“If Airbnb didn’t exist, would my rent even be this high?”August 2, 2017
The following article, originally posted in The Guardian, proves a point we’ve long made about Airbnb.
We have no problem with hosts occasionally renting out a room in their home to make ends meet. Our concern is with commercial operators who exploit the system to dodge taxes and common sense safety rules. Illegal hotels destroy neighborhoods and exacerbate affordable housing crises in cities across the country. In fact, according to research, illegal hotel operators are driving a disproportionate share of Airbnb’s revenue — $700 million in the company’s top 13 markets last year alone.
Ruth Fowler is just one of many homeowners negatively impacted by the proliferation of Airbnb’s illegal hotels. This is her story:
The reluctant Airbnb host: why I rent my spare bedroom to pay my own rent
As rents soar in Los Angeles and elsewhere, the room-sharing service can be helpful – but it has also faced some of the blame for the housing crisis
By Ruth Fowler, The Guardian
I’ve never found scrubbing other people’s fecal matter from my toilet seat particularly fun, nor does sharing my shower appeal, and yet this is my daily routine.
I’m an Airbnb host. It’s not that I enjoy losing my spare bedroom and my privacy to entertain out of town visitors: I use the platform to be able to pay rent while I go through a difficult financial time. Ten nights a month, I have to tolerate a stranger using my bathroom to get 20 nights blissfully alone with my son.
We live in an impoverished area of Los Angeles close to a large convention center and a university. It is not a tourist hub by any means, so demand for my area is not high. The types of people who book my spare room tend to be business trip visitors, convention-goers, students and – saddest of all – Los Angeles residents who have found themselves unable to afford rent and must wander from cheap short-term rental to short-term rental until they’ve scratched together enough money to afford a security deposit.
In my year as a host, I’ve gagged while picking up nail clippings left by rich Korean students, and I’ve left bad reviews for tight-lipped teens who declared my toddler annoying. I have – once – told three girls from San Francisco who slammed doors from midnight until 4am to pack their bags and leave. But on the whole, these are petty inconveniences balanced out by my hunger for financial help.
Transient guests don’t have too much baggage, which is a blessing: my tiny two-bedroom guesthouse is already crammed with books and kids’ toys. I’ve had three guests out of maybe 50 who have ever engaged me in conversation beyond “how do you turn the shower on”, and while they were genuinely lovely people, they haven’t had any impact on my life.
Their money has, though. In a city where the median wage is $28,000 a year and the median rent for a one bedroom is now $2,000 a month, I may not have a home for me, my son and my pets without it.
If you think that most hosts fit my profile, you should think again. A sizeable chunk of Airbnb’s revenue has not come from the people featured in the company’s promotional videos: Inja and James, the sweet, charity-focused elderly couple, Vanessa, the African American widow from south LA, or the single mom on benefits struggling with an international divorce (me).
Instead, a big part of its revenue has historically been driven by commercial property owners and landlords with multiple properties who rent out everything from luxurious mansions to rent-fixed units intended for long-term residents.
Those sites are removed from the housing market to accommodate Airbnb clients, meaning that long-term, affordable housing options become more and more scarce.
The accusation that Airbnb has contributed to the affordable housing crisis is not new: it’s what has led New York to pursue a law which prohibits short-term rentals of fewer than 30 days at a time, unless the owner is present as a host. Airbnb spent $11mon a Super Pac to fight the regulations – but dropped a lawsuit when the city agreed to only prosecute hosts who violate the law, and not Airbnb itself. (In 2016, the company agreed to collaborate with the city and to crack down on individuals renting out multiple homes.)
Scott Shatford was the first person to be convicted in the city of Santa Monica for snapping up leases on singles and one-bedrooms in extremely desirable locations.
Shatford told me he would negotiate with the landlord and pay 10%-20% of the asking price to include a subletting clause in his lease (subletting is banned in every standard California leasing contract). Other times, he wouldn’t even bother bringing up the issue. He spent $5,000-$10,000 on furnishing each apartment, and then placed them on the Airbnb site. After about three months, he began to make money.
At the height of his rental empire, Shatford managed seven properties on Airbnb – none of which he owned, all of which had been intended for long-term residents. After he failed to respond to cease-and-desist letters from the city (he claims he did not receive them), he was finally convicted when the city itself rented four nights in one of his properties – and took him to court.
Shatford no longer rents out properties and has moved to Denver with his wife, Julia. He now runs a data analytics company, AirDNA, which scrapes data from Airbnb in order to provide investment information to those who wish to purchase or lease properties specifically for the short-term housing market.
Insideairbnb.com, a site run by Murray Cox and Tom Slee, also scrapes data from Airbnb. Their site rose to prominence after they discovered that Airbnb had wiped more than a thousand listings from their site just days before releasing data which they claimed supported their defense that their site was used primarily for home sharing, predominantly by ethnically diverse lower middle class and working class professionals (the Airbnb New York public policy lead, Josh Meltzer, later acknowledged the site had “removed approximately 1,500 listings from our platform in New York City that were controlled by commercial operators and did not reflect Airbnb’s vision for our community”. )
Cox and Slee have used their data to argue that Airbnb has had a significant impact on the housing crisis, has exacerbated gentrification, and yet has used home sharers as a visible front for their organizing and for their mission to expand.
When I reached out to the Airbnb spokesperson Connie Llanos, a former press officer for the Los Angeles mayor, Eric Garcetti, for comment about the company’s role in the availability of long-term housing, Llanos said she didn’t see Airbnb as a significant contributor to this problem, stating: “We have no tolerance for individuals who abuse our platform – we will take action against them.”
As for Scott Shatford, he doesn’t see regulation concerning multiple units as enforceable, by either Airbnb or the various governments and cities trying to regulate abuses. He points to the fact that despite his conviction and his fine of $3,500, the city actually lost money by having to book one of his listings themselves in order to catch him.
Whether he’s right remains to be seen – property owners illegally listing multiple properties have started to face legal consequences. In June 2016, the city attorney filed a suit which listed a number of Venice Beach properties, most of them rent-fixed, allegedly being used as illegal Airbnb short term rentals after evicting long term tenants.
As for me? I continue to rent my spare bedroom. I have never had a guest pay more than $45 a night, and Airbnb’s “smart pricing” system regularly suggests I set my price at $26 a night, meaning a week’s rent would cost a guest $182 – well below half my rent, and not even beginning to touch upon utilities.
This is, of course, purely optional. No one forces you to set your prices, but that ever-present “suggestion” niggles me. It’s an indicator that in a city where the housing crisis is evident on every corner, I, the home-sharer, am the one picking up the price for the low-budget tourist.
What is clear is that something needs to happen. Airbnb is not solely responsible for the short term-housing crisis, but it is a factor. Rents are continuing to rise. Demand for cheap, tourism-driven getaways is insatiable. At the back of my mind is the question: if Airbnb didn’t exist, would my rent even be this high?
affordable housing, Airbnb, California, Los Angeles