Monday, August 1, 2016

Senator Warren's petition against Airbnb

Just the latest in a long line of examples of how they for-profit companies appropriate and abuse the so-called sharing economy by stacking the deck and ignoring housing laws. The following is from Senator Warren with a petition to investigate the problem.

Stand with Sen. Warren: Investigate Airbnb-style rentals
Petition to Federal Trade Commission Chairwoman Edith Ramirez:
"Investigate the extent to which the short-term rental market on services like Airbnb consists of people running businesses by renting multiple residences simultaneously, potentially exacerbating housing shortages and driving up rents."

There is a rental housing crisis in America. Millions more people look for apartments each year, even as the housing supply decreases. More-and-more Americans devote nearly half their income to paying rent. Americans struggle as their rent goes up and their wages don’t – and low-income Americans suffer the worst.1

One part of the problem may be speculators buying up housing units and putting them on short-term rental platforms, like Airbnb. These platforms were intended to let people rent out single rooms or their own houses. But some hosts offer multiple units of entire apartment buildings, in essence running their own hotels and leaving long-term renters with fewer – and more expensive – options.2

The biggest obstacle to dealing with it is we don’t know how widespread the problem is, and we can’t count on the companies themselves to be honest.3,4 That’s why Sen. Elizabeth Warren is teaming up with Sens. Brian Schatz and Dianne Feinstein to demand that the Federal Trade Commission (FTC) investigate and uncover the truth about speculators on short-term rental markets.

The idea behind platforms like Airbnb – and similar sites like HomeAway, VRBO, and FlipKey – is for people to rent out a room, or their own house, and earn a few extra bucks. There’s nothing wrong with that. The problem arises when individuals or companies start renting out multiple units. Speculators may be buying up apartments, taking them off the market, and renting them out short-term, effectively running hotels that don’t meet state or local safety rules. There is also controversy over whether those landlords are then paying the required taxes. 

By reducing the housing supply, the people profiting off of short-term rental platforms may be driving up rents for everyone.5 And even if someone could afford to live long-term in an Airbnb apartment, there have been a flurry of reports of black users being denied rentals and an academic study that found that people with “black-sounding” names were less likely to be approved as guests.6

Airbnb was recently caught purging 1,000 properties from its platform in New York City in order to hide how many hosts were running businesses.7 So we can’t trust the companies themselves to come clean about how big a problem this really is. That’s why Sens. Warren, Schatz, and Feinstein have demanded that the FTC dig in and get the facts – and why we need to stand with them.

If short-term rental platforms are limiting the supply of rental units and driving up prices, then policymakers in Congress and local government will need to do something about it. But right now, the best data we have is from New York City, where a study found that only 6 percent of the hosts generated 37 percent of the revenue, and 72 percent of units were in violation of local laws.8 If those numbers hold true across the country, that’s a big issue.

The first step to fixing the problem is understanding the problem. That’s why we need to stand with Sen. Warren and tell the FTC to investigate the short-term rental market. Click here to sign the petition:

Thank you for speaking out.
Murshed Zaheed, Political Director
CREDO Action from Working Assets

  1. Patrick Cisson, “Why the Rent is Too Damn High: The Affordable Housing Crisis,” Curbed, May 19, 2016.
  2. David McCabe, “Warren joins call for Airbnb probe,” The Hill, July 13, 2016 and Ariel Stulberg, “Airbnb’s multi-unit hosts and “commercial listings” account for growing share of NYC business,”, July 11, 2016.
  3. Sens. Warren, Schatz, and Feinstein, “Letter to the Federal Trade Commission regarding short-term rental platforms,” Shatz.Senate.Gov, July 13, 2016.
  4. Jana Kasperkevic, “Airbnb purged more than 1,000 New York listings to rig survey – report,” The Guardian, February 10, 2016.
  5. Sens. Warren, Schatz, and Feinstein, “Letter to the Federal Trade Commission regarding short-term rental platforms.”
  6. Shelby Carpenter, “Airbnb Speaks Out On Fairness To Black Travelers, Details 90-Day Company-Wide Review,” Forbes, June 22, 2016.
  7. Kasperkevic, “Airbnb purged more than 1,000 New York listings to rig survey – report.”
  8. Sens. Warren, Schatz, and Feinstein, “Letter to the Federal Trade Commission regarding short-term rental platforms.”

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