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Joe Gebbia, Nathan Blecharczyk and Brian Chesky, the
co-founders of Airbnb, are set to become enormously wealthy when the company
becomes listed. Photograph: Airbnb
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Ten cities ask EU for help to fight Airbnb expansion
Cities say short-term holiday lettings market is
contributing to soaring long-term rents
Jon Henley Europe correspondent
@jonhenley
Thu 20 Jun 2019 13.51 BST Last modified on Thu 20 Jun 2019
18.35 BST
Ten European cities have demanded more help from the EU in
their battle against Airbnb and other holiday rental websites, which they argue
are locking locals out of housing and changing the face of neighbourhoods.
In a joint letter, Amsterdam, Barcelona, Berlin, Bordeaux,
Brussels, Krakow, Munich, Paris, Valencia and Vienna said the “explosive
growth” of global short-stay lettings platforms must be on the agenda of the
next set of European commissioners.
In April the advocate general of the European court of
justice found in non-binding opinion that under EU law Airbnb should be
considered a digital information provider rather than a traditional real estate
agent.
That status, if confirmed by the court, would allow Airbnb
and similar platforms to operate freely across the bloc and, crucially, relieve
them of any responsibility to ensure that landlords comply with local rules
aimed at regulating holiday lets.
“European cities believe homes should be used first and
foremost for living in,” the cities said in a statement released by Amsterdam
city council. “Many suffer from a serious housing shortage. Where homes can be
rented out more lucratively to tourists, they vanish from the traditional
housing market.”
The cities said local authorities must be able to counter
the adverse effects of the boom in short-term holiday lets, such rising rents
for full-time residents and the continuing “touristification” of
neighbourhoods, by “introducing their own regulations depending on the local
situation”.
“We believe cities are best placed to understand their
residents’ needs,” they said. “They have always been allowed to regulate local
activity through urban planning and housing rules. The advocate general seems
to imply this will no longer be possible when it comes to internet giants.”
After several years of strong growth, Airbnb currently has
more than 18,000 listings in Amsterdam and Barcelona, 22,000 in Berlin and
nearly 60,000 in Paris. Data from the campaign group InsideAirbnb last year
suggested that more than half were whole apartments or houses, and that even in
cities where short-term lets were restricted by local authorities, up to 30%
were available for three or more months a year.
Many cities say the short-term holiday lettings boom is
contributing to soaring long-term rents, although speculation and poor social
housing provision are also factors. Last year Palma de Mallorca voted to ban
almost all listings after a 50% increase in tourist lets was followed by a 40%
rise in residential rents.
Many are now trying to take action: in Paris, landlords face
a fine if they fail to register with city hall before letting any property
short-term (although many do not), while Amsterdam has tried to cut its annual
limit for holiday lets to one month in 12, and last year Barcelona suspended
all new short-term rental permits.
But city authorities now fear that the EU’s attempts to
promote e-commerce and the “sharing economy” across the bloc are impeding their
efforts to ensure that neighbourhoods remain both affordable and liveable for
residents.
“The cities are not against this type of holiday rental,”
they said. “Tourism provides a city with income and jobs. They do think they
should be able to set rules.”
In particular, they are concerned about the implication in
the advocate general’s opinion that the platforms are not obliged to share
information about holiday lets that would make it much easier for cities to
ensure local regulations are observed.
“We need strong legal obligations for platforms to cooperate
with us in registration schemes and in supplying rental data for the properties
on their platforms,” they said, adding that where platforms claimed they were
willing to cooperate, “in practice they don’t, or only do so on a voluntary
basis.”
Airbnb said in April it welcomed the advocate general’s
opinion, which it said gave “a clear overview of what rules apply to
collaborative economy platforms and how these rules help create opportunities
for consumers”. It said it wanted to “continue working with everyone to put
locals at the heart of sustainable 21st-century travel”.
Ian Brossat, Paris’s deputy mayor in charge of housing, said
the situation had deteriorated to such an extent that “in the four central
arrondissements of Paris, a quarter of all properties are now no longer homes
but purely short-term rentals for tourists.”
Brossat said the city had put new rules in place and the
number of Airbnb rentals had stabilised, but “now Airbnb is turning to the
[European] commission and appealing to a law that is obviously extremely
favourable to its activities. Our local rules are effectively threatened by the
European commission.”
Digital multinationals could not be allowed to become “more
powerful than cities, more powerful than states,” Brossat told French radio.
“We need the European Union to be on the side of residents, not these big
companies.”
Airbnb – a potted history
Airbnb began in 2007 as a loose “community” of amateur hosts
offering spare rooms or temporarily vacant homes to travellers. It argues its
commercial activities in matching property owners with people seeking
accommodation online mean it is not a traditional lettings agency.
The company has had triple-digit growth in several European
cities since 2014, the year the continent became its biggest market with more
than half of total global stays. It now lists tens of thousands of addresses in
popular tourist destinations such as London, Paris, Rome, Amsterdam, Berlin,
Copenhagen and Madrid.
Campaigners and local authorities say say that since in many
cities more than half of Airbnb listings are whole homes rather than spare
rooms, many of them available for all or much of the year, the company is
robbing full-time residents of homes, driving up rents and contributing to
“overtourism”.
While some landlords are still private owners renting out a
spare room, a significant number are large-scale commercial operators, often
with multiple listings – and campaigners say Airbnb benefits unfairly from EU
efforts to stimulate the “sharing economy” that mean it can effectively ignore
local regulatory requirements.
How Airbnb took over the world
The world according
to Airbnb – a lucrative and seemingly limitless business opportunity.
Illustration: Observer Design
In just 11 years, it has grown from nothing to a $30bn firm.
But critics say Airbnb’s rise has come at a huge cost to urban life – and
cities across the planet are trying to find ways to rein it in.
by Harriet Sherwood
Sun 5 May 2019 09.00 BST
Rowan Hughes stayed in Airbnb accommodation on holidays for
several years before she decided to make some extra cash from her own home in
south-east London. When refurbishing the property, she created a room with an
en-suite bathroom and its own front door, listing it on the
accommodation-sharing platform at the start of this year.
Hughes, 37, considered getting a lodger, but using Airbnb
offered the flexibility to reclaim the room when her own friends and family
came to stay. So far, she has mainly attracted business travellers, who prefer
her homely atmosphere and £50-a-night charge to nearby chain hotels where
soulless rooms cost significantly more.
“I make it clear on
the listing that it’s a family home, so guests know what to expect,” she said.
“It’s still early days but it has been great. It brings in some extra cash for
holidays or things for the children, and it’s a competitive price for my
visitors. It works for everyone, and I don’t want to be greedy.”
Hughes is exactly the kind of host the founders of Airbnb
had in mind when they launched the business in 2008. Joe Gebbia and Brian
Chesky dreamed up the idea of a website that would allow people to rent out a
spare room for the odd night or two after they charged three guests $80 each to
sleep on airbeds in their San Francisco apartment when every hotel room in the
city was taken.
Eleven years on, Airbnb’s site lists more than six million
rooms, flats and houses in more than 81,000 cities across the globe. On
average, two million people rest their heads in an Airbnb property each night –
half a billion since 2008.
London, Paris and New York have the biggest number of
listings, but Airbnb accommodation is available in Mandalay, Ulaanbaatar and
Brazzaville.
Some residents in
areas with a big Airbnb presence claim the business is hollowing out
communities
Last year, Forbes estimated the business to be worth $31bn
(£23bn). In the coming months, Airbnb is expected to become a listed company,
with an initial public offering netting enormous wealth for Gebbia, Chesky and
co-founder Nathan Blecharczyk.
But Airbnb’s extraordinary success has not been welcomed
unreservedly. Some residents in areas with a big Airbnb presence claim the
business is hollowing out communities by forcing up rents and limiting
availability for people seeking long-term lets, and importing large numbers of
tourists who display scant interest in courtesy to their temporary neighbours.
Social media and websites such as airbnbhell.com abound with
stories from hosts, guests and neighbours of excessive noise, trashed homes,
wild parties, last-minute cancellations and scams. But they are matched by
positive experiences from satisfied travellers who have found affordable
alternatives to hotel rooms.
Many local authorities are implementing or exploring
regulation to mitigate the negative impact of short-term rentals.
In London – where more than 77,000 homes are listed on
Airbnb, a fourfold increase since 2015 – mayor Sadiq Khan last month called for
a registration scheme for people renting properties on a short-term basis.
Since 2015, a legal cap of 90 nights a year for short-term rentals in London
has been in place, but it has proved almost impossible to enforce.
Joe Gebbia, Nathan
Blecharczyk and Brian Chesky, the co-founders of Airbnb, are set to become
enormously wealthy when the company becomes listed.
City Hall acknowledged that the 2.2 million guests who
stayed in short-term rentals in the year to July 2018 generated £1.3bn for the
local economy, but said the time had come for a mandatory registration system
for hosts and zero tolerance for those trying to flout the 90-night limit.
James Murray, deputy mayor for housing, told the Observer:
“In principle, a good balance can be struck. Londoners can make a bit of extra
money by renting out their homes, and visitors can have more options for places
to stay. But that does have to be balanced against protecting long-term rented
housing in London and the impact on neighbours of people coming and going. In
some areas, the balance is not being struck.”
Airbnb – which backed the mayor’s call – takes measures to
enforce the 90-night cap with its hosts. Other accommodation platforms are less
compliant, the mayor’s office said.
An Airbnb spokesperson said the company wanted to be “a good
partner to the places in which our hosts live... We have already collaborated
and worked with over 500 governments to help hosts share their homes and follow
the rules.”
The spokesperson said “countless studies” had shown that
Airbnb had no significant impact on housing, adding: “We always welcome working
with local authorities and partners on how we can ensure hosting and home
sharing continues to grow responsibly and sustainably, and help spread the
benefits of tourism to local families, small businesses and their
communities.”.
Last week an adviser to the European Court of Justice said
the company – which is registered in Ireland – should be regarded as a digital
service provider rather than a real estate business. This could exempt it from
onerous regulation. Airbnb has spawned competitors though none has matched its
scale. Marriott International recently said it would become the first global
hotel chain to launch a home-rental business. Hilton and Hyatt are considering
similar moves.
Meanwhile, Airbnb is moving into the hotel business,
partnering a New York developer to turn commercial properties in the city into
a “new category of urban lodging”. The first venture will be to convert 10
floors of the Rockefeller Plaza in Manhattan into “high-end apartment-style
suites”.
At the other end of the spectrum, Fairbnb, a co-operative
“seeking to create a just alternative to existing home-sharing platforms”, will
launch in five European cities next month. The venture is committed to
sustainability, transparency and compliance with local and national
legislation. Its hosts will be permitted to advertise only their own homes, and
the co-op’s 15% commission fee will help local development projects.
Fairbnb is perhaps closer to Gebbia and Chesky’s original
vision for community-based tourism than the behemoth that Airbnb has become.
Although most Airbnb hosts in the UK – 76% – let out their own homes for extra
cash, the platform is increasingly used by business people who own or manage
multiple properties.
Housing activists and analysts say that some landlords have
shifted from offering long-term tenancies to more profitable short-term lets.
In some places, they say, properties are being turned into de facto hotels or
hostels, with locks on individual rooms, to maximise income.
In London, according to database Inside Airbnb, 11 hosts
have more than 100 properties listed on the site. Almost a quarter of London
hosts list five or more properties. Other big cities show similar trends.
Alex, 31, who has two central London properties on Airbnb,
hopes to expand. “I see this as the future. It’s not so attractive to let
properties now,” he said, citing the government’s increased taxation of
buy-to-let property. A lot of landlords have had to sell up, but those who’ve
managed to stay afloat have had to get creative. From the standpoint of making
a profit, Airbnb is a good thing.”
“70,000 homeless but thousands of apartments to rent”
On his way to work on the morning of 1 May, Axel Avin, 36,
was stopped in the Nostrand Avenue subway station in Brooklyn by a French
family trying to figure out which MetroCard to buy.
Three years ago, the tourists would have stuck out in that
part of the Bedford-Stuyvesant neighbourhood.
For years, the area has been home to predominantly
working-class families. Outside the subway station is a Taco Bell, Burger King
and a handful of mom-and-pop shops mixed with empty, graffitied storefronts.
But with Airbnb, it’s now common to see tourists milling
about, trying to make their way out of Brooklyn to the skyscrapers of
Manhattan.
“It’s like a neighbourhood that’s made up of older either
African-American families that have been here, or younger gentrifiers who are
white and in their 20s,” said Avin, who has lived in the area for 12 years.
“Then you see a European 50-year-old couple with their suitcase walking down
the street. It stands out.”
Despite hosting a massive Airbnb presence – New York is its
third largest market, with an estimated 50,000 listings in every corner – the
city has been a battleground for the company.
City and state politicians have made it legally complicated
to be an Airbnb host, attempting to prevent landlords and real estate agents
from putting apartments on Airbnb that could have gone to permanent residents.
State law prevents renting out apartments in most buildings for less than 30 days
unless the hosts live permanently in the same space.
Fears of using Airbnb for lucrative real estate schemes are
not misguided. The city filed a $21m lawsuit against a group of real estate
brokers who are accused of using Airbnb to rent out 130 apartments in the city.
The restrictions have been supported by housing campaigners, who see the
company as a factor in rising rents and gentrification.
“We have a massive homelessness crisis, we’re coming up on
70,000 homeless people in the city, and we have thousands of apartments listed
essentially as hotel rooms,” said Jonathan Westin, executive director of
housing rights group New York Communities for Change.
Airbnb is defending itself. A federal judge has temporarily
blocked a city statute that would have forced the company to disclose
information about its hosts, which would have made it easier to enforce
restrictions.
The company argues that New York politicians have been
influenced by the powerful hotel lobbyists, once putting up a list of New York
City Council members and how much money they take from “big hotels”. Any
restrictions, they argue, hurt middle-class New Yorkers who are trying to make
some money on the side and tourists who are looking for a cheaper place to
stay, all because of a few bad actors.
Ed, 27, who rents out a one-bedroom apartment through Airbnb
in the East Village, said being a host has helped him pay for school as he
works to get his bachelor’s degree. Ed declined to provide his last name for
fear of legal repercussions in light of New York’s Airbnb restrictions.
“It [Airbnb rental income] is putting me through school...
without having to work at restaurants and shit, which would have been so much
harder,” he said. “I grew up poor, I got up myself. It’s maintained myself, I’m
offering a service. I’m not a bad actor.” Lauren Aratani
“Unregulated Airbnb and short lets wreak havoc”
Few UK cities have encountered a rise in Airbnb
accommodation greater than that in Edinburgh. Scotland’s capital also houses
many of the country’s most popular tourist destinations, while its
international festival and fringe has become one of the world’s foremost
cultural and artistic landmarks.
According to Airbnb, of its three million or so global
listings 6,272, including 4,225 active rentals, are in Edinburgh. These have
begun to transform the character of a small city of just over 500,000 people.
The Airbnb phenomenon in Edinburgh has led to concerns about
the erosion of sustainable communities in the city. Louise Dickins is the owner
of Dickins Edinburgh which specialises in Airbnb and short-term lets. She is
sympathetic to concerns over the spectacular growth of such accommodation and
seeks to mitigate these as she can.
“I feel the Airbnb sector gets unfairly blamed for many ills
present long before this came about,” says Dickins. “Yet we don’t talk about
the ways in which the city has been improved, better restaurants, better retail
outlets as well as the increased employment opportunities.”
Luke Zach, from the US, spent several months in a flat in
Edinburgh’s Grassmarket while working in the Borders. “Staying in an apartment
definitely enhanced my experience of being in Scotland and living and working
here,” he said.
The journalist Mike Small is one of the founding members of
Citizen, a campaign group seeking to protect Edinburgh from the negative impact
of excessive tourism, gentrification, property development and the
privatisation of public space. Much of this change has taken place in the
shadow of the city’s festivals. The phrase he uses to describe the consequences
is “hollowed-out”.
“Many people have spoken of feeling marginalised and
culturally alienated by the encroachment of the festivals into their lives,” says
Small. “The incidence of unregulated Airbnb and short-term lets has come in the
wake of this and wreaked havoc in the Old Town. Old people are feeling isolated
as the practice of buying properties for the sole purpose of using them as
Airbnb accommodation has risen.
“What seems to be driving this is a lust for growth, this
being the only metric of value to Edinburgh city council. Each year a growth in
numbers is trumpeted as a success with few questions asked about its nature and
purpose.” Kevin McKenna
“Earn €3k a week via Airbnb or €200 renting to a local”
Shopping in Barcelona
– where tourists benefit from a wide choice of Airbnb flats to rent, but local
people face higher rents as a result.
Shopping in Barcelona – where tourists benefit from a wide
choice of Airbnb flats to rent, but local people face higher rents as a result.
Photograph: martin-dm/Getty Images
“I lived here for 10 years and before the rent just went up
a little with inflation,” says Maria, who lives in the popular Born district of
Barcelona. “Then the landlord suddenly raised it by 30% and changed the
contract from long-term to monthly. I’m a single mother with two small children
and now I have to sub-let a room in order to pay the rent.”
Maria, whose name has been changed to protect her anonymity,
is a victim of the so-called Airbnb effect that has seen rents in the city rise
by 30% while salaries have remained static.
“Platforms such as Airbnb led to rent rises,” says Janet
Sanz, the city councillor responsible for housing. “If you can earn €3,000 a
week by renting to tourists instead of €800 a month to a resident, clearly
there is a temptation to do so.”
Airbnb offers around 18,500 properties in Barcelona which
host some 1.5 million visitors a year. This is only one-fifth of the number in
hotels, but it’s having a profound impact on the housing sector.
The authorities launched a crackdown on unlicensed tourist
apartments in 2016 and claimed to have removed some 5,000 lettings from the internet.
But according to Jaime Palomera, spokesman for the Barcelona Tenants Union,
they haven’t disappeared.
“We think this has led to a boom in room rentals, which
isn’t regulated like renting entire apartments for which you need a licence,”
Palomera says. “But often the owner isn’t living there. Guests are sometimes
encouraged to tell anyone who comes to the door that they are friends or that
the owner is out. It’s nearly impossible for inspectors to prove that it’s an
illegal rental.
“Now we need to regulate room rentals but we have to be
cautious and limit the number of licences so that this clandestine hotel
business that is Airbnb doesn’t become an even worse cancer.”
Palomera sees Maria’s story as part of a trend. “Short-term
rentals have pushed up rents so we are now seeing something we haven’t seen in
30 years, where families are sub-letting because they can’t afford the rent and
in some cases are sub-letting to tourists. But we have to view this in the
context of real estate speculation that goes beyond the tourist industry.”
Airbnb claims its “community” of hosts brought more than
€1bn to the city in 2018 but the question remains as to just who is benefiting.
In spite of Airbnb’s claims that most of its hosts are renting out rooms to
make ends meet, last year the data research organisation DataHippo found that
one Airbnb “host” managed 204 apartments with a potential rental income of
€37,721 a day. The 10 biggest hosts managed 996 apartments between them.
And it’s not just tourists. Barcelona is one of the world’s
leading conference venues and during the World Mobile Conference in March rents
increased by as much as 500%, with apartments being rented for over €400 a day.
Whatever the authorities try to do to regulate the market,
as long as demand and profits remain this high, it doesn’t look as though the
game of cat and mouse between them and Airbnb is about to end. Stephen Burgen
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