Slum Lords, Tax Cheats, $10 Billion and Airbnb

logo- airbnbThe good old USA. Land of the free – and Airbnb, the leadership of which has decided to step it up and fight for the “regular people” who use the site, now worth a cool USD10 billion, to lease out their couches, spare rooms, apartments or indeed an entire property portfolio.

Airbnb has chosen to make its stand against the state of New York, which is claiming through the courts that most Airbnb listings flout the law.

This is nothing new for Airbnb, which has had plenty of problems over the years with various governments for two main reasons: 1) should the company or its users pay tax on the rentals? and 2) does their business model comply with local property law?

The answer of course varies from state to state, country to country.

But clearly Airbnb has had enough of these questions because, um, it’s not really a traditional accommodation business and therefore different rules apply.

“The government will accuse Airbnb hosts of being bad neighbors and bad citizens,” an emotional David Hantman, Airbnb’s global head of policy, wrote in an email to Valleywag.

“They’ll call us slumlords and tax cheats. They might even say we all faked the moon landing.

“Taking on an Attorney General who is determined to fight innovation and attack regular people isn’t easy and we won’t succeed without standing together.”

Right on man! Power to the people!

But who are the people in this case?

The state of New York believes many landlords who use Airbnb to rent out accommodation are not “regular people” – battlers renting out a spare room to make a few extra bucks to get by.

The New York Post reported that 64% of Airbnb’s 19,500-plus offerings for Jan. 31 covered an “entire apartment”.

This breaches a law that a “permanent resident” must be present to sublet an apartment for fewer than 30 days.

Research also showed “more than 200 of the offerings came from just five ‘hosts’, suggesting third parties were renting out pads on behalf of their owners”.

It’s a scenario the NY Attorney General wants to quash, subpoenaing Airbnb records to identify illegal users (no ruling on this yet).

Where it goes from there is easy to see – more legal pain for both sides.

No doubt Airbnb can surely afford the heavy cost involved.

It’s now valued at USD10 Billion following its latest capital raising of USD450-USD500 million.

That makes it a very big business that works outside the standard accommodation industry boundaries by harnessing what it calls the “sharing economy”.

Innovative?

Yes.

Legal?

Maybe not.

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One thought on “Slum Lords, Tax Cheats, $10 Billion and Airbnb”

  1. When we sought an “entire apartment” in NYC it took extensive hunting on AirBnB to find one that was suitable. In our experience, most AirBnb offers are for a room/rooms in an apartment with the owner resident. So our experience at least casts some doubt over the quoted New York Post report that 64% of AirBnb’s 19,500-plus offerings for Jan. 31 covered an “entire apartment”.

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