Airbnb Pits Neighbor Against Neighbor in Tourist-Friendly New Orleans
nytimes.com
nytimes.com
Edit: here is the sign http://i.imgur.com/dAczEnt.jpg
They'd probably tell you to get off the premises ASAP and move to evict your host.
I don't think that's their biggest problem.
Let's pretend for a moment Airbnb wanted to really bring value to travelers, hosts AND communities. What would they do to ensure the community at large benefitted?
I have some ideas, mainly around ensuring users aren't listing more than one property and that neighbors of a listing have a way to veto a listing. But I'm getting the impression they don't really have a concern for the community. Which is ironic because their next play seems to be bringing a more cultural experience to Airbnb travel. It would be pretty hard to give someone a good cultural experience if they arrived at their Airbnb space and everyone in the neighborhood was ready to give the visitor the stink eye.
Given most people are not Airbnb hosts, I have to imagine unless the company does some major community outreach in the next few years, they're gonna run afoul of some grassroots headwind.
Of course they don't. Their "sharing economy" BS is just short-term regulatory capture as a business model: pull together enough money to buy off various politicians, change the laws to suit their business practices, and let someone else deal with the consequences. See the extractive industries and subsequent Superfund sites.
This would destroy them. The reason Airbnb has grown far beyond what investors (and even the founders, probably) expected it to is because of individuals buying up and renting out large numbers of units as a full-time business, and because that phenomenon hasn't been stopped by regulators.
You can't build a $20B+ business on the back of individuals renting out spare rooms here or there for some extra money. You can build one by unlocking untapped value in the urban real estate market by converting long-term rental properties to short-term ones (whether that's illegal or has negative externalities is another matter).
I'm told architects have a saying: "form follows funding", and that now seems depressingly true. During my years in the industry I think things have steadily bent toward revenue at all costs, damn the mission, damn the government, and damn any sense of integrity. Zenefits is Exhibit A for me, but I hear story after story of companies building themselves to flip and doing shady things to maximize the next quarter's numbers.
I wouldn't mind this so much were our self image purely about cash extraction, as in the financial industry. But once I think it was more about impact, and I fear we are telling ourselves that story more than the current reality justifies.
Some Wall Street money is proprietary, sure. But a pretty good chunk of it is our 401ks and institutional pensions.
I would say, rather, "depressingly".
I think the "arms length" chasing of return by pension and 401k funds (whether active or index funds) is a problem. Our money goes places and does things in pursuit of returns that we would never consent to if we had to knowingly make the decision.
Out of which concerns have come socially responsible investing, triple bottom line and slow money.
The reason I think it used to be different and could be again is that venture funding is in theory about creating very long term value. You don't get a company like Amazon or Google or Apple by focusing on the next week or the next quarter, as is typical in the zero-sum-oriented financial industry. You get it by focusing on the next decade, the next century. You get it by finding ways to create massive long-term value for everybody, and then taking a modest slice.
The trouble I see is that the MBA religion of "up and to the right" leads people to make a lot of short term decisions. In the short term, short-termism does wonderfully well. I'm hoping that the current dose of unicorn fever is temporary. But in my case it's pure hope; I don't yet have a reason to believe it.
I think it's more a cultural shift away from libertarianism amongst a new generation of techies as the cause of the disconnect.
Read, for example, The Economist, which for 150 years has been advocating for free markets and against excess regulation. They've been doing it so long they prefer the phrase "classical liberal"; to them, "libertarian" is a johnny-come-lately term. Every time they advocate this stuff they do it not based on a tautological "markets are good because markets" argument. For them, markets are the best way to accomplish human ends: people that are better off, freer, more independent. But when markets work against that, they say so. For example, they're strong supporters of a carbon tax, because they see that as the least intrusive way to prevent further degradation on the atmosphere.
Markets are tools, just like computers are. They can be used well or used poorly, for good or for bad. In my view you have mistaken a mechanism for the purpose. When we decide how to structure society, it cannot be to serve the individual aesthetic or ideological views of a narrow group. It has to be to best serve its members. Nothing else is sustainable.
I don't think it's worthwhile to "decide how to structure society". Society should be emergent from individual freedom. Central planning can only cover the needs/ideologies of those doing the planning (and probably not even that).
Admittedly my views are radically post-modern and include a healthy dose of moral relativism i.e. there is no "best" way to serve society's members, just progress and the by-product of that progress.
Also, you have already decided how you want society to be structured, which is devotion to a very particular definition of "individual freedom". (Other people have broader definitions of freedom that they are equally devoted to.)
I agree that there's no intrinsically "best" way to do things, but that doesn't mean we can't jointly converge on a shared understanding of "best". Indeed, I think it means we must work very hard to do so. Since God is dead, we must take up the work we previously assigned to him.
I'd also suggest you haven't really paid much attention to where your kind of progress comes from. Free markets (which require a fair bit of regulation to maintain) are a decent way to optimize certain things. But they aren't really good at anything that has relatively long payoff times. Anything with a payoff time of more than 25 years or so should be ignored because its net present value is zero. Anything where the value is hard to capture is effectively worthless, and that includes things like society-wide vaccinations, moon landings, GPS, the Hubble telescope, and our many interplanetary probes.
Or take the Internet. It came purely out of tax funding. The commercial equivalents were evolutionary dead ends like Compuserve and AOL, centralized fiefdoms with low interoperability. The network technology that drives it wasn't invented by AT&T, who had no interest in things that reduced their central control. (For more see the excellent history When Wizards Stay Up Late.) If not for net neutrality regulation, many Internet companies wouldn't exist; monopoly or oligopoly network providers would have made it too hard or extracted too much monopoly rent.
Or consider basic science research. Einstein never had a market-driven job in his life, and it's a good thing, as his freedom from practical concerns let him do amazing work. Very few Nobel laureates had anything approaching commercial goals or commercial support. I'd call the detection of gravity waves major progress, but that work received massive tax funding. Etc, etc, etc.
It's also important to note that the vast majority of major progress (including your examples) have been tied to war, conflict and war-like situations (Cold War).
Human conflict will continue to be a driver of progress but we've reached a state where the agents engaged in that conflict need not be centralized in the form of a government.
Some of us would like to race toward that situation while others believe there's redeemable qualities in the status quo. Interesting times as that dichotomy will likely grow as individuals continue to be networked together without the limitations of geography or citizenship.
> I'm not sure we've ever seen a 100% free market so while regulation appears on the surface to have been helpful, it could be viewed as solving problems caused by other regulations.
The prosperity gospel types, for example use it to say that if something bad ever happens to anybody, it just means their faith wasn't sufficient. [1] Communists use it too; when I've asked why we would want to try communism when it has failed every time, they explain that it just wasn't "true" communism, that it would work if we'd use a more pure version of it.
This strikes me as ridiculous in two ways. One, it isn't falsifiable; nothing can ever prove it wrong. And two, advocating to run a country on a system that can't work except under the most perfect conditions is advocating for something that will never work in practice.
I also reject your thesis that war is necessary for progress. Einstein wasn't out there building bombs. Most Nobel winners are not engaged in war research. The Hubble does not have military applications, and neither do gravity waves. The CDC is not paid for out of the defense budget.
Your notion that the most effective way to get more progress is to have more war between non-state actors is, aside from being wrong, ridiculous as something to advocate for; exactly nobody will go along with it. I agree it's a reasonable consequence of unfettered pseudo-libertarianism, though. It's at least refreshing that you admit that; so many anti-government types have trouble admitting that by their lights Somalia is the freest place on earth.
[1] http://www.nytimes.com/2016/02/14/opinion/sunday/death-the-p...
Free markets bring the products based on these to the masses, and incremental improvements but the technologies behind them are often funded by military needs. Most research seems to be done in publicly funded research labs, while the development side of R&D is done in private companies.
Other great examples include things like the US Census and the National Weather Service. It's just enormously more efficient to pay for certain things centrally and make them available to everybody because that enables all sorts of useful business activity. Same for roads, policing, and courts.
As an entrepreneur, I like markets a lot. But as an engineer, I think of them as I would something like state machines or map-reduce or machine learning: amazingly useful in the right circumstances, but not always the right tool for the job.
There is no way it's worth that much. As we saw from the Square IPO ("valued" at $6B+ in their last round of private funding; current post-IPO market cap about half that), the valuations of the past few years are all wildly overstated, just as the pundits have said all along. AirBnB will never be worth that much in a public market.
Seriously? Do you know what a NIMBY is?
If you asked a dozen neighbors to all approve anything (even a differently coloured doorbell) then 100% chance that at least one would veto it.
NIMBYs opposing illegal hotels that exacerbate a housing shortage is a good thing.
(Short term rentals are also rentals.)
I've noticed that opposition to airbnb is highest in highly residential areas that are also appealing to tourists, partly because of the local culture. The left bank of Paris, various neighborhoods in New York and San Francisco, and the garden district and french quarter in New Orleans. What keeps these neighborhoods great is that the are still places where people are from. "Spare" bedrooms are actually occupied by non-rent generating children rather than revenue-generating boarders. Interesting people, long term residents, a community, exists. This is one reason why the french quarter in new orleans remains more interesting than the recreated french quarter in disneyland.
Airbnb profits massively by converting housing that used to go to people who live in the community into tourist housing. They sell much more than housing, they sell the interestingness of the neighborhood, and the destroy a little bit of each time they do.
Even the "spare room rental to make ends meet" model is a bit risky. This is the least objectionable aspect of airbnb, a local resident hosting people from other places, and making enough money to make ends meet. It's certainly the image airbnb likes to market. But even this does take long term housing off the market. I live in a 3br house in SF, and the two "spare" bedrooms are where my non-rent paying kids live. I don't think a family could be able to win a bidding war against someone who buys the house and factors in the rental income of putting the "spare" bedrooms on to airbnb year-round. SF is already down to under 14% families with children, and while airbnb is hardly the only factor, I think it makes thins worse, not better.
And that's the best scenario. The worst is entire units or houses completely taken off the market for long term residents, and clearly that is also happening on a very large scale.
Prop F lost in San Francisco, but a pretty large margin (about 55-45, which is a pretty solid win for airbnb), but keep in mind, spending was almost 20-1. If it takes a 20-1 funding ratio to win by 55-45, I actually like prop F's chances in anything approaching equal funding.
That equal funding contest may never happen, but there's still plenty of fight left here.
It's a shame that such a wonderful service (a family will be out for a couple of weeks on vacation, they rent their place out here and there) has become such an angry and divisive issue. These rental sites clearly have a good use within proper limits and regulations, maybe we'll get there eventually.
My previous apartment building (in a tourist area) was full of Airbnb guests partying on the weekends. They caused damage, got into fights with residents, and generally made it feel like living in a hotel.
Airbnb's investors all live in large houses with security and would never tolerate this kind of problem in their own lives.
Were the airbnb rentals legal ? If your mom owns her condo , she'd know that therefore be able to denounce the fraudster to the organisation that manages the building. There is plenty of things your mom can do to force an illegal airbnb rental to shut down.
And why would she complain to airbnb ? it's a well known fact that they don't get involved because it's their business model, all the risk is passed to the landlord and the renter.
You complain to the person who owns the unit, the condo / HOA board, the police and the municipality. Because those are the real people who have the ability to deal with something.
That said, I also think as a good neighbor, you could lobby your position to such a neighbor. The biggest problem with these cases is no one ever talks to each other.
To me that sounds kind of insane. I guess I just think that people should be allowed to do whatever they like in the privacy of their own bedroom, provided it doesn't harm others against their will.
I work at Airbnb, and I empathize with your feelings. I, too, agree that hosts who list an extreme number of properties, and especially those who rent out properties specifically for the purpose of running a listing, are hurting our community. They are definitely not in line with our mission.
Just the other month, several property managers were removed from the London market for doing just this: http://www.thememo.com/2016/02/16/airbnb-removes-hundreds-of...
The problem with a blanket policies across the entire site limiting all hosts is that we have so many different use-cases. Some hosts will create multiple listings; one for when they want to rent out their entire home, and others for individual rooms in their home. Sometimes want to rent out their summer home in the winter, and their winter home in the summer. It is a difficult problem, so it makes more sense to remove hosts on an individual basis; either those who provide bad experiences for guests, or those who do not make a positive contribution to the community.
Having neighbors be able to veto a listing sounds like a great idea, but how would you validate who the neighbors are? Especially in remote localities where internet access is limited?
> Officials of Airbnb and VRBO (Vacation Rentals by Owner, a HomeAway brand that is popular in New Orleans) point out that they operate in so many places they cannot possibly get into the specifics of local policy; they are merely private businesses offering services to consumers.
Operating in so many places has never stopped chain restaurants or chain stores from getting into the specifics of local policy.
I have no idea how they square this with the standard Silicon Valley notion that we can solve any problem with some technology and a little elbow grease. Every time an AirBnB spokesperson opens their mouth, I become more reluctant to use them despite previously being a happy early adopter.
This. "cannot possibly" should be read as "can't be bothered"
What do you do with interns? You're obviously not going to pay them enough to live in a hotel. They're obviously not going to sign 12-month leases.
It seems like there are people who legitimately need to live somewhere for several months at a reasonable price, and are neither tourists nor residents. Did the Prop F people just want all the tech companies to stop hiring interns, and all the universities to stop having visiting scholars, etc?
It's just a normal room, so renting an hotel room for 30 days should cost as much as the rent of an N room apartment shared with N people, but somehow costs can be 3-10 times more.
For instance, typical prices can be 300$ for renting a cheap shared apartment room for a month while the cheapest hotel rooms costs 50$, while they should instead cost 300/30 = 10$.
That's why people use AirBnB and share apartments with roommates for more long term stays, otherwise everyone would just live in hotel rooms, which would be far more efficient and reasonable.
I suspect the problem might be government regulation.
Do you see AirBnb lobbying to eliminate hotel taxes?
On the flip side you have Uber which is succeeding by working through the local policies. The apps themselves have functionality that's location specific (think Eats in NYC but not in NJ).
I do think Airbnb is using the local policies as an excuse and can do more to make themselves more acceptable to cities.
Good. Local legislation should be determined by local voters, not AirBnB.
Kidding, right?
http://observer.com/2014/07/hiding-in-plain-sight-what-airbn...
The anti-AirBnB side is absolutely better organized. Why else would AirBnB have to outspend them >10x to stop Prop F?
Perhaps its not about organization? Perhaps the anti-AirBnB side is simply in the right?
What you're describing is "astroturfing": https://en.wikipedia.org/wiki/Astroturfing
AirBnB provides no benefit to local voters and communities, except to the hosts putting the guests up. Possibly hotel tax revenue, which would've been realized regardless through traditional hotel bookings.
What about the fact the I just would never feel comfortable with strangers walking in and out of my condo building. And I'd imagine this would be case for communities with childeren, people wouldn't want random people from the internet walking around their houses. Thats why there are specific laws and regulations around where hotels can operate.
Would the proposition to the cities that could offer their citizens more more money ( is this proven?) by sacrificing quality of life?
But you certainly don't get to choose your neighbors. The US went down that path in the 50s: massive and hugely oppressive racial segregation whose echoes are still being felt.
You are not entitled to decide who does and doesn't walk near your property, only on your property.
I don't feel comfortable sharing a country with Trump supporters, but that doesn't mean I get to prevent them from finding housing.
If you live in a plain old apartment building, your landlord can rent neighboring units to whomever he wants.
... As long as he complies with existing federal, state and local laws, as well as existing HOA regulations, you as a neighbor don't have any property rights preventing a rental.
Apartments seems to be a great way for AirBnB and hosts to make buckets of money but then they are creating de facto hotels.
Zoning is still essentially segregation. (Eg keeping the multi-family homes for `poor' people away from the single family houses.)
For instance, the article has a picture of trash piled up on the sidewalk in front of an AirBnB. Surely there are existing laws or regulations against this. People often mention noise from short-term rentals, there are regulations against this too. The benefits of better enforcement would extend beyond short-term rentals as well, and improve quality of life for all residents.
Other issues, like the "vomit covered floors", seem like strictly private issues to be handled between the host, guest, and possibly the mediation of the rental site.
I'm not saying that better enforcement should be the only solution (it can't deal with larger issues like elevated property prices), but it should certainly be a large part of it.
The heart of the advice is to start solving problems that are hard to solve, and worry about scalability and efficiency after you've proven there is a demand. Often you will find creative ways to gain efficiency, build the infrastructure, and then have a wonderful competitive moat for the business. The big exception is customer service, there is no replacing being able to talk to a helpful person within 60 seconds of encountering a problem, but it's much more expensive to parallelize people then software.
In the case of legislation, getting on offense and working with a few cities will go a long way for establishing a precedent that other cities will follow. Uber was rather effective in this area.
Startups take off because the founders make them take off. There may be a handful that just grew by themselves, but usually it takes some sort of push to get them going.
The most common unscalable thing founders have to do at the start is to recruit users manually.
For as long as they could (which turned out to be surprisingly long), Wufoo sent each new user a hand-written thank you note.
[Meraki] got started by doing something that really doesn't scale: assembling their routers themselves.
When you only have a small number of users, you can sometimes get away with doing by hand things that you plan to automate later.