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I've had this argument with several people. Their position is that "it's my house/apartment, I should be able to do what I want with it" (even when renting they

• davidw 13y ago
  The term that's involved in this is "externality": costs that are imposed on people not involved in the actual transaction (use of the place for payment). http://en.wikipedia.org/wiki/Externality http://en.wikipedia.org/wiki/Externality You rightly point out, that, for instance, in a crowded apartment building, having something like a dynamite storage facility would probably be a bad idea. However, other things might be annoying too, such as having children or pets or noisy sex, so you have to 1) get an idea of the actual costs involved, and not just "well, this could happen", and 2) see if there's a framework where people could regulate/resolve their differences on a more local level. Perhaps in some buildings, people would be ok with some AirBnB traffic if they get a small cut of it. The idea being that the more global the solution, the more likely it's going to be inefficient.
  • tomkarlo 13y ago
    At some point, the cost of adjusting for the externalities will erase the savings of AirBnB. Which would indicate that the much of the "benefit" of AirBnB simply comes from not paying for the externalities. Beyond the neighbors, there would also need to be city taxes to pay for the regulation and oversight of the rental (and fire inspections, etc), and the use of city services by visitors (who probably don't pay income taxes in that city.) Basically, "hotel tax", which in some places is 20% or more and right now you don't pay when using AirBnB. Not to mention additional liability insurance, as you can bet that the level of risk incurred by someone doing short-term rentals is much higher than a normal homeowner -- so they shouldn't be in the same risk pool.
    • davidw 13y ago
      Some of the benefit is certainly from skirting regulations, but I can see some big benefits to accessing a much wider range of options, too, so there might well be a place for AirBnB even if it were taxed/regulated a bit more, rather than simply banned.
      • tomkarlo 13y ago
        That's fine, but it's unproven that the AirBnB market works at all if renters have to pay 20%+ hotel taxes and apartment owners have to pay income tax. It would both raise the effective rates and greatly decrease the received benefit to the seller -- there might not be a clearing market any more. I'd consider renting my spare room for $100 a night, but not for $40.
        • gknoy 13y ago
          I'm pretty sure that the hosts still have to pay income tax, if they are getting paid money for having someone stay in their house.
          • tomkarlo 13y ago
            They're supposed to. How many do you think actually are?
            • Aloisius 13y ago
              Probably about the same percent as individuals who rent out their apartment long-term?
              • tomkarlo 13y ago
                I doubt it. Landlords have to count rent as aggregate gross income on their tax returns, and it's probably both fairly easy to get caught and fairly serious if you do get caught. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Rental-Income-and-Expenses---Real-Estate-Tax-Tips http://www.irs.gov/Businesses/Small-Businesses-&-Self-Em... (If you're just subletting, only any net gain is taxable, which is probably minor.)
  • sliverstorm 13y ago
    Yeah, AirBnB basically seems to be an exercise in converting externalities into profit.
    • rayiner 13y ago
      Much of what we consider to be profitable, high-growth business is about taking advantage of market failures. E.g. the advertising industry that bankrolls the internet is basically about taking advantage of cognitive biases to get people to make irrational purchasing decisions. Part of the success of e-commerce is due to the heroic efforts of UPS, etc, in reducing the cost of shipping over the years to make e-tailing cheaper than brick and mortar retailing, but a big part is also arbitraging on state sales tax laws. This is not a moral judgment (I'm too old to make moral judgments). Fact is that purely competitive markets suck because there is no money in them (there's no high growth startups in the dairy industry, even with extensive government subsidies to offset the effects of vicious competition). A good fraction of the opportunities to make money are based on things like arbitraging regulations or exploiting market failures. Much of the rest involves focusing on markets with little competition (either because it's new or because others don't have the skills to target them), but I think people underestimate how much activity is in the former bucket. E.g. with AirBnB: are they in business because nobody thought to do what they're doing before, or because people thought about it before but realized it was illegal?
      • maxerickson 13y ago
        http://www.businessinsider.com/the-success-story-of-chobani-yogurt-2013-5 http://www.businessinsider.com/the-success-story-of-chobani-... But maybe that is the exception that proves the rule. Or maybe you didn't mean dairy products.
        • rayiner 13y ago
          Chobani is unusual in that it brought a different product to the market that was objectively better. There are other new players in the dairy industry, but a lot of that action is applying lifestyle marketing to food products (e.g. getting people to pay more for trendy food when they could get the same food for much less without the lifestyle brand). Think about stuff like flavored water--a product that couldn't get more fungible that exists because marketing makes it seem non-fungible.
  • baddox 13y ago
    Pointing out the existence of externalities is not sufficient. You need to show why government (loosely defined here as an organization with a well-accepted legal monopoly on the use of violence to resolve conflicts) will lead to fewer negative externalities than other means of conflict resolution.
• radiusq 13y ago
  Your argument is completely shallow and void of reason.. > You can't, for example, run a tannery in your apartment Why not? Whats your argument? >What's more, as a resident (and especially if I were an owner) I wouldn't want my building being a de facto hotel. If I owned a building then I set the rules/laws. This is about property rights, not about what you think is right or wrong. If I want to turn my home into a transient hotel then I should have the right to do so. Existing residents should abide by my rules under the current terms of their lease. >Imagine the scenario if an AirBnBer does this with say a cigarette? And what if an existing resident did that? Whats your point? You completely leave out any actual reasoning to support your statements. A very shallow argument.
  • ta26262 13y ago
    > > You can't, for example, run a tannery in your apartment > Why not? Whats your argument? Because it smells bad: http://en.wikipedia.org/wiki/Tanning#History http://en.wikipedia.org/wiki/Tanning#History
  • evan_ 13y ago
    >> You can't, for example, run a tannery in your apartment > Why not? Because tanning hides requires strong acid and a bunch of other chemicals and it will stink up the building and probably break some kind of regulation for residential spaces. If you happen to be a tanner and you disagree with it, pretend he said "Nuclear reactor" or "shooting range".
  • Jun8 13y ago
    Owning a building and an apartment are different things. If you own an apartment or condo, you are bound by the home owner's association rules, which can be pretty limiting.
    • tomkarlo 13y ago
      Even if you own a building, you are still subject to zoning laws and other regulations like the fire code.
  • scott_s 13y ago
• dev_jim 13y ago
  Agree. AirBnB is the ultimate John Galt system in NYC. Apartment renters get cash for their apartment (that they usually don't even own) and then everyone else in the building gets to deals with the fallout of a revolving set of neighbors who share the lobby, amenities, hallways, and walls. Good riddance.
  • durango 13y ago
    When you forced to pay $300/night in Manhattan at the W hotel, Atlas Shrugged. Not a AR fan btw, just saying both sides of the fence have their pros and cons. I'd place higher value on an apartment complex that explicitly did not allow short-term renting within their contract. The other problem is... what's the difference between me using AirBNB and me knowing a friend who let me stayed at his place for 6 days and I just happened to give him some money as a thank you gift?
    • dev_jim 13y ago
      > When you forced to pay $300/night in Manhattan at the W hotel, Atlas Shrugged. No one is "forcing" you to spend $300/night in Manhattan for a hotel. You should read that book again because you are also not using "Atlas Shrugged" in a meaningful context. > Not a AR fan btw, just saying both sides of the fence have their pros and cons. I'd place higher value on an apartment complex that explicitly did not allow short-term renting within their contract. Laws and regulations around housing are put in place to protect all residents, the landlord, the community, regardless of what Joe the landlord remembered or didn't remember to put into his stock lease. > The other problem is... what's the difference between me using AirBNB and me knowing a friend who let me stayed at his place for 6 days and I just happened to give him some money as a thank you gift? And what's the difference between cooking for friends who give you money for groceries and opening a restaurant in your apartment? You can always make an argument that appeals to the extreme in making your case, but thankfully that doesn't make it a legally relevant argument.
      • dragonwriter 13y ago
        > what's the difference between me using AirBNB and me knowing a friend who let me stayed at his place for 6 days and I just happened to give him some money as a thank you gift? Its the difference between an informal, non-contracted exchange of gifts between parties known to each other with an established relationship on the one hand, and a contractual, arms-length agreement between strangers through a third-party intermediary with arms-length contractual relationships with both parties on the other. As a general rule, in most domains, the latter tends to be subject to greater regulation than the former, both because, as an arms-length agreement, there is greater need for protection from abuse and, as a contractual agreement, it necessarily invokes the threat of state action.
• baby 13y ago
  I can't agree more with you, and in the mean time I feel really bad because AirBnB is a blessing in this world. There's no real efficient way to enforce such a law though, I don't really know for the US but we have many craig-list style websites in France where you can find a place to rent for a week (and avoid AirBnB's fee). AirBnB just made everything simpler, and safe (rating people, profiles, etc...) One more thing. AirBnB is especially relevent in big cities like New York, Hong Kong, ... where hotels are super expensive and rent as well.
• brudgers 13y ago
  Oh, its more serious than that. (IANAL) Using a dwelling for short term rental may be a violation of the covenants upon the deed and may allow someone previously holding title to the land to reclaim it - this is why Home Owner Associations are obligated to enforce the regulations of deed restricted communities and what allows them to impose sanctions against violators. I once was involved with a waterfront parcel deeded to the city for a park in the 1920's. It was never developed as such and an adjacent property owner - a trauma surgeon - offered to purchase it. I became involved nine years on after the surgeon had tracked down and obtained a quit-claim from all the surviving heirs of the previous owners. That was in 2002 as part of the city's approval of the sale.
• baddox 13y ago
  > You can't, for example, run a tannery in your apartment. I would prefer that you could, in the (perhaps unlikely) scenario that it was allowed by the terms of your rental agreement. If it's your own property, go right ahead. > What's more, as a resident (and especially if I were an owner) I wouldn't want my building being a de facto hotel. Many residents would probably agree, and if enough agree, then there's no reason why the property owner couldn't prohibit the practice in the rental agreements. I live in San Francisco, where airbnb is legal (as far as I know), yet my property owner explicitly prohibits "short term subleasing," effectively banning airbnb rentals. No law or government action required, no criminals made, no taxpayer-funded enforcement, and no problem.
  • JohnTHaller 13y ago
    Every lease I've seen of my group of friends prohibits subletting without express permission of the landlord/owner. It's already the standard in NYC. Realistically, every AirBNB within a rental unit in NYC is likely violating the terms of their lease.
    • oijaf888 13y ago
      It might say that but is that an actual enforceable provision?
      • FelixP 13y ago
        Yes, absolutely. My family has evicted tenants from some of our units for repeatedly violating this clause of their leases.
        • oijaf888 13y ago
          It seems in NYC at least, the landlord can't refuse to let someone sublet so long as they are properly notified and the sublet is reasonable. The way most leases are written though, it makes it sound as if the landlord has the final say vs it defaulting to permitted (with notification) unless the landlord makes a good case why it should be denied.
• snambi 13y ago
  if someone owns the property, they should be able to rent their house or condo. Illegal sounds like city is trying to protect other businesses such as established hotels. Define, the rules, so that people can follow them.
• chrisbaus 13y ago
  In my opinion, this should be left to the owners of the specific building and not a city wide restriction. I own a property in Florida and the HOA restricts rentals less than a month. It isn't necessary for the municipality to get involved.
• voidlogic 13y ago
  >>Imagine the scenario if an AirBnBer does this with say a cigarette? How is the situation different if you have a friend stay over night? What if they house sit for you a couple of days? The only difference above is they are not paying you, but how does that affect liability?
  • namdnay 13y ago
    Your home insurance will cover damage caused by friends staying over. They won't cover damage caused by customers of your (undeclared) business.
• DanBlake 13y ago
  The tannery thing is a bad example because its not a inherently illegal activity. Renting out units under 30 days is plain and simple illegal as the laws are written. With that, a much better example would be running a brothel. It is as cut and dry illegal as this is. Both have city laws saying "This is not allowed". The city certainly has more priority in enforcing one over the other mind you. You can argue all day airbnbing your unit should not be illegal, but it currently is. Lots of people argue prostitution should be legal though as well, so best of luck.
• fragsworth 13y ago
  > What's more, as a resident (and especially if I were an owner) I wouldn't want my building being a de facto hotel. An endless stream of people coming and going, having building keys and so on. I can understand your desire to have things this way, but as an individual, I see no reason why you would want to force this rule on everyone in your city. If you don't want your neighbors renting their place out, go live in an apartment complex that doesn't allow tenants to do this. If you don't want your tenants doing this, then make it against the terms of your rental agreement. What business licensing really does is foster a kind of local monopoly, often as a favor to the existing businesses. It's anti-competitive, by making it very difficult to start a business. Most people are completely unaware of these very real motives behind local licensing laws.
  • FelixP 13y ago
    > If you don't want your tenants doing this, then make it against the terms of your rental agreement. It's actually a violation of most standard residential rental agreements; sub-tenancy is often tightly controlled and only permitted with the express permission of the landlord. Source: my family owns apartment buildings in several different cities.
  • bcgraham 13y ago
    It probably is against the rental agreements for most of the people doing it.
• willbill 13y ago
  One of the main problems I have with it is that in New York, I know of people who are doing a taking account AirBnb rates when calculating a break even for their sublets/extra rooms. This will push rents up in the city and ultimately not help a lot of the actual residents.
• doughj3 13y ago
  > I believe short stay (<30 days) like this was always illegal in NYC. If by "always illegal" you mean "since two years ago": http://skift.com/2013/01/07/airbnbs-growing-pains-mirrored-in-new-york-city-where-half-its-listings-are-illegal-rentals/ http://skift.com/2013/01/07/airbnbs-growing-pains-mirrored-i...
  • uptown 13y ago
    Separate from that law, literally every New York lease I've ever seen has included terms forbidding the rental behavior that AirBNB promotes, and I'd be surprised if the bylaws of every co-op didn't include house rules forbidding this type of activity. Some condos may be more-flexible in their laws - but there's always been a pretty-strong legal framework in-place forbidding re-renting an apartment in this manner.