Krueger Statement on Use of Airbnb for Floating Brothels | Hacker News Reader

Krueger Statement on Use of Airbnb for Floating Brothels

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89 pointsparsley85 comments

We have some inconsistent intuitions about what the government should be allowed to regulate.

It seems like I should be able to give a neighbor's kid a 20 to pick up some leaves without getting the government involved. It seems like I should be able to give a friend a dollar for running and grabbing me a coke without consulting minimum wage laws or local sales taxes. I should be able to lend my cousin some money without registering as a bank.

A business hiring leafblowers or messengers with a "no questions asked" policy, or even an individual loan shark, seems like the law should get involved.

The internet as a communication platform blurs these lines. It lowers the barriers between strangers and acquaintances and friends. It lets private individuals behave like businesses some of the time. It lets small transactions rapidly scale.

I don't think one set of intuitions is necessarily right or wrong. But I think these conflicting intuitions make some people libertarians towards businesses like airbnb and uber, and other people think those businesses are just profiting off of skirting regulations.

The issue is not between AirBNB and its customers; its customers can evaluate the risks of renting on AirBNB, and factor that into their rental price, as well as insure for adverse outcomes.

The real issue is that AirBNB also imposes these risks on communities (i.e., AirBNB's customers' neighbors) by exposing them to, in the worst case, criminal elements, but even in a normal case, temporary renters who lack incentive to follow social norms or respect communal property.

This doesn't mean that AirBNB's business can't work, but it does mean that AirBNB needs to work with regulators to find a solution acceptable to the communities in which it operates. Such a solution would most likely be a combination of technical solutions to minimize bad outcomes and perhaps a tax on AirBNB, the proceeds of which could compensate communities for the externality imposed by AirBNB.

>AirBNB also imposes these risks on communities...

The person renting to AirBNB is the one imposing the risks. If communities are being put at risk it is by the willful actions of their own members.

>...AirBNB needs to work with regulators...

Why involve more parties than needed? How do communities currently deal with "bad apples?"

If we assume the community is functionally equipped to handle permanent residents who are undesirable, but not temporary ones, why not just apply the same rules to temporary residents? The permanent resident would bear responsibility for their guest(s). This would keep the solution in the same domain as the problem, the community.

Would you say that oil companies do not impose environmental externalities, but that the guilt solely falls on drivers who consume gasoline? No, the company bears some responsibility.

As to your second question, this is a public policy issue, and there will be a policy response whether AirBNB likes it or not. I think it would be smart for AirBNB to engage in the policy conversation.

Replace "AirBNB" with "a bulletin board" and try to make the same argument.

If there was a bulletin board that was primarily used for activities not permitted by local law, the board would likely be taken down. For example, if there is a bulletin board in a dorm that is used to advertise different drug delivery services in town, either the board will be taken down or a new requirement would be placed requiring all postings to be preapproved.

Craigslist is an Internet bulletin board that chose to remove a few categories due to pressure from law enforcement and the community.

ok who tried to down vote this guy? he made a really fair point.

9/10 times in ny or sf the sublets are illegal...

the laws are already there on How do communities currently deal with "bad apples?"

Doesn't mean its the "right answer", but ...

> This doesn't mean that AirBNB's business can't work, but it does mean that AirBNB needs to work with regulators to find a solution acceptable to the communities in which it operates.

I don't see there being a solution at all; hotels are zoned differently than residential for a reason.

The fact that AirBNB managed to popularize "breaking zoning laws ON THE WEB" doesn't mean that the zoning laws need to change.

I live in a downtown residential building one block away from a hotel, so that's not always the case. Of course, some communities may choose to prohibit AirBNB altogether.

I think the bigger issue is if the externalities imposed by normal usage are so high that, when properly internalized, AirBNB no longer presents a compelling value proposition in the majority of cases. This is certainly possible.

From AirBNB's perspective, perhaps they just fight the internalization as hard as possible. There are businesses with much costlier externalities, such as energy companies, that are actually subsidized and not taxed. In the AirBNB case, however, they may have a tougher fight as the harm, while lower in aggregate, is also less diffuse.

>I think the bigger issue is if the externalities imposed by normal usage are so high that, when properly internalized, AirBNB no longer presents a compelling value proposition in the majority of cases. This is certainly possible.

Sounds a lot like Bitcoin and some other tech stuff. Where the conceit is that is doesn't have all of the externalities, until it's realized that they are functional and useful.

Remember AirBnB is global. Even if we said where it is against the current law it should be stopped there are plenty of places without zoning rules or even say prohibitions due to the rules of the building.

It seems to me there are reasonable community reasons to have constraints and there are reasonable reasons to allow owners and travelers to benefit by coming to terms. It seems to me then there are reasonable reasons to figure out sensible guidelines - even where no rules (or practically none) are in place today. Then laws and regulations (and building rules) can be changed to adapt to these new opportunities and risks.

AirBnB (understandably) wants more latitude than I think they should be given. But I also think it is an opportunity for benefit to society and I don't think just saying there are risks we shouldn't adapt is a great idea.

Wouldn't that be the role of insurance? I don't see how bringing the government into this benefits anyone except maybe NIMBYs.

Do you think that the neighbors of an Airbnb renter who were constantly woken up by rowdy visitors would be able to benefit from insurance? The loss of quality of life is an intangible thing that's hard to prove or quantify. The recourse they currently have, of complaining to the landlord and getting the Airbnb renter evicted for violating the terms of their lease, is much more effective.

> we need to protect the limited housing stock we have from being arbitraged into other uses

This seems like a more compelling point than the title topic.

I think this is where the argument for short term whole-residence rentals breaks down.

In the beginning, Airbnb was for homeowners and renters to provide a spare bedroom to travelers. In that case, they're facilitating a private transaction between two individuals to exchange money for a place to crash. By the residents staying at the home for the duration of the guest's stay, it's hard to call that a sublet, and there's a very strong argument to be made that it's just a communications platform to link either side of a marketplace.

But the case of whole-home rentals gets murkier. I don't see how letting someone stay in your home while you're living somewhere else is anything but a sublet. And if it is a sublet, why should it not have to conform to the established rules for sublets?

I find it disappointing that the Airbnb team hasn't done much in the way of explaining this point. When they do address the legality of Airbnb, they almost always refer to the first case. It's understandable, as it's a much more easily defensible position. I'd be interested to hear someone from Airbnb directly address the possibility of their service being used to turn residential spaces into commercial spaces (in the form of hotels).

> By the residents staying at the home for the duration of the guest's stay, it's hard to call that a sublet

Its actually quite easy: you are renting out space in a unit you are renting from a landlord -- so its a sublet. That you are present is irrelevant to whether it is a sublet (it may, OTOH, be relevant to whether it is prohibited by law independent of lease conditions even aside from considering whether it is a sublet, but that's a different issue.)

Right. As soon as the "guests" are paying their "host" money, they're subtenants, not guests.

>This seems like a more compelling point than the title topic.

I agree. If a large number of residential spaces start getting occupied for AirBnB usage, that makes the housing stock that much shorter. And that would actually increase price of housing in the city. As another commenter posted, it was harmless when people were letting travelers stay the night in their currently occupied homes, as that didn't decrease the housing stock. But when people start using residential properties as fully functioning motels, that's when we see society adversely affected.

And this is a far more logical argument than the Brothrel one as not everyone agrees how bad that is.

Hmm. Why do we need that? AirBnB promotes better capital utilization. The only reason to be against that is if you're some sort of Commie at heart and think that the government should be in the job of trying to make your rental a way to transfer wealth from landlords to tenants.

Which is certainly a political opinion that some people endorse, of course, but when you do that it's generally a contributing factor towards a housing shortage, like you see in places such as New York and San Francisco... go figure :b

Postscript. I see I've been downmodded for identifying Communism as such. I blame the communists. There are a lot in San Francisco. :P

The "limited housing stock we have" makes it sound like they own the houses and apartments in question.

I guess property rights don't mean anything anymore.

So basically, she's admitting that the property is more valuable than its current use, and the city is actively denying itself tax revenue because of it.

Sometimes a short term gain in capital doesn't result in a long term social benefit. Of course people on vacation will spend more for a few days than a resident will for rent. But if that grows unchecked, the city will begin to lose its residents. Which additionally will result in a decline in income taxes, so it may even result in a decline in tax revene.

And if the city loses residents, then it can't support its tourism industry as well, and then it become less of an attractive tourist destination. This really seems like a self correcting problem.

Virtually all problems of civilization are "self-correcting" in one fashion or other.

But that doesn't mean that the residents of a city are obligated to just sit around until a problem, say gang violence or murder-for-hire, corrects itself. "Society" is about taking action to, uh, "proactively" correct these things.

That correction cycle could take decades, and some neighborhoods could be altered dramatically in the process. It really doesn't affect me at all either way, but I can acknowledge that some people have concerns, or at least a legitimate interest in managing probable outcomes.

It isn't necessarily the case. When individuals optimize their outcomes, they often make decisions that are not optimal from the whole group perspective. In such cases regulations are necessarily to achieve optimal global solution.

Some would say the purpose of government is to provide the services the voters voted for it to provide at as low a cost as reasonably possible - rather than to maximise tax revenue.

There are many things that would increase short term government revenue but which would be terrible public policy.

If the AirBnb rentals complied with hotel regulations you would have a point, but it's not an apples to apples comparison. Renters/owners like to take advantage of the fact that by not being in compliance with hotel laws they can undercut hotel prices and make an illegal profit. That's not the same as what the underlying property value is if you comply with regulations.

Investors in NYC given the choice of building hotels, office buildings, or residential properties are generally building residential properties. In fact a lot of the rezoning has been turning commercial space into residential space over the last 5-10 years. The market is clearly demanding residential space (specifically luxury units) first and foremost.

I think she's taking the position that there's inherent value in providing affordable residential property in New York which exceeds the value in extracting maximum tax revenue from every square inch of the city. At the very least, I find that to be a defensible position.

@moron4hire: It's a good point. But there are side effects of reducing residential property. What happens to the city's economy when everyone's commute is doubled because housing in the city is becoming prohibitively expensive as supply shrinks? Without zoning laws, how do you attract people to move to your city when there's no guarantee their apartment building will still be an apartment building once the lease is up?

To answer the question, I think it's the city government's job to balance the interests of people and businesses that reside in the city. In a perfect world, every side effect and externality would be neatly quantifiable, and municipal leadership would be fair and evenhanded. For now, we have to trust that the feedback loop of election will produce pretty good solutions to problems. I can't think of a better way to approach things in the current system.

Yeah, I get that, but it seems pretty tenuous. All this talk about the "value" of the property with regards to it being used for one thing over another, when price is the way in which we quantify value.

Who gets to decide what the value of a piece of property to The People should be? Should it be elected officials, who probably only represent the interests of the people on even numbered days, or should it be The People themselves, through price movement?

It's a common belief - especially on the internet - that whatever the unfettered free market decides (or would decide) is good and correct. You may believe this, and you may even take it as axiomatic, but you should be aware that very many people disagree, and will reject any argument with this as its foundation.

I forgot to clarify the opposing view. Some people see or foresee a negative outcome of an unfettered market, and want to take steps to prevent it. Then they pass laws or regulations, like hotel zoning. They see the improvement as justification for the burden placed on the market. There are so many of these baked into society that you probably don't notice them. Minimum wage laws, overtime laws, vehicle safety laws, workplace safety laws, noise ordinances, etc.

The runaway success of AirBnB has to largely be viewed as a reaction to the alarming trend of increased % of income spent on rent.

What used to be a standard of 25% has approached 45%+ in a very short amount of time in cities like NYC, San Fran, LA, and more. Wages have stagnated and tenants are doing everything they possibly can to afford to live in their city of choice. For politicians to go after AirBnB is to miss the underlying problem.

It could even be fueling the increased rent in a small way. With residential apartments occupied as hotels, there's fewer on the market. I've hosted on airbnb to defray the cost of my apartment; viewed from another angle, that's helping keep the market's costs up through my increased willingness to pay the prices.

This is a good point; it would be a shame (but not exactly a surprise) if society focused its regulatory policy on the symptom rather than the disease. One seems to hear a lot less about the evils of AirBnb from relatively-cheaper cities.

This is the NY Post'a article which the kreuger text references, it's in the headline article

but for those skimming the comments or who missed the hyperlink:

http://nypost.com/2014/04/14/hookers-using-airbnb-to-use-apa...

That article is .. not helpful. So baby swipes and 'at least ten condoms' is a proof of prostitution? That .. doesn't quite add up. I mean, you actually buy condoms in packs of 10-12 here and the baby swipe thing is inconclusive.

Maybe the claim in the headline is right, probably the story is backed by real facts. That article though? That's really useless.

"Says a 21-year-old call girl who works for the illicit business.[...]

“It’s more discreet and much cheaper than The Waldorf,”

--> Apparently, this is from an interview. But, YMMV.

Except that her guest was slashed with a knife by a client in her apartment; I think you missed that part.

Wait. Isn't this a problem with motels and other temporary housing situations as well? What makes Airbnb so special?

Because Airbnb is used to rent out rooms or houses that aren't in areas zoned for hotel/motel purposes. No one can reasonably expect that living in a motel room and living in an apartment are similar. The other tenants in the building of the Airbnb user can be reasonably expected not to have to deal with tourists being discourteous or annoying in their building.

I was expecting a story about airbnb getting to the waterborne rental market.

Deleted comment

This has actually happened, as reported here:

http://www.huffingtonpost.com/2014/04/14/prostitutes-renting...

From the press release:

"Prostitution wasn't really at the top of our minds when we passed the 2010 law helping NYC enforce against illegal short-term rentals, but in hindsight it seems kind of obvious."

You have to admit, I think the enterprising minds here at HN also failed to foresee this.

The retroactive obviousness of it does seem quite incredible. People get hotel rooms to do things they don't want to do at home. AirBnB is a hotel substitute.

I wonder if AirBnB internally had some risk assessment of this.

Or to quote Terry Pratchett in Going Postal:

> Everyone knew it happened. Actually, the new management probably didn't, but wouldn't have done anything about it if they'd found out, apart from carefully forgetting that they'd known.

https://news.ycombinator.com/item?id=2801400 is a great thread in many ways considering AirBnB's recent press.

I think "potential illegal uses" is a pretty common argument against short-term rentals, and prostitution isn't exactly a non-obvious one. It's just generally a bit easier on the neighbors than, for example, crazy parties or drug houses, which are both commonly-touted (and valid) arguments against short-term rentals.

TBH from the moment AirBnB was announced, with it's inital focus on couch surfing from strangers (and the lack of traditional 'quiet enjoyment' as a result) I expected a serious sexual assault to occur.

A prostitution ring is pretty low on the list of things that could go wrong.

You mean that people would use AirBNBs for the same things they use normal apartments for?!?!?!?

Most likely it's that most of HN doesn't care what consenting adults do on their own time.

"When have you most successfully hacked some (non-computer) system to your advantage?"

Weeeeeell…

Let's demand her resignation!

Clutch those purse strings! Clutch them tiiiiiiiight. Lest some ne'erdowell slip something like DRUGS into your bag. And then you might accidentally take them, and LORD KNOWS one dose is enough to make you so addicted to the marijuana shots that you will be shooting cops and blowing judges for your next hit.

So is every apartment. In buildings near where I lived in Dublin there were known brothels in rented residential apartments. Long before there was Airbnb, obviously.

This is a standard part of success: criminals hack the system. Much like AWS being used for bitcoin mining, and every cash-in-cash-out system being used for money laundering.

> Real estate is an extremely well-developed industry here in New York City Should read over-regulated industry

Hotels have so much to lose they won't let it happen and this is an opportunity to give them a bad publicity.

> (underlined) Today it's a prostitution ring, tomorrow it could be an illegal gambling ring, and maybe next week it could be a drug operation.

This is textbook 'slippery slope' fallacy. https://yourlogicalfallacyis.com/slippery-slope You said that if we allow A to happen, then Z will eventually happen too, therefore A should not happen.

A slippery slope is fallacious if there's no argument for the the progression down the slope. Lots of valid arguments take the form of a slippery slope.

In this case, there is in fact an escalating progression of bad things happening in Airbnb rentals; in rough order:

* Criminal enterprises buying entire buildings and turning them into unlawful hotels

* Renters trashing Airbnb rentals

* Floating brothels

The leap from here to "gambling" doesn't sound too crazy; in fact, gambling seems more innocuous than a floating brothel.

Yes, it's a good thing we've solved all the crimes with actual victims so we can move on to regulating behavior between consenting adults.

I'm guessing the neighbors of these short term rental properties didn't consent to Airbnb's customers rezoning their neighborhoods for them.

I'm guessing that since the person in the article was informed by the police and not her neighbors, that no one had any clue.

How does that conclusion make even the smallest bit of sense to you?

The point is that any inconvenience to neighbours from such a 'brothel' is hypothetical - nobody even noticed that it was there, so they definitely weren't harmed in any way.

There isn't anywhere near enough information to ascertain whether neighbors noticed.

I have no idea who my neighbors are. If they weren't actually here, in the building, I'd have no way to contact them whatsoever. That doesn't mean I don't notice Airbnb tenants.

Illegal gambling is hardly a problem anymore since there are so many legal places to gamble. I think she just picked a random item from her mental bucket of "things that sound scary and bad".

Slippery slope is not a logical fallacy. Like any argument, it might be right or it might be wrong, and if your entire argument is, "X and Y are in some way vaguely similar, so if we allow X, then Y," then your point is certainly under-argued. But it is, in fact, the case that in at least some circumstances, people change the status quo by taking a small step outside the status quo, normalizing it as the new status quo, and then taking another small step.

If you believe that AirBnB WILL be used for prostitution, but WILL NOT be used for gambling or a drug operation, you should articulate a reason why you think there is a difference in kind that would prevent people from using AirBnB for those other purposes.

Would this be an example for Tragedy Of The Commons?

A small group of users act rational and in self-interest (by offering prostitution, illegal gambling etc.) and therefore make it worse for the other 'legitimate' users. In the long run, the 'illegal' users destroy AirBnB (by causing stricter laws etc.) and therefore destroy their own business.

It is absolutely an informal fallacy[1]. The onus is on the person making the claim of similarity to demonstrate why that similarity is valid, so on its own it lacks any argumentative weight.

Something being an informal fallacy doesn't mean that it can't be a component of a good argument (ie. correlation not implying causation doesn't mean there are no cases where something can be demonstrated to be causitive), it means that it is not an argument in and of itself.

[1] http://en.wikipedia.org/wiki/Informal_fallacy

Perhaps something like "allowing same sex marriage today will lead to humans marrying animals tomorrow" is a fallacy.

This seems very well reasoned. I hope you're not implying that we can't make reasoned assumptions and take actions based off them.

Also there's actual law breaking going on here.

I love and use AirBnb but the lady has some great points.

That kind of progression really happened. "Perhaps allowing interracial marriage today will lead to men marrying other men tomorrow". Gay marriage was unthinkable a hundred years ago. The ideas that are acceptable to society change over time and we can't be so arrogant as to assume our current set of values is correct while all the previous ones were wrong and no future ones will make ours look wrong. You can already see attitudes towards drug use changing to the point where Krueger's "drug operations" seem harmless to many people today.

Agreed. But the laws of today have to apply to society as we know of today. I'm all for forward progress but we can't make laws for how our evolved selves.

In 10 years same opposing sex marriage might the same as opposing interracial marriage is today. But we're not there and the laws have to reflect what society as a whole is ready for.

Sad but true.

It is a logical fallacy, however, claiming that an argument is invalid due to logical fallacy, is also a fallacy.

There is enough evidence that shows that prostitution, drugs, and violent crime are inextricably linked.

Prostitutes are more likely to be victims of sexual assault, while being under the influence of drugs provided by their pimps, who may also use violence as a means to control the prostitutes, and as way to deal with Johns.

In addition to sex, drugs, and violence, prostitution has ties to human trafficking, child exploitation, and slavery, not to mention the health risks.

It can't get much worse than one's apartment being used as a brothel, there's really nowhere to slide to at that point.

If my neighbour chooses to work as a prostitute in their apartment, or rent their apartment to someone who happens to be a prostitute - that's not nearly the end of the world, you know, they're people too, just with a comparably hard/unpleasant profession.

An active neighbour can easily be bringing some stranger they picked up at a bar twice each night; if that stranger pays afterwards then that doesn't change anything for me.

In this case it's a prostitution ring, which isn't really the same as a long term neighbor who happens to sleep around a lot. I think someone who calls an apartment home rather then stopping there once and never coming back will be more respectful.

You seem to be saying stable prostitutes or brothels are OK even though they are also illegal in those buildings. I agree with the parent that a promiscuous person is effectively a prostitute with the distinction being only an arbitrary legal one. As you say though, the temporary nature of their stay is probably the real problem.

Slippery slope would imply that each thing was worse then the last, hence going down a slope.

In this case, all there are pretty equivalently bad, and the quote was just other similar ways the rooms could be exploited.

this only bears a very superficial resemblance to the slippery slope argument. We're not leaping from a dubious, frowned upon activity to an extreme hypothetical.

All of the aforementioned activities are (a) unambiguously illegal, and (b) within the same class of illegality, in that they are all based off social norms of morality and thrive on the same drives of moral ambiguity.

yourlogicalfallacyis.com is a good way to explain fallacies, but Fallacy Man is better: http://existentialcomics.com/comic/9

It's always painful to watch luddite bureaucrats pontificate on technology and how it needs to be controlled to "protect" the population. I remember when I was at Google in 2003 there was a California politician who demanded that Google be regulated like a utility company because it was so important. That was when it was still a private company! Or when another California bureaucrat wanted to ban gmail because it violated people's privacy by showing targeted ads next to emails. Listening to people like this requires a perma-facepalm.

I sympathize with your position, but I want to point out that it's equally foolish to assume that technological progress poses no dangers to society and that no control is necessary. It isn't really about controlling the technology either; it's about controlling how that technology is operated by human beings, people who are fallible and who can be dangerous when given a certain level of power.

There's definitely a continuum from "radical luddite" to "techno-utopian," and I think striking a balance between caution and optimism is the way to go.

"That was when it was still a private company!"

I don't see why there's any particular link between how widely distributed the ownership of a company is, and whether the infrastructure it is building holds potential for abuse and should be considered a matter of vital public interest. For the record, I think (with low confidence) that this is not true of Google and wasn't at the time, I just think this point is irrelevant.

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