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Comment by JohnTHaller | Hacker News Reader

Airbnb is well aware that many of their hosts are renting illegally. In NYC, it's illegal to do a rental without the host there for under 30 days unless you have the proper licensing. So nearly all 'whole apt' rentals on airbnb are illegal. Airbnb makes no effort to let hosts know the laws regarding this.

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> Airbnb is well aware that many of their hosts are renting illegally

Their entire business model, in fact, depends on it. Welcome to the "sharing economy", that is, the economy of ignoring the laws regarding what it is you're trying to do

> smsm42: You make it sound as "sharing economy" is inherently lawless idea, which it is not. Of course, in cities like NY and SF, where people with money can buy any regulation they want, eventually entrenched business interests would buy laws that impede any disruption to their business. But that's hardly a fault of somebody who tries to do something new.

Funny. I kind of like that there are laws on the books to prevent my neighbors from operating an unlicensed and uninsured (Airbnb doesn't insure the unit itself, building or grounds, just the personal possessions of the renter) hotel out of the building I call my home... and all the safety, fire, noise, and other risks that go along with it. Just because you personally don't like a law doesn't mean there aren't a majority of us out there that do.

The local government puts taxes on hotels to get money from visitors who don't have a vote. In some cases they put regulations on hotels that limit competition or make them more expensive to operate. Then they have regulations that limit the production of new housing, artificially raising the price by preventing the supply from growing. Then they have to implement rent control to control the damage caused by that, which horribly harms the market as well.

And then all anyone complains about is how their neighbor is doing something they don't like with their own home.

You are replying to the wrong comment. I accidentally upvoted you because I didn't realize you were quoting someone else.

I would like the laws that prevent my neighbor from buying a car better than mine, having a lawn greener than mine and complaining about my dog barking too loudly. It's nice that only thing that is required for any selfish wish to become a law is that there are a bunch of selfish people coming together. As long as you have 50%+1, you can do literally anything to those guys in 50%-1, they're in the minority, so vae victis.

I would like laws that keep my neighbor from constructing strawmen weaker than mine.

So gather some like-minded people and pass a law. Apparently that's all it takes. Once the law is passed, it's sacred and no moral man can ever object it, because its THE LAW.

This is a waste of my time, I'm sure, but you realize that from the very beginning, the US system of government was set up to avoid that scenario (among others), right? Checks & balances, division of congress, 3 branches of government, etc?

We do have all those wonderful things. However they do not exactly apply to city regulations in SF. Of course, most egregious abuses - like gun laws in DC and Chicago - eventually may get attention of the Supreme Court and even get shut down, but it is a long uphill battle even if the right being restricted is explicitly mentioned in the Constitution as one not to be infringed. But the powers of local authorities to regulate local commerce are unlikely to be challenged by either Congress or Supreme Court, so while all those things are nice and useful, I'm not sure how they would help in this particular case.

I used to rent my apartment exactly as they do on AirBNB, in NYC, about eight years ago. My landlord found out, told me it was a violation of lease, told me to stop. I stopped.

As a result, I never would have thought AirBnB was a very good idea. But here we are, it's worth $10bn. I guess we will find out - either change the laws, redefine the activity, or stop it. Will be interesting to watch. Sucks for those who were evicted over it. I guess I was lucky.

"sharing" - while still extracting value via a middleman...

Yeah, I absolutely hate the term as well. It should be called the peer to peer economy. At the end of the day, there is nothing new here. Ronald Coase's original ideas in the The Nature of the Firm still apply, but now technology supports a firm composed of a single individual.

You are correct that this is not only specific to AirBnB but the whole shared economy. However, things are not black and white and only time will tell how they will settle.

From the article:

"The law I'm using is that the city says there are hotels and there are apartments, and the two shall never meet,"

They have already met!

Clearly, the demand is huge due to the new realities: better technological infrastructure, disappearing middle class, high prices of real estate and high rents in urban areas, the desire to socialize.

The issues are just starting to surface and the laws will have to evolve and adapt.

EDIT, since I can't reply to the comment below:

"Demand is huge for what? For unlicensed short-term rentals that don't pay hotel taxes or follow regulations, thus saving money? This is not news. This is not a "new reality". In fact, it's why the regulations exist in the first place."

I agree with this but that's not among the new realities I was referring to.

Some of the new realities are:

- people have gotten poorer and don't mind the extra income; some needed it pretty desperately

- there is a trend of growing appreciation of urban areas which worsens the first problem

- people have learned to be willing to trust strangers due to the reputation/karma system

- the Internet has taught people to enjoy the social aspect: meeting interesting strangers

> Clearly, the demand is huge due to the new realities:

Demand is huge for what? For unlicensed short-term rentals that don't pay hotel taxes or follow regulations, thus saving money? This is not news. This is not a "new reality". In fact, it's why the regulations exist in the first place.

"the economy of ignoring the laws regarding what it is you're trying to do"

not unlike things like Napster..

You make it sound as "sharing economy" is inherently lawless idea, which it is not. Of course, in cities like NY and SF, where people with money can buy any regulation they want, eventually entrenched business interests would buy laws that impede any disruption to their business. But that's hardly a fault of somebody who tries to do something new.

You're being downvoted because your argument depends solely on the presumption that any regulation which you personally neither benefit from, are protected by, or otherwise confers advantage to you or removes advantage from your counterparty exists solely because of corruption. This is, to the rest of us, a childish and unproductive perspective.

It has nothing to do with me or my personal benefit. It does a lot with maintaining status quo and protecting existing entrenched interests against change - that, of course, benefits different people from those that are benefitting from status quo. You can call it corruption or you can call it the rule of law, but it's the fact that entrenched interests make local authorities pass laws that benefit them and exclude competition. Of course it is done under the guise of "safety", etc. You can downvote it as much as you like, yet it is the reality that regulation is commonly use to protect entrenched status quo, often at the expense of the consumers.

Check out e.g. this one: http://www.aei-ideas.org/2014/04/thanks-to-a-private-public-...

Is it really a cartel extracting rent from consumers by leveraging limited choice or is it just me seeking my personal benefit (do not let the fact that I have never used NY taxi in my life distract you)?

Laws are made to keep status quo. I'd say, break them.

EDIT2: I did not mean all laws. But law != morality. EDIT: Cool to know that this community downvotes due to disagreement. Or did this comment add nothing to conversation? I won't be commenting again.

Oh man, I thought it was so that my drinking water is clean, my roads are safe, and that I'm treated fairly when I purchase goods or services in my community.

Thanks for clearing that up for me.

EDIT: "Or did this comment add nothing to conversation? I won't be commenting again."

No. It did not add to the conversation. While I will agree that, at times, laws are lobbied for that attempt to maintain the status quo, the vast majority of laws are to keep society in an acceptable equilibrium (i.e. my rights end where your rights begin).

Those things are all status quo, do you want clean water or innovation? Because apparently in some people's realities you can't have both.

There is literally nothing innovative about AirBnB or Uber. It's just "The Hilton App" or "The Checkered Cabs App", except that they break hotel & taxi law respectively

No, there really isn't anything innovative about them. I doubt that will stop HN comments from crying "Won't someone think of the INNOVATION" when confronted with regulations to produce an impediment to something they want.

I would say their pricing models are much more dynamic, but that's because they're just middle men and aren't responsible for the supply side (except providing incentives to increase supply, not actually providing capital, management, etc).

Right but dynamic pricing is precisely why taxicabs are as regulated as they are. It costs you the same amount to get from the Airport downtown on a Friday night as it does Tuesday at midday. And you the tourist know how much it'll cost you when you get there, because the price is regulated.

> It costs you the same amount to get from the Airport downtown on a Friday night as it does Tuesday at midday.

Only in a world with unlimited supply. When demand peaks, you'll either have the price increased ("surge pricing") or people will have to go without when supply can't mean demand.

The apartment building I live in here in NYC forbids people from using airbnb and similar services. I'm glad because I don't want to worry about a flux of transients in my building. Some laws may be problematic to vc/startup folks but I'm glad they exist because they protect me.

I feel like the word transients is too often used to refer to homeless people. My impression is that AirBnB caters primarily to upper middle class vacationers. Are they really a problem? This is a serious question as I've never had to deal with this sort of problem.

http://www.huffingtonpost.com/2014/03/17/airbnb-orgy_n_49788...

Given any sufficiently large sample size...

The vast majority of NYC leases forbid subletting of any sort. Leasing or subletting to someone for under 30 days is illegal in NYC if you don't have the proper permits. There is a loophole in the law that makes it legal for you to rent out a room within your apartment for under 30 days while you are present in the apartment, though most leases forbid this as well.

did this comment add nothing to conversation?

Yup. It's a meaningless comment that doesn't back up its aggressive assertion or expand on the mental leap it makes.

- Can you prove that laws are made to keep status quo?

- Why does that alone mean we should break them?

That's great until you're living next to someone with the same ethos.

I'm about as anti-Law, anti-establishment, anti-authority pro-Snowden as they come... but ...we can't all just go around breaking whatever law without some kinda of "justification"(hopefully moral/ethics based)

Not only are they "well aware," they have likely gone much further and internally documented items that they need to actively avoid talking about, reviewed code/ordinances/statutes for each state, county and locality that could expose them to direct or secondary liability, etc.

"Well aware"... understatement.

I agree, Airbnb is a bad actor here, but by the same token so are the illegal landlords. I don't buy the framing that they are victims of Airbnb's willful attempt to keep them in the dark. They have just as much reason as Airbnb to know the law, just like Airbnb they decided to go into business for the purpose of making money and are responsible for doing so in a lawful manner.

The real victims here are the neighbors and in the case of subletters, the landlords. No one gets upset when the triggerman goes to jail, even if they also wish the Don would go too.

Well yeah, they've got a valuation to worry about. They are not going to let a little something like the law get in the way of that.

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