Airbnb
Is Facing an Existential Expansion Problem
Tom Slee
July 11, 2016
Surprisingly, the
new Airbnb ad campaign exhorts you not to be a tourist: “Don’t go
to Paris, don’t tour Paris, and please don’t do Paris.” But
then the punchline: “Live in Paris…even if it’s just for a
night.” Airbnb executive Jonathan Mildenhall told Adweek that the
campaign reflects a growing “demand for experiences that are not
like the typical tourist experiences, that actually more reflect what
it’s like to live in local places.”
But how many
travelers can “live there” before Airbnb accepts that it has
become a vehicle for mass tourism, and that its users are tourists,
no more and no less? Like other parts of the tourist industry, Airbnb
has become a double-edged sword. Visitors get new experiences and
bring in money, but as their numbers grow, they erode the very
atmosphere in which they bask and threaten the livability of the city
for residents.
Two years ago, there
were 20,000 Airbnb listings in Paris. A year later the number had
climbed to 40,000 and a housing inspector told The Wall Street
Journal, “The center of our city is becoming deserted. More and
more, it’s just tourists.” Since then, yet another 20,000
listings have appeared, so it’s no surprise that the company with
the tagline “Belong Anywhere” has experienced a frosty welcome
from city governments around the world struggling to deal with this
explosion of tourist accommodations.
Airbnb continues to
present its business as low-impact, made up of everyday hosts
occasionally renting out their own home. A recent Airbnb report on
its business in Lisbon shows that “many listings on Airbnb in
Lisbon are local residents’ homes,” reassuring readers that “72
percent of hosts in Airbnb in Lisbon have only one listing.” But
this is being economical with the truth: My independently collected
data set shows that the 28% of hosts with more than one listing (who
can be considered “commercial” hosts) account for two-thirds of
the company’s business in Lisbon. And while Airbnb claims that “70
percent of Airbnb guests in Lisbon stay outside the typical tourist
hotspots,” my data shows that the majority of visits take place
inside the two central districts of Misericórdia and Santa Maria
Maior, an area of only about six square kilometers. With the number
of listings in this small city of half a million people growing from
5,500 in May 2015 to over 10,000 today, a significant impact is
inevitable. João Seixas, a geography professor at the New University
of Lisbon, and his colleagues are “very much concerned with what is
rapidly happening to the historical center of our beautiful city. Our
estimate is that in the last three years, around one-quarter or even
one-third of the housing stock has changed function, mainly toward
financial investments and short rentals.”
What is the endgame
for cities where Airbnb continues to expand? Some cities say they
don’t want to be “the next Venice,” turning into a theme park
for tourists, with locals pushed out. It’s not an unreasonable
concern. Kristen V. Brown of Fusion visited Reykjavik (yes, as a
tourist). It’s a small city, with a population of only 120,000
people and a flood of tourists. Drawing on data I supplied, Brown
wrote, “The city’s only apartment rental website,
leigulistinn.is, listed just nine apartments for rent in downtown
Reykjavik. There were 22 in the entire city….In Reykjavik there are
roughly 50,000 apartments; 2,551 of them, or 5 percent, are Airbnb
units.”
Even smaller
communities are experiencing problems of scale when it comes to
Airbnb. Joshua Tree is a tiny town of 7,000 people on the edge of the
Joshua Tree National Park in California. It has over 200 available
Airbnb rentals. Resident Christine Pfranger observes that “locals
are having difficulty finding homes to rent, and are being pushed out
of their homes to make way for more vacation rentals.” Another
resident adds, “Airbnb and vacation rentals are changing our
community….House prices are going up because people now buy houses
to rent out as vacation rentals, making it close to impossible for
people working in the area to buy a house.”
Airbnb professes to
be open to partnering with cities, but it has shown little interest
in these problems; the company forcefully opposes any measures that
would limit the scale of its business.
Airbnb’s rocky
relationship with its hometown of San Francisco recently took a turn
for the worse. In February 2015 a new rule required Airbnb hosts to
register with the city, but over a year later only about a fifth have
done so. Now the city is holding Airbnb responsible for its hosts and
will impose a fine on the company of $1,000 per day for each
unregistered listing that the city can discover. It’s a new level
of seriousness, following similar actions in New York state and
Chicago.
Airbnb’s response
is to take San Francisco to federal court, arguing that the city is
violating three laws. Section 230 of the 1996 Communications Decency
Act (CDA) provides that website owners are not responsible for (by
virtue of not being the publishers of) content provided by users on
their sites. It’s a law that protects bloggers, newspapers, and
social media sites like Craigslist, Yelp, and YouTube. The 1986
Stored Communications Act (SCA) says that governments must have a
specific subpoena before they are entitled to information about users
of a web service. And finally, Airbnb is claiming protection under
the First Amendment, arguing that the new rule is a “content-based
restriction.”
Airbnb presents its
business as a matter of speech. Much as it promotes the idea of
“living like a local” in the cities where it makes its money, the
company says it ultimately has no responsibility for what happens on
the ground, just like a website with comments.
If Airbnb is
successful, and some experts believe it has a good chance, the CDA
will free the company of responsibility for the impact of its
business, and the SCA will prevent cities from finding hosts, and
thus Airbnb, responsible. City governments throughout the U.S. would
be helpless to curb the number of Airbnb listings or the intensity of
the tourist business that they bring. It’s a potent mix of bad
incentives.
But all would not be
smooth sailing for Airbnb. The majority of its business is now in
Europe, where Berlin, Barcelona, and, to a lesser extent, Paris are
finding a new assertiveness in dealing with the explosion of vacation
rentals. Meanwhile, the mayors of 10 major markets around the globe
are starting a task force to construct a common response to the
problems that Airbnb brings. Such developments are timely. Without
them, authentic tourist experiences may be bought at the price of
those who matter most: actual residents.
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