurance etc.)
- Sholmesy 7y agoRight, I "know" what to do; but I don't know if it's "right" for me to get involved. Appreciate the link; I'll report it tonight.
- crispyporkbites 7y agoShouldn't Airbnb also pay back all of the fees they charged for this?
- swiley 7y agoI’ve never quite understood why subletting is illigal in places like this. Person A needs money because rent is high, person B needs housing because housing is scarce, A rents B their couch and everyone is happy. Obviously that’s a little different than just sticking the whole thing on Airbnb, but it looks to me like it’s legally considered the same when it really shouldn’t be.
- DougN7 7y agoIf A is getting subsidized housing they’re earning taking others’ taxes and profiting from it. I’d say they’re not entitled to the subsidy in that case.
- swiley 7y agoI get what you’re saying but I’m still not convinced it totally makes sense. The goal of subsidized housing is to make housing more affordable for some group of people, subletting likely has the same effect so the money subsidizing the building is still going to the same thing.
- cldellow 7y agoI think the argument would be something like this: Renting on Airbnb has the effect of subsidizing this one person's housing, not of subsidizing the community's housing. If the goal is to use Airbnb to increase social housing opportunities, the council should do it directly, so any excess profit can be reinvested in new housing for more than just one person.
- vorpalhex 7y agoYou're running a business with somebodies charity - that's a no go. If I give you $50 to buy food and you run a lemonade stand with $25 of it, then you've abused my charity. Now, it might be that I shouldn't have given you the $50, or that we should have discussed giving you a business loan instead - those things are fine. There's nothing fundamentally bad about running a lemonade stand. You simply can't run a lemonade stand with charity earmarked for not-lemonade-stands.
- p_roz 7y agoBuild more housing capacity. An increased supply of housing could support both long term housing and legal Airbnb rentals. Because of static supply, the two use cases are competing in a zero sum way, but that needn’t be the case.
- vidarh 7y agoIn this case the issue was outright fraud: They got a council flat that is meant to provide subsidized housing for people who generally can not afford private housing, and profited from it against the terms of his rental agreement. But in the general case, I keep arguing the same. In the UK there's a very strong trend to focus on landlords and foreign buyers leaving housing empty, or cases like in this article, but when you dig into it, it makes up a tiny proportion of properties. The government has contributed to pushing the focus to these types of things, even though e.g. all empty properties in the UK being filled would maybe cover ~6 months of demand (and you can't fill all of them - most are empty for things like refurbishments or during a sale; very few are left intentionally empty for long periods of time). I doubt AirBnB demand would add up to more than a rounding error either. But it's a convenient excuse, and much cheaper than to drive higher growth in construction.
- gnode 7y agoThe UK definitely needs more overall housing capacity, and there is plenty of land which is not built on. Although I don't think this is the issue here, where the area is already full of dense residential and commercial buildings. Subsidised housing in such areas is an effort to resist displacement and social change caused by gentrification. Permitting subletting of such housing turns the subsidy into no more than a monetary benefit, which fails to stop the unwanted demographic changes the government is aiming to prevent.
- TeMPOraL 7y ago> Build more housing capacity. An increased supply of housing could support both long term housing and legal Airbnb rentals. I keep hearing "build more housing", but I'm having a hard time seeing how it can help on its own, if housing is primarily bought up by people playing investment schemes, and people who want to rent it out. It wouldn't have to just outpace population growth, it would have to outpace the ability to rent flats at a profit, in order to dry out the pool of investors and let regular people have a chance at buying a place to live.
- rthrowayay 7y agoI think there is a strong temptation for this when there is a large gap between the value of the social housing to the occupant and the value of the social housing on the market. This flat is in Victoria which is quite central in London. I would expect you could provide more social housing at the same cost in some of the outer zones. There is obviously a trade off where the increased amount of housing from going further out is not worth the inconvenience to the occupants. However, I would expect this trade off kicks in well outside of zone 1. For the sake of argument let's assume you could double the zone 1 social housing by moving it to zone 2/3. That seems like a pretty big failure in policy.
- crispyporkbites 7y agoZone 1 - zone 2/3 is not bad, but what actually happens is people are moved from zone 1 to some random town 40 miles away (because it's WAY cheaper to do that). These people don't have cars, they are the least well off people in our society, often physically, mentally and materially. Their entire support system, friends, family etc. are ripped up from beneath them. They end up never rejoining the economy and the cycle continues. These are people so we can't just shift them where we want to. Here's an example from Zone 1: https://www.standard.co.uk/news/london/residents-of-the-heygate-estate-forced-to-move-out-of-london-8743216.html https://www.standard.co.uk/news/london/residents-of-the-heyg... These people OWNED their flats, they were compulsory purchased from them at ridiculously low rates, demolished and replaced with luxury flats. The only option for these people was to move from their 2 bed flat to a new studio or leave London.
- dustinmoris 7y agoSome of the most expensive places in London are outside Zone 1 (Hampstead, Richmond, Kensington, West Brompton, Wimbledon, etc.). Also creating a high density of social housing aka ghettos is not desirable for any city in the world and those who have it have big problems because of it. London has huge inequality problems, but the fact that you can have a millionaires road only 5 minutes away from a council estate has the advantage that social issues are not just being ignored and brushed under the carpet by forcing people as far away as possible, it creates more diverse and accepting communities, it ensures that people from all different fortunes have access to nice parks, good transport links (which are even more important for people who are on low income), etc.
- crispyporkbites 7y agoFor those who aren't from the UK, a council flat is an apartment owned by the local government, with subsidized or free rent for people who can't afford to rent in the area. Residents are means tested (i.e. availability is based on income / special situations). People at considerable risk on the streets tend to be prioritised in the waiting list (families, single women). This man was eligible, lived in the apartment at some point, but took £110 a night from airbnb guests and lived elsewhere when guests stayed. Sub-letting council flats is illegal, but pretty common as it's basically impossible to stop on a cash in hand basis. However, a platform like AirBnB could easily block this activity from happening on their platform, if they wanted to.
- FrozenTuna 7y agoI love AirBnB on paper, but in practice, its just too ripe with issues. So many similarities to Uber too. Socialize the costs, privatize the revenue. Use litigation to fight to keep the loopholes open. At least Uber isn't screwing with the housing market, that I know of.
- kasperni 7y agoI think we all had high hopes for the "Sharing Economy". But instead we ended up with a "Sharing But Not Caring Economy". Giant corporations trying to create a monopoly with any means possible.
- AJ007 7y agoI think ultimately it is up to regulators to determine how to deal with these companies / platforms. They are legal entities and can be targeted, unlike open source software projects and protocols. I can add a lot of opinions as to if these companies are a net positive or negative, but overall the regulators have a disproportionate amount of firepower compared to these companies. Airbnb first time offense for Miami Beach is $20,000 and doubles after that. All of these companies know that, and it is why they so aggressively fight the regulatory side. Uber certainly got a lot of tailwinds due to regulatory capture backlash from local cab companies. Airbnb, to some extent because of dislike or outright unavailability of hotels. Some markets were much healthier and well regulated than others pre-Uber/ Airbnb. Some hotel/transport markets were a disaster. In summary, if the regulatory frameworks are crafted in the right way, for whatever the given market is, everyone is better off save for previously well entrenched business. I’m not sure there is actually enough talent, globally, to accomplish that on a individual local market level.
- jayventura 7y ago"Socialize the costs, privatize the revenue." Sounds like most industries actually, where externalities are passed on to society. E.g. resource extraction.
- parthdesai 7y ago> "We regularly remind hosts to check and follow local rules - including on subsidised housing - and we take action on issues brought to our attention," said a spokeswoman. Bull fucking shit.