San Francisco, the very epicenter of loud ideological battles over the future of housing, had its own idea about how to regulate Airbnb: the city passed an ordinance saying that the company itself could be fined for every user who rented out their apartment without being registered with the city. This tactic of making Airbnb itself liable for the massive black market of short term housing it creates was apparently very effective! So effective, in fact, that the company wasted no time in suing the city over the ordinance. (The company’s argument is that “It is a content-based restriction on advertising rental listings, which is speech.” Which kind of sounds like bullshit! Though I am not a lawyer.)
Other cities have had success in taxing Airbnb rentals in more or less the same way they tax hotels—something that the company has said it is willing to do, based, no doubt, on the political calculation that collecting taxes from users in exchange for the freedom to operate is vastly preferable to being fined for all of its non-compliant users.
Airbnb knows that its long-term future depends on reaching a stable arrangement with local governments. Collecting taxes is really no sweat for Airbnb, considering the company’s fantastically profitable business model. It is valued, for example, at significantly more than the Hilton Hotel company, without needing to own, staff, or operate any hotels. But the hotel industry is actually the least of Airbnb’s worries; more significant are cities themselves (and their angry residents), particularly those in which affordable housing is a constant near-crisis. In New York City, a new report says, Airbnb listings “took about 10% of the city’s available rentals off of the market.” That is quite clearly an unsustainable situation in a city that lacks enough affordable housing for its full-time residents. And collecting 8% taxes will not solve that problem.
Airbnb needs to be taxed and regulated. Airbnb needs to be collecting taxes and ensuring that its users are only renting out apartments that are allowed to be rented out. It’s absurd and insulting for a $30 billion company in such an enviable business position to act as if it can do nothing to see to it that its users are not undermining the very stability of municipal housing in cities around the world. Airbnb gets paid for all those listings; if the listings are illegal, so is their business model. Enabling regular people to make some extra income from their apartments is a good and useful thing. Enabling landlords to turn vast swaths of neighborhoods into off-the-books hotels is not. Airbnb doesn’t necessarily have to be the enemy to housing advocates. Their tax revenue can pay for a lot of housing. And, whether you like it or not, their business model is here to stay. They just have to stop acting like they don’t operate according to the rules of planet Earth.