A Question of Legality

Face it, Airbnb and Airbnb hosts have had quite the drenching in accusations of “conducting business illegally.”  People in cities around the world are upset with the spunky corporation, which has grown in size and power quite dramatically, and which began as an illegal arrangement by 3 young guys of the Millennial Generation, to try to make some income renting out a couch to those coming to their city for an event.

couch sharing --- the early Airbnbing
couch sharing — the early Airbnbing

Short term rentals in San Francisco were quite illegal when Brian Chesky, Joe Gebbia  and Nathan Blecharczyk began Airbnb in 2008.  In fact, Short term rentals not only remained illegal in San Francisco for 7 years after the founding of Airbnb, until February 2015,  but were actually a criminal matter in many cases — it was a misdemeanor to do short term rentals in some situations.  Short term rentals were illegal in San Francisco, all throughout the time that hosts in San Francisco set up thousands of listings on Airbnb — currently over 7000 listings — until the city passed a law in Feb 2015 which legalized short term rentals in a person’s primary residence.

San Francisco Short term rental law

So, in effect, thousands of people were doing short term rentals on Airbnb for many years,  during which time this was all illegal!!  Now multiply those thousands of people and their listings by many hundreds of cities across the nation, which had similar prohibitions on short term rentals, and what do you have?

Some would say, you most definitely have a scofflaw company, and thousands upon thousands of scofflaw hosts and homeowners.

Others would say, you have a political and social movement, and a compelling phenonmenon.

you have a movement
you have a movement

Your take on this,  depends, of course, on your ability to view laws and regulations in the context of an evolving, changing and adapting society — which are formed to help humankind — rather than as fixed structures and values, rigidly fixed in place and inflexible, to which humankind is enslaved and under the burden of which humans are often squashed.  I think you’ll know at this point by my rhetoric which side I stand on.

A wise guy in the ancient Middle East said it well,

“The Sabbath was made for man, and not man for the Sabbath.”

What do the words of an ancient prophet have to do with Airbnb hosting?  They lend perspective on how we can either use laws to support valuable or benign human endeavors, or to suppress them.

Highly legalistic and literal-minded human beings are unable to get beyond what their families, tribes, or governments tell them, and then to envision new possibilties.  Their level of moral development is at a lower level than those visionary individuals who pursue totally new ideas and start movements.  Actually the study of moral development in human beings is interesting, and I recommend the book  Spiral Dynamics by Don Beck.  He describes how moral development moves along levels called “memes”.  At the lowest level,  you will tribes where everyone has to do what the tribal leaders dictate under pain of ostracism or even death (we see this in the modern day in religious cults and fanatical/terrorist groups like Daesh) , through to more complex societies where diligent literalists mindlessly pursue a set of encoded social mores, values and laws , and on to the highest level, where, if you hadn’t guessed yet — individuals actually think for themselves!!  And in the process, come up with their own moral values, beliefs and decisions, freed from all cultural and poltical “shoulds”.

Many people limited by a legalistic and literalistic mindset,  live in America, a country which would not exist if its founders had obediently followed the law of their British overlords.  Many of these people are , in addition,  Airbnb hosts, who would not be doing Airbnb hosting today, if the founders of AIrbnb had been individuals concerned about always strictly following the letter of the law.  Airbnb would not exist today and no one would be “hosting” today, if its founders had started by consulting the law and the law’s representatives, and had first dutifully gone to their city’s Business Licensing or Zoning office, or into their City Council Chambers,  asking if the city could please change the law because they wanted to start having paying guests stay at their home.  No, had the founders done that , they would have been laughed out of the Council hall.  It was not possible to start this movement by getting right with the then current law.  Rather it was necessary to create a movement sizeable enough to create a significant challenge to these outdated laws.

The point being, many of those who scold others about being sure to cross all t’s and dot all i’s when following the law, are simultaneously enjoying many rights and freedoms, which they would not have if everyone thought like themselves and always took their advice.
Sometimes mass civil disobedience is needed, and the laws of the land need to be violated, and violated by great numbers of people, to accomplish some good and movement forward for all.  Ghandi knew this, and led his people to make salt when this was prohibited.  Making salt…seems a small thing.  So does doing what you want with your own bedroom.

make salt and rent rooms
make salt and rent rooms

 

His government was oppressive in his day, and it continues to be intrusive and nannying in our day.

 

 

There’s a saying that is pertinent, and it goes like this:

Be the Change!!
Be the Change!!

Short term rental laws are a “Moving Target”

What do we get when we have many sets of outdated laws, and a large movement, or phenomenon, of people trying to move society beyond their shortsighted limitations?  What we have is a situation in flux, a “moving target” of regulations as it were.    Hence, it can be misleading to characterize something as “illegal” when in fact it may be illegal today, and quite legal tomorrow, or the reverse — it’s legal today, but will be illegal in 4 months or a year from now.    When “legality” is so rapidly changing, let’s not speak as if it is something set in stone.  The terms legal/illegal are just not that helpful,  and can be  misleading and problematic for a cultural phenomenon which is very much in flux and in regards to which, many cities are in the process of, or planning to, rewrite their regulations.  Particularly in those parts of the world where the regulations on short term rentals have not yet been revisited by their municipalities in the new era of Airbnb hosting, I think it is shortsighted to quote such regulations as if they were definitively authoritative and final.  So, particularly with regard to a phenomenon which is so challenging the status quo (and keep in mind the “status quo” tends to be large commerical operators, eg “hotels”),  it is necessary that we can look beyond simplistic distinctions between black and white, legal and illegal, and envision the future, and how this and other movements fit into the future that we would like to see.

 

Some Regulations on Short Term Rentals are needed

Though the libertartian in me blanches at the thought of any government telling people what they can and cannot do with their own bedrooms,

keep calm and stay out of my bedroom
My Bedroom = Not a place for  government to be intruding

not all short term Airbnb rentals are of bedrooms in the host’s home.  For this reason primarily, I acknowledge there is a point to having fair and reasonable regulations on short term rentals — and in some cities, such regulations have been more necessary than in others.  I see significantly more rationale in governments regulating the use of apartments in large multi-unit buildings, for instance, than in governments regulating property owner’s use of bedrooms in the home they live in.

Quite often, in smaller cities or towns which are not large tourist meccas, and where there are relatively fewer Airbnb or other short term rental (STR) hosts, regulations are not needed because there is simply no problem.  Palo Alto, California is an example of a city which decided that it did not need to visit this issue, as short term rentals had not caused any problems in Palo Alto.  See this story to read about that.

In other cities, such as New York City or New Orleans, which are tourist cities, many individuals have been motivated either to buy up or to rent out properties solely to turn around and offer them as short term rentals, so high is the demand for entire home/apartment short term rentals in these cities.  New York city with liberty statueThis has created some problems for neighbors and neighborhoods.  Where real problems exist for neighborhoods and communities, then we see the rationale for some reasonable regulations.

In sum, what I have been trying to do here, is argue not that laws aren’t needed or that it’s fine for all Airbnb hosts to violate any laws pertaining to their business — but rather, that there is a complexity on the issue of the legality of short term rentals, and there is a larger context, and these things need to be  appreciated. The simpleminded approach of “if it’s illegal you shouldn’t be doing it” just doesn’t apply well to this new phenomenon — which we would do well to recall, is really a very old phenomenon.  Just because there is a law prohibiting something, does not mean that law is right.  Just this year in the US, in June 2015, the US Supreme Court decided the case  Obergefell vs Hodges , and determined, all of a sudden, that gay and lesbian individuals had the right to marry. News of the ruling.  The day before this decision, gay marriage had been prohibited in 13 states. Then the following day it was legal.  The “rightness” of gay marriage did not change all of a sudden on that one day — it had been right all along, it just took the law quite some time to catch up.  A similar situation applies to short term rentals.

Difference between city/state/regional laws and contracts 

15s0zf4Sometimes when this issue of legality arises, in conjunction with short term rentals,  confusion can arise between citizen’s obligations to regulations/laws of their governments, on the one hand, and their own responsibilities and obligations to private individuals or organizations that they have via contracts with those individuals/entities, on the other.  While it can be pointed out that government regulations on short term rentals are often unclear, outdated, or in a state of flux, and thus the duty that citizens have to this nebulous and changing body of law can be seen as qualified by their very ephemeral nature, (and/or their unjustness) the contractual agreements we have with private individuals or entities are of a different order.  These private agreements were entered into willingly (unlike government regulations, which are often imposed upon individuals who have no say in the matter) and are more ethically compelling than government regulations.  212we8oWhich is to say, that in my view, a tenant’s obligation to their landlord, or a condo owner’s obligation to their condo association, is of a different moral order or nature, than that same tenant’s or condo owner’s obligation to their government.  We can speak of “civil disobedience” with regard to unfair government regulations, but we cannot speak of “civil disobedience” with regard to an individual with whom we have entered into a private business contract.

A reasonable approach 

I’d like to suggest that a reasonable approach to short term rentals, requires starting with the perspective that the existing laws on this issue, in most cities, are simply out of date and irrelevant to modern times.   As some have said, “The Sharing Economy is here to stay”.  (I admit, the term “Sharing Economy” isn’t the best to refer to micro-entrepreneurial enterprises.  “Peer to Peer Economy” is a better phrase.” )  Hence, cities should not be enforcing out of date laws, but either deciding not to regulate short term rentals, where these cause no problems,or working to pass new regulations which are fair and reasonable.

Berkeley, California is a good example of a city taking a common sense approach.  The city of Berkeley_image_towerBerkeley refused to enforce existing law prohibiting short term rentals, when city officials realized that the Airbnb phenomenon was as large as it was — meaning, there were hundreds of short term rental hosts in that city.  It was a movement.  So the city set about to create new short term rental laws, and while it was doing that, refused to enforce the old, outdated laws that it was working to rewrite — a very reasonable and practical approach, and one more cities should emulate. People complaining to Berkeley’s Code Enforcement or Zoning Dept about those doing short term rentals, were out of luck, as they were met with the response that Berkeley was not enforcing those laws.

By contrast, the author of    This Story   about Airbnb hosts in Roanoke, VA, doesn’t seem to appreciate the wisdom of the position  that Berkeley took on the issue, and  illustrates the foolishness of the belief that cities should enforce those laws which are rapidly on their way out.

This refusal by the City of Berkeley to enforce laws which were on their way out, was also wise in that it prevented many people from using these laws simply to bully their neighbors — something which wise government leaders will acknowledge, that miscreant neighbors like to do.  There were numerous complaints coming into the city of Berkeley from one particular individual, a tenant in a large apartment building,  who seemed to have a vendetta against someone.   He wrote long pages of letters to the City Council and Planning Commission, urging the most drastic and draconian of penalties be applied to an individual who was actually no longer even doing short term rentals, but long term rentals listed on Airbnb.  He urged huge fines and asked for criminal penalties as well, for these individuals.  One City of Berkeley Planning Commissioner responded to this tenant’s salacious desire to see others slapped with criminal penalties, by quipping,  “Why don’t we just bring back the firing squad?!!” Actually, New York City has just about done that, by suggesting that those who violate its short term rental laws, be  subject to $50,000 fines !!

Affordable housing — problems and solutions  

It is worth mentioning, in this context, that the juxtaposition of two emerging phenomena, is resulting in a degree of irrational animosity towards Airbnb hosting, which would be unlikely in another context.  At the same time that short term rental hosting on Airbnb and other venues is emerging, we have a housing crisis,  and in particular, an affordable housing crisis, in many areas of the nation and world.  Many who are upset about the lack of housing or affordable housing, readily blame Airbnb and short term rentals for this problem, even though the housing crisis has been in the making for many decades.  Airbnb is a convenient scapegoat for a problem which is complex, and many-sided.  This battle and this animosity have recently been seen in sharp relief in San Francisco, home to Airbnb headquarters, and also home to many organizations with goals of promoting affordable housing, stopping evictions, offering greater protections to tenants, and strengthening rent control laws — though it remains to be seen just how rent control laws could be strengthened in the city which, of all places in the world, may well have the most extreme degree of tenant protections and rent control laws on the planet.  Many SF property owners have a hard time in this setting  , and there are many stories of abuse and exploitation of rent control laws by tenants.  There have already been many horror stories of property owners who were unable to move into their own homes, such as in this such as in this case of a small SF landlord ,or who have had to pay a king’s ransom to do so.  Just how such laws could be tipped even more in favor of tenants who seem to have more rights to the properties they live in, than the owners themselves, remains to be seen.

In any case, unable to find any easy target to blame for the escalating rents in the nation’s most expensive rental market, many of these organizations have decided that Airbnb is to blame, and duly cited a few hundred “rogue” hosts who are apparently doing illegal rentals of apartments which they dont’ actually live in.  The point seems to escape these tenant and affordable housing  organizations, that if and when (I think it will be “when” and not “if”)  these property owners are forced to stop doing short term rentals of these properties, they are unlikely to then kindly offer these units as permanent  housing to some of the tenant activists who have been so ardently castigating them and attempting to wrest control of their properties away from them.    Instead, such owners are much more likely to  allow these units to join the other 31,000 other rental units which have been taken completely off the market in San Francisco by their owners, due to those owner’s desire not to be hemmed in by what they and many others experience as exceptionally oppressive rent control laws.  See one such story here . Or read here a story of an owner who is being bullied by his tenant   . Or, they may offer those units as “medium term rentals” on  Sabbatical Homes , which would allow them to fulfill all legal requirements, and not do short term rentals, but not allow their units to be available as anyone’s permanent housing, thus finding a way to avoid the rent control laws they despise.    There have been a few news stories showing that property owners are often doing just this.

Hence,  I think it’s unlikely that property owners are going to be forced into doing any kind of business with their properties that they dont’ want to be doing.  So I think viable strategies for solving the housing crisis and the affordable housing crisis, cannot be made through violent efforts to force property owners to do what they dont’ want to do.  There must be (and I believe there are!) other solutions to the housing crisis, than developing more and more oppressive regulations for property owners.

(I will write more about Airbnb hosting , the crisis in housing/affordable housing, and why I believe rent control is an outdated and increasingly useless means of creating affordable housing,  in another blog. So stay tuned!)

Offering short term rentals, or any type of rentals, is actually an affordable housing solution both for homeowners, as well as for tenants who have permission to sublet.  Renters are not the only ones who need affordable housing, and help affording their housing — homeowners also need affordable housing, and renting out space in homes has been a means to access affordable housing,  long before Airbnb arose — though the popularity of Airbnb hosting with homeowners is hearkening us back to the 19th century in America, when “putting up boarders” was much more common.  (This will also be a subject for another blog).

The types of accomodations that travelers choose are changing in this country, and housing is also changing.  I expect that we will continue to see many changes in terms of how people are housed, and how they use their housing.  In the midst of all of these changes, how likely is it for the law to always remain rigid and inflexible, unchanging in spite of the rapid change of society?  Let’s take the perspective that laws need to change as our society changes, and continue to push for changes that can easily be viewed as restoring older rights and customs,  ways of traveling and housing travelers, that existed for centuries before there were hotels.

Travelers Come Back Home

Mary and Joseph
The original Airbnb-ers

You know all those hoteliers who are getting upset about the competition they are getting from hosts in private residences?  Well hotels didn’t used to exist.  In antiquity, all travellers stayed in private residences.   As time went on, hotels took the travelling guest business away from private residences, and many cities reified and codified this change by developing zoning laws that helped hotels retain their monopoly.  Now we are returning to some of the same form of ancient hospitality we used ot have, and so the hotels’ monopoly on this business is being broken.

And therein lies a story for another blog!

 

 

 

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