Airbnb, the poster child of the sharing economy, is bearing the brunt of a media campaign launched by housing advocates, legislators and hoteliers. The ShareBetter coalition says Airbnb violates local illegal hotel laws and put down 3 million dollars on a marketing campaign to make sure that New Yorkers know.
But, Airbnb is not the only—nor the first—short-term rental company operating in New York City. Short-term rental companies, owned by larger travel tech sites like HomeAway and TripAdvisor, are in the same legal gray zone as Airbnb, but getting much less of the heat for it.
Like Airbnb, these companies have served as a conduit to New Yorkers opening their homes to travelers while leaving the risk of violating local laws to hosts and guests.
Among these businesses are Flipkey (acquired in 2008 by TripAdvisor) and HomeAway’s subsidiaries which include Vacationrentals.com and VRBO.com. Most of these companies popped up online at the same time, around 2008, at the beginning of the financial crisis when travelers were most in need of cheap traveling options.
Like Airbnb, these businesses have also taken a distant approach to local regulations.
“Any regulations on short-term rentals should be easy to locate, understand, and comply with as well as safeguard travelers, alleviate neighborhood concerns and allow the short-term rental marketplace to thrive,” said Philip Menardi, a spokesman for Travel Tech Association, a trade group for the travel technology industry that includes HomeAway, TripAdvisor and Airbnb.
But short-term rental companies don’t list these laws and regulations on their own sites. It took Airbnb two years of requests from local legislators to post a warning on their site about illegal hotel laws. Flipkey.com, Vacationrentals.com and VRBO.com don’t list a warning at all.
Part of the reason Airbnb has garnered so much attention is because of the popularity of its site; it currently has around 25,000 listings. And, in a costly city, Airbnb has marketed itself as a company that helps those in need. “Regular” New Yorkers list their homes on their site, according to Airbnb’s seemingly omnipresent 25 million dollar ad campaign.
“They certainly are outspending everyone by a mile,” said State Senator Liz Krueger, who championed the 2010 illegal hotel bill and is the most outspoken legislator on the issue. That law is ShareBetter’s ammunition against Airbnb and it stipulates that it is illegal to rent out your permanent residence for less than 30 days if the resident is not present during the rental period.
“They’re spending a fortune trying to convince everyone that what they’re doing is great and popular,” said Krueger.
Other short-term rental companies have far fewer listings and market their company to a different crowd. These travel tech companies consider their hosts to be entrepreneurs or “professional” homeowners who have transformed their (second) houses into a small business.
But it’s possible to list a property on any of these sites without much of a vetting process. It takes less than a half hour to put up your apartment on Flipkey.com, for example (I did), and I was never asked whether I owned my apartment, whether it was my primary residence or whether I was aware of local laws and regulations.
So, despite how any of these companies portray themselves, it’s difficult to monitor what kind of hosts use their service and whether they’re acting lawfully.
“We believe the vast majority of HomeAway’s customers own the place they rent to travelers, but we cannot ensure that is the case with over a million vacation rentals across our sites,” said Carl Sheperd, the CEO of HomeAway, Inc., whose subsidiaries in New York City offer just over 3,000 listings.
“They’re all pretty much the same. I just think that Airbnb probably has a bigger corner on the market here,” said Marti Weithman, the director of Goddard Community Center’s SRO Law Project, an organization dedicated to fighting illegal hotels in the city.
A lot of players have stakes in the fight over Airbnb and other lesser-known short-term rental companies: Housing advocates say that it reduces the housing stock and drives up prices; Some legislators tire of watching Airbnb flout New York’s illegal hotel laws; Hoteliers are threatened by Airbnb’s cozier and more affordable accommodations; and tourists and New Yorkers alike are looking to save a buck.
“They’re welcome in New York as long as they operate lawfully,” said Weitman.