City’s regulations on Airbnb rentals are ‘punitive’ for ordinary people, says co-founder

The Airbnb app on display in Paris, France.

Chesnot | Getty Images

The Airbnb home-sharing platform is increasingly criticized by city authorities for trying to limit residential rentals through the online market.

Advocating in the company’s defense this week, Airbnb co-founder and CTO Nathan Blecharczyk told CNBC in Paris that this was largely the result of “misinformation” and was hurting ordinary people.

The varying local regulations, which often impose fines on users as well as Airbnb for breaking local rules on renting real estate, are “punitive” to ordinary people and affect the sources of income of many users, said Blecharczyk at the annual conference of the Organization for Economic Co-operation and Development (OECD). forum this week.

City regulators have cracked down on the rental service. In Berlin, landlords who rent more than half of their properties without permission from the city council face fines of up to $ 100,000. Dublin requires a building permit for users who wish to change the use of their property for short term rentals. The mayor of New York City signed a bill in 2016 that fined landlords who rent their properties for less than 30 days, while London requires a building permit for rentals longer than 90 days.

Local officials say the homes used for Airbnb rentals end up inflating real estate prices and negatively impacting the community, while company executives say it only raises prices “on margins “. Various metrics examining the platform’s impact on the market have produced conflicting results, but the increase in short-term rentals has taken thousands of homes off the market in individual cities and increased demand in already very busy areas. requested.

Appearance

Parisian laws prohibit landlords from renting more than 120 days a year, and the city is now suing Airbnb over allegations that 43,000 homes listed on the site are not registered with the government.

“It’s easy to come up with regulations that look reasonable on paper but in practice can be difficult and needlessly detrimental to the business. So sometimes we have to back down,” Blecharczyk said, adding that the business would rather engage in a feedback and discussion than immediately comply with the requirements. The company says it has partnerships with more than 400 jurisdictions and has paid more than half a billion dollars in tourist taxes to various governments.

Airbnb and the French authorities will face off in court on June 12. If Paris wins, it could remove up to 84% of the city’s Airbnb rentals from the website. The company paid $ 1.6 million in fines last year, according to deputy housing mayor Ian Brossat, who told local media that “Airbnb doesn’t follow the law” and “doesn’t made the slightest effort “to do so.

Airbnb responded by calling Paris laws “complex and confusing” and more suited to professional real estate players than to ordinary owners.

“Closed from an economic opportunity”

Airbnb founders (left to right): Nathan Blecharcyk, Brian Chesky and Joe Gebbia

Source: Airbnb

He called the policy “unnecessarily punitive for ordinary people who wish to share their homes responsibly” and, while admitting that illegal activity still takes place, called for “another way to address it”. This could include different models, described the CTO, which have been developed in other cities depending on the needs of those cities.

These tensions are emblematic of the larger debate over how to regulate the odd-job economy, an issue that public authorities have struggled with as new and popular service providers challenge traditional business paradigms.

As of March 2018, Airbnb had 150 million users and 640,000 hosts in more than 191 countries. The average amount a host earns each year by renting their space on the platform is $ 7,350, according to TechCrunch.com, and the company takes a 3% discount.

Correction: This story has been updated to reflect the fact that Dublin requires a building permit for users who wish to change the use of their property for short term rentals and also that Amsterdam limits accommodation to 60 days . It has also been updated to indicate that Airbnb claims to have partnerships with over 400 jurisdictions.

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