AirBnB went wrong in this case because they don't have a good property owner support channel to remove bad properties like this.
To be honest, these people sound like shitty, lazy landlords who deserve their bad tenants. They
1 - didn't do a reference check;
2 - didn't swing by occasionally (even every couple months) to verify the condition of their property;
3 - were renting property out and hadn't bothered to provide neighbors their contact info in case of problems;
4 - quite possibly (this is highly variable / city by city) hadn't notified the city they were renting these units, or the city would have sent the fines to them rather than (presumably) to the tenants.
(I say this as a landlord). They feel they are entitled to take out a mortgage then collect checks without any work. It isn't that easy...
Isn't this a matter of public record? Tons of solutions for verifying identity exist and are used in other industries.
Furthermore, I didn't see any reason to jump to such conclusions given in the article. These people seem like professional swindlers so they could have presented false documents when signing the lease.
Property ownership is not trivial to check: not only does the registrar vary by location, with varying availabilities of information, but who is to say that person X asking airbnb to do / not do something is the X on the title? Further, lots of rental property is owned by a LLC/trust/corporation. Of course you can determine who is authorized to speak for the aforementioned LLC, but it's not an api request away.
These people sound like professional swindlers, you can buy someone's identity on the darknet for a couple hundred dollars at the most. They almost certainly filled out the rental application using someone else's information. That was implied in TFA.
Property ownership is very trivial to check. Calling city/town hall when a property is listed is not an unreasonable task for a multi-million dollar company, more like the bare minimum due diligence. If they can manage to send out professional photographers they can manage basic ownership verification.
[1] http://blog.airdna.co/2015-in-review-airbnb-data-for-the-usa...
(I say this a as a tenant). How is that any different than taking out a lease and then collecting checks without any work or risk?
And the tenants do have quite a bit of risk here: a fine of $20k is certainly worth pursuing through the courts. So also significant property damage. They seem to be banking (and to be fair, so far it's a good bet) on landlords being too lazy.