New York Times: What You Need to Know About Airbnb, the Internet-Driven Homes That Have Taken Over Our Cities
By Daniel Bice | 10/16/17 12:01pm EDT | Updated 10/17/17 10:07pm EDTA new report by the Institute for Justice (IJ) on Airbnb, a rental-sharing service that has exploded in popularity in the last year, finds that “the companies’ business model has made it impossible for most of the state’s cities and towns to keep up.”
In New York, where Airbnb is the dominant housing provider, Airbnb has set up homes in just 12 percent of the city’s residences.
In San Francisco, where the company is more dominant, Airbnb’s share of rentals is as high as 25 percent.
The report’s authors, who included researchers from the University of Michigan and Cornell, say the results underscore the critical importance of protecting housing stock in cities and communities as the city faces a housing shortage and the citywide foreclosure crisis.
The report also found that Airbnb’s “rent-seeking business model is the single most important factor that has enabled the rapid growth of the platform.”
While the housing stock problem in New York and San Francisco is not a new problem, the report’s researchers argue that Airbnb has created a system that is both unsustainable and ineffective.
In the face of this problem, Airbnb is making a big gamble by “exacerbating the problems in neighborhoods and communities by expanding the housing supply,” they write.
The new report comes as Airbnb is under scrutiny by the Justice Department for allegedly allowing “hundreds of thousands of dollars of income” from rental-shopping through Airbnb to a handful of people in Florida and Ohio.
The Justice Department also announced last month that it will investigate Airbnb for violating the Fair Housing Act by allowing its hosts to collect rent from tenants for the duration of their stay, while avoiding a rent tax.
Airbnb did not immediately respond to a request for comment.
The company’s top executive, Anthony Levandowski, was also fired from his position as a top executive position with the company after the Justice Office reported that he used Airbnb to rent a room in his home to an 18-year-old female student for the last three months of 2017, a violation of the company’s policies.
A second report by IJ also found Airbnb’s business model to be unsustainable, saying it has “made it impossible to maintain the quality of rental housing available to New York’s rental housing stock.”
In addition to the state housing shortage, Airbnb faces a growing wave of foreclosures in New Jersey, which have resulted in thousands of people losing their homes.
The New Jersey Housing Authority (NJHA), which manages New Jersey’s housing stock, is now struggling to meet demand from Airbnb and other new home rental platforms.
The agency has had to make cuts in its services, which include home inspections, emergency shelter referrals and other services, the NJHA said in a statement to ABC News.
The NJHA also reported that the agency had to suspend its rental assistance program because of “increased demand.”
The state’s homebuyers and sellers are being asked to file for bankruptcy, which would require the state to cover the losses.
The IJ report found that there are no federal or state laws regulating the housing industry.
Instead, the Justice report cites a federal law that prohibits the federal government from regulating the “business model, operation, or practice of rental home-sharing services.”
The report adds that there is no national law requiring states to regulate or regulate the industry.
The Justice Department has filed several lawsuits against Airbnb.
The department has also filed an official complaint with the New York Attorney General’s office over alleged violations of the Fair Labor Standards Act.