In a letter to the Federal Trade Commission, lawmakers and community groups are asking the U.S. government to investigate how many Airbnb and HomeAway rentals are operating like hotels. They say it’s difficult to implement effective policy without concrete data on the impact these services have on cities.
Legislators across the U.S. are voicing concerns about the meteoric rise of San Francisco-based Airbnb and HomeAway, which is owned by Bellevue, Wash.’s Expedia Inc. They claim a widespread trend in which property owners convert long-term housing into short-term rentals (STRs) to make more money. Cities including Seattle are trying to target hosts who operate their rentals like hotels to return long-term housing stock to the market and ease the affordability crunch.
This is how the letter to the FTC describes the problem:
As city elected leaders and community-based organizations, we are grappling with the impact of STRs in our communities, a process which has been made more difficult by the lack of reliable, complete data from the industry.
To be effective, we need to know the extent to which STR companies are permitting, or even encouraging, individuals or firms that use their platforms to rent multiple and/or unhosted properties (hereafter referred to as ‘commercial operators’). Permitting or encouraging commercial operators would stand in stark contrast to the public image of home sharing presented by the industry.”
That jab at the public image these companies present likely refers to an ad campaign launched by Airbnb in September. A series of commercials aired in Seattle, Boston, and Washington D.C., depict real hosts who use Airbnb to earn extra cash, remain in their homes as cost of living rises, and meet new people.
“The vast majority of hosts in Seattle are sharing their permanent homes and many depend on this extra income to help make ends meet,” an Airbnb spokesperson said in response to the FTC letter. “In fact, last year over 350 people used the money they earned sharing their space in Seattle to avoid eviction or foreclosure. We are eager to work with lawmakers and regulators at any level of government who want to learn more about how home sharing helps the middle class address the issue of economic inequality.”
Seattle City Councilmember Kshama Sawant doesn’t buy it.
“If the Airbnb industry is just ordinary individuals renting out space in their house, then why is the industry spending a million dollars in completely misleading ads to keep the city from collecting the data?” she said in an interview this morning.
Airbnb says home sharing is its core business while commercial operators represent a small minority. Airbnb and HomeAway have released some data that supports that claim, but skeptics argue the reports are bias and selective. An investigation by FiveThirtyEight also claims STRs are having little impact on the rental market in the top 25 U.S. cities, but even Airbnb disputes the findings in that report.
According to data from Puget Sound Sage, a signatory of the letter to the FTC, two-thirds of all Airbnb listings in Seattle are for entire units and 36 percent are rented out by hosts with two or more listings, suggesting they’re commercially operated.
Obviously, the existing data on short-term rentals in Seattle and other cities is highly controversial. That’s the problem signatories of the letter are asking the FTC to solve. Seattle City Councilmembers Mike O’Brien, Lisa Herbold, Lorena Gonzales, Kshama Sawant, as well as lawmakers from Portland, the Bay Area, New York City, Denver, and other community leaders want the federal government to conduct an impartial study to determine the number of commercial STRs in operation.
Today’s letter echoes a call from Senators Elizabeth Warren, Brian Schatz, and Dianne Feinstein, asking the FTC to look into short-term rentals.
“It’s important to counter the misinformation by the commercial Airbnb industry executives who claim that the cities are going after and trying to regulate ordinary people who are trying to earn a decent income,” said Sawant. “That’s absolutely not true. We’re talking about the large, commercial, corporate renters who are very likely having an impact on the rent. So I think it’s just fair to get the data.”
We’ve also contacted HomeAway for comment.