The sordid saga of Airbnb -- a $10 billion "outlaw middleman" -- continues

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SF-based Airbnb is making news again this week, from the San Francisco Chronicle following up our stories about how landlords are sending eviction notices to tenants who are breaking their leases and local laws in using the short-term rental services to national outlets trumpeting Airbnb’s estimated $10 billion in valuation, which is more than some of the biggest hotel chains.

But nobody seems to be calling out how those two things are connected, except perhaps in ValleyWag’s passing but spot-on reference to the SF-based company as an “outlaw middleman.” That’s a good label for a scofflaw company that is making buckets of money by openly flouting tenant and tax laws in San Francisco, New York City, and other cities around the world.

Meanwhile, as the City Attorney’s Office continues preparing to take legal action against Airbnb, new companies are popping up to make it even easier for residents to illegally monetize their rent-controlled apartments, such as AirEnvy.com, which encourage people to “profit from your home or apartment by renting out unused space through a full service management marketplace.”

The company charges people 18 percent to manage their Airbnb rentals, checking guests in and out, cleaning up, and whatnot. And most of its testimonials are from San Franciscans, such as Rob, who writes, “I used to spend hours managing my Airbnb, exchanging keys with guests, and cleaning. Now, Airenvy does all that for me.”

Breaking local laws against short-term rentals has never been easier! All this infuriates Janan New of the San Francisco Apartment Association, who tells the Guardian that more than 1,100 rent-control apartments are listed on Airbnb at any time, and she’s been working with landlords to identify and evict such tenants.

Yet she denies that many landlords are using Airbnb to get around rent-control laws -- such short-term rentals are also usually illegal, even for owners -- and told us, “If people are breaking the law on our side, I want to know who it is.”

And as this highly lucrative clusterfuck continues, Board of Supervisors President David Chiu is still mired in his year-long efforts to create a legislative remedy for all of this. But Airbnb seems to be taking its local political problems seriously, this week hiring David Owen -- a well-connected former legislative aide to Chiu’s predecessor, Aaron Peskin -- away from Platinum Advisors to work on public policy for the company.

Stay tuned, folks, there’s lots more to come on an issue that the Guardian started covering years ago when few were paying attention to how an illegal business model was being used to create a multi-billion-dollar company.   

Comments

"that the Guardian started covering years ago when few were paying attention"

Perhaps Steven himself wasn't paying attention when he was illegally subletting his place using AirBNB in 2012.

Posted by Guest on Mar. 20, 2014 @ 5:18 pm

Excuse me, it was 2010. Anyways, Steven's actions were functionally equivalent to a landlord keeping a rental off the market to AirBNB it, in terms of their effects on SF's rental availability.

Posted by Guest on Mar. 20, 2014 @ 5:22 pm

Yes, and I learned a great deal during that experience, which I shared with Guardian readers (http://www.sfbg.com/2012/05/01/problem-sharing-economy) before the problem grew to its present proportions. It's tougher for those breaking the law to plead ignorance today because of the reporting that I've done, which is increasingly being added to by other journalists. And there's no excuse for Mayor Lee and others continuing to coddle this wealthy scofflaw company.  

Posted by steven on Mar. 21, 2014 @ 9:50 am

It is pathetic to try and blame this on Ed Lee. You are more responsible for this than him. So sad.

Posted by Richmondman on Mar. 21, 2014 @ 9:55 am

Really? I'd love to hear why you think so. I'm one of thousands of local hosts who have used Airbnb, and then I've done more journalism that anyone to expose this issue and push for some kind of negotiated solution. And Mayor Lee has done nothing but carry water for this company and Ron Conway when the job he was elected to do is to enforce city laws and help solve conflicts in the city. So, R, go away, explain why I'm a bigger problem than Mayor Lee. We're all listening. 

Posted by steven on Mar. 21, 2014 @ 10:07 am

problem here. But all anyone else sees is that some people like to rent out their home from time to time for short periods.

Posted by Guest on Mar. 21, 2014 @ 10:33 am

It is 2014, not 1960.Many people have had their lives enriched by AirBNB and similar services. Families have been able to travel together without spending thousands on hotels; cooking their own meals. Other people have been able to legally offset their mortgage and other household expenses, including city real estate tax.

So maybe we should take a look at the laws from the 1960s to see if they still serve our best interests and if they need amending. Which is exactly what city governments are doing, including New York, David Chiu and Ed Lee.

The reason that Steven WOULD be a bigger problem than Ed Lee? It would be better to have coherent arguments coming from the anti AirBNB side, not the constant stream of misinformation and false facts that we get from Steven.

The reason that I say "would be"? It is because only about 8 people ever see this stuff. Don't believe me? Go to Topsy.com and search Tweets for "The sordid saga of Airbnb"

You'll see that exactly 2 people (and perhaps 2 bots) mentioned this article, 3 if you include Joe Fitzgerald.

I literally laughed out loud when Steven wrote " It's tougher for those breaking the law to plead ignorance today because of the reporting that I've done".

Talk about delusional.

Posted by Guest on Mar. 21, 2014 @ 10:50 am

Only Steven could get himself into a lather because a few city residents have an overnight guest in their home.

Posted by Guest on Mar. 21, 2014 @ 11:00 am

The only problem with what Steven did is that (probably) it was against his lease and he could have been evicted.

There is no problem with people going short-term lets, whether through AirBnB or not, if they own the property or if they are tenants and their lease allows it.

Steven seems to want to go after the property owners who use AirBnB but they are the only ones using the service legally. It's the tenants who are breaking the law, or at least their leases.

Posted by Guest on Mar. 21, 2014 @ 10:08 am

like you did, and even then it's only illegal in those cases where your lease prohibits that, rather than it being some kind of crime.

Property owners are perfectly free to do short-term lets, and many of us do.

Posted by Guest on Mar. 21, 2014 @ 10:05 am

I don't know whether it's you or others who keep making this point, but you're simply wrong. Short-term rentals aren't legal in San Francisco, except in hotels.

Posted by steven on Mar. 21, 2014 @ 10:08 am

Show me chapter and verse of any reasonable and enforced law that bans me from having an overnight guest in my home.

Open challenge.

Posted by Guest on Mar. 21, 2014 @ 10:33 am

You charge your overnight guests money? What a jerk.

Posted by Guest on Mar. 24, 2014 @ 2:52 pm

No one said he does. But if he wanted to, there isn't anything the city could (or should) do about it.

Posted by Guest on Mar. 24, 2014 @ 3:06 pm

The topic is SHORT-TERM RENTALS, implying that there is an exchange of money (or other negotiable instruments of value) for the service provided.

Asking about bans on ANY overnight guests is a ridiculous strawman argument... unless of course it violates your rental agreement, and then obviously it would be prohibited.

And if it desires to do so, any municipality is perfectly within its right to enact regulations which prohibit this activity. Don't like it? Then you can a) work to change the law, b) move elsewhere, c) work within the law, or d) disregard the law. Simple as that.

Posted by Guest on Mar. 24, 2014 @ 3:37 pm

right to pass a law restricting what people can do in their own homes.

In the case of SF, that is moot because SF has not tried to pass any such law. Steven is 100% wrong about that.

But even if they did, it would be bounced by the courts.

Best case, the city can maybe tax the rents. Maybe, as no court has ruled on that either.

Posted by Guest on Mar. 24, 2014 @ 4:37 pm

Are you really trying to assert that municipalities (or counties, states, federal government, for that matter) have *no* right to pass a law concerning what happens in the so-called privacy of your own home? That's a shockingly naïve understanding of civil code.

I hope that you someday find the Libertarian paradise you're looking for. San Francisco certainly isn't it. Try Montana, maybe.

Posted by Guest on Mar. 25, 2014 @ 6:59 am

seeks to tell you who you can and cannot admit into your home will not pass constitutional muster.

And even if they could, how would they enforce it? Have a special residential police force that would spy on who you let through your front door?

Posted by Guest on Mar. 25, 2014 @ 7:17 am

> Have a special residential police force that would spy on who you let
> through your front door?

Hilarious.

Gee, I don't know, how about maybe complaints from your neighbors about people coming and going from your condo like it's an effing hotel, because you're running it like an effing hotel, in an area that's not zoned for effing hotels?

Posted by Guest on Mar. 25, 2014 @ 9:41 am

The neighbors don't care and I don'r care what they do.

It's called being good neighbors.

Posted by Guest on Mar. 25, 2014 @ 12:01 pm

enforced without a level of policing that would have ACLU screaming.

The city should butt out of what people do in their own home as long as nobody else is harmed.

Posted by Guest on Mar. 25, 2014 @ 12:14 pm

Whoopee for you and your neighbors.

I'm sick and tired of *my* "neighbors" renting their unit out to three different people in a week, and having to listen to the loud sex, music, and partying that's happening in a unit that they clearly haven't occupied in nearly four months.

Wanna trade?

Posted by Guest on Mar. 25, 2014 @ 1:22 pm

But when it happens, at least you know they won't be around long. Have a bad tenant next door in a rent control situation and you could suffer for decades

Posted by Guest on Mar. 25, 2014 @ 1:34 pm

A homeowner can have overnight guests in his home. And he can accept the offer of payment from them if that's the agreement.

Tenants can do neither. Most leases only allow a dozen or so Guest stays a year, and payment is not allowed.

Posted by Guest on Mar. 24, 2014 @ 3:41 pm

SF Adminisitrative Code Section 41A: Apartment Unit Conversion

It bans apartment rentals of less than 30 days

Posted by steven on Mar. 25, 2014 @ 11:03 am

An apartment conversion would be, say, converting a rental unit to a hotel room.

Posted by Guest on Mar. 25, 2014 @ 12:00 pm

Steven....curious if you can point me to any references on the illegality of short term rentals....we now live above one and it is really an uneasy feeling.

Posted by galinsf on Mar. 23, 2014 @ 8:32 pm

That tells us more about your paranoia than it does about anything else.

Airbnb guests are on average a lot more decent and honorable than the average tenant.

Posted by Guest on Mar. 25, 2014 @ 12:02 pm

Nice post. I learn something new and challenging on websites I
stumbleupon on a daily basis. It's always exciting to read articles from other writers and practice something
from their sites.

Posted by Game of War Fire Age Hack on Jun. 21, 2014 @ 4:40 pm

Well, Steven, how astute of you to begin your crusade against AirBNB after it had ceased being a useful source of funds for you - and to downplay the illegal activities undertaken by you and other tenants as you did so.

Posted by Guest on Mar. 21, 2014 @ 10:42 am

You write that "It's tougher for those breaking the law to plead ignorance today because of the reporting that I've done..." But in your article that you link to you concede that you knew you were (supposedly) breaking the law.

AirBNB might be a good way to shake up the rental housing market. Given that some tenants benefitting from rent control are now starting to break their leases using AirBNB, they'll get evicted and there will be some turnover.

Posted by Guest on Mar. 23, 2014 @ 6:38 pm

Steven, I don't think people should break the terms of their leases, and if they do, then they deserve to be evicted. That said, your own words in the article you link to make it quite clear you knew you were violating the terms of your lease by using Airbnb:

Here are your own words: "Frankly, I knew that my lease didn't allow subletters, but my building is big, I really needed the money, and I figured that I wouldn't get caught, a calculation that many thousands of customers of Airbnb and other companies regularly make as well."

You admit you knew what you were doing violated the terms of your lease, and you also state that many customers of Airbnb who use the service in violation of their lease terms also know this. So who exactly is "pleading ignorance?"

Also, taking the issue of tenants violating their leases aside, what local, state or federal law says that a property owner cannot lease their own property on a short-term basis? The only issue I am aware of is that San Francisco would like a hotel tax to be collected on such rentals, and even then David Chiu is crafting legislation to impose this tax, which implies that current law does not require it. Yes, of course, you have to pay income taxe on rental income, but with respect to the hotel tax, if the existing hotel tax law applied, there would be no reason for David Chiu or anyone else to propose new legislation for its collection on Airbnb rentals. SFBG once ran an article that Airbnb made a "small admission" that its rentals should be taxed like hotels, but the link was to an article about New York City, not San Francisco, and even that article only stated Airbnb would like to "help" New York out by having the tax collected, while citing the case of an individual who actually was fined for not paying the hotel tax and WON his appeal on the grounds the tax did not apply to such rentals.

So, again, if there are laws supposedly prohibiting this, then please cite them--meaning post a link to the text of hte laws and also provide your explanation as to why the cited laws apply, or ask a real estate or tax lawyer to guest post with you and explain the reasoning for why the laws you cite would apply.

I have never used Airbnb, nor do I have any desire to do so, but the SFBG's so-called "reporting" this issue seems to be more about editorializing and less about providing a factual analysis.

Posted by Chris Brown on Mar. 24, 2014 @ 10:50 pm

He won't because he can't. I've never used Air BnB either (and don't think I ever would) but simply can't understand Steven's irrational hatred of them.

Posted by Guest on Mar. 24, 2014 @ 11:14 pm

for no reason other than that he wants a law to prohibit that, assuming such a law would even be constitutional and not represent a taking.

And Steven's fabrications are only "rational" if you harbor an irrational hatred of a popular and successful mayor.

Posted by Guest on Mar. 25, 2014 @ 6:22 am

I cited the chapter and verse above, and I've referred to it repeatedly in my reporting, include here: http://www.sfbg.com/2013/08/06/thin-air

Just because you're unwilling to read and learn doesn't mean that I've been failing to provide the information to support what I've written. 

Posted by steven on Mar. 25, 2014 @ 11:06 am

homeowner occasionally have an overnight guest in his home.

Posted by Guest on Mar. 25, 2014 @ 12:03 pm

I read the whole article you linked to. You don't actually make a direct citation to any laws (and if I missed it, please cite the actual code section). You mention city and zoning laws, but you don't say which ones or which code sections.

You also make the statement that tax laws ban short-term rentals, which is not an accurate statement, as tax laws don't ban anything, they tax them. You then reference an opinion by the SF Tax Collector's office that Airbnb and individuals who rent out their apartments through it should pay the hotel occupany tax. While this does present the position of the Tax Collector's office, it is neither statutory or regulatory authority, nor a court ruling on the matter.

You then quote Jane Kim who gives her opinion that perhaps short-terms rentals under Airbnb would require a conditional use permit. Again, Jane Kim can have her opinion, but her opinion is not the law nor a ruling on what the law means.

Posted by Chris on Mar. 27, 2014 @ 12:10 am

ducks when asked to prove it definitively.

Posted by Greg on Mar. 29, 2014 @ 9:28 am

With havin so much content do you ever run into any issues of
plagorism or copyright infringement? My website has a lot of unique content I've either authored
myself or outsourced but it looks like a lot of it is popping it up all over the internet without my agreement.
Do you know any ways to help reduce content
from being ripped off? I'd really appreciate it.

Posted by Wifi cracker on Jul. 09, 2014 @ 9:11 am

begining this summer in SF !!!!
Yes!

Posted by Guest on Mar. 31, 2014 @ 5:35 pm
Posted by Guest on Mar. 31, 2014 @ 6:02 pm

This is great news. With a small fraction of the $10 billion they can buy the SFBG and fire everybody and then close down this Socialist rag. Great stuff!

Posted by Dani on Mar. 20, 2014 @ 5:33 pm

The last sentence is clearly misleading and polemic.

Posted by Dani on Mar. 20, 2014 @ 5:35 pm

>"Meanwhile, as the City Attorney’s Office continues preparing to take legal action against Airbnb"

No. Steven made this part up.

The Examiner article that he refers to makes it clear that any legal action would be against hosts abusing the system and not against AirBnb:

"Any lawsuits could be aimed at landlords who are abusing the system rather than at the companies providing the service, Gullickson said."

http://www.sfexaminer.com/sanfrancisco/sf-landlords-could-face-legal-fig...

Even the headline of the article makes it clear that it is the landlords who are being looked at. Steven would like it to be AirBnb, so that he is what he writes.

Steven T Jones never lets the truth get in the way of a good story.

Posted by Guest on Mar. 20, 2014 @ 6:41 pm

He certainly wouldn't want it to be the subletting tenants being looked at.

Posted by Guest on Mar. 20, 2014 @ 9:32 pm

is a tenant illegally subletting, they contact the LL and offer to evict.

So even if the LL doesn't know about it, he will.

Only owners can legally do short-term lets in SF, and many many do.

Posted by Guest on Mar. 21, 2014 @ 8:14 am

so has little effect on the 10 billion overall valuation.

And AirBnB's business model is not illegal at all. I've no idea where or how you came to that conclusion.

Posted by Guest on Mar. 21, 2014 @ 6:19 am

Yes, the SFBG, which has long depended on revenues from prostitution, will say that the AirBNB business model is illegal.

Just about anything can be used to break the law. Amazon, eBay, bicycles, razors.

If you batter someone with an electrical cord does that make the manufacturer a criminal?

Under Steven Jones the SFBG's credibility has become harder to find than the Malaysian jet. The SFBG has been around awhile; Progressives now need to find viable alternatives, sadly. This one ain't coming back.

Posted by Guest on Mar. 21, 2014 @ 8:03 am

competing businesses, because they have no Ed Lee connection.

So shallow. So dishonest.

Posted by Guest on Mar. 21, 2014 @ 8:10 am

> harder to find than the Malaysian jet.

Wow. Insensitive much?

I'm sure you thought you were being clever, but that's not cool.

Posted by Guest on Mar. 24, 2014 @ 2:54 pm

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