The Real Problem With Airbnb


Last week, right before Airbnb lost a supposedly existential fight, their top operative lamented that the State of New York wasn’t thinking big anymore.

“I think the question before New York, including specifically Governor Cuomo, is, [is] our state going to make a choice between the middle class and a backroom deal, between the people and the powerful, between going forward or going backwards?” Chris Lehane, Airbnb’s global head of public policy, asked reporters. “In many ways, do you want to have a new Penn Station or an old Penn Station, a new LaGuardia or an old LaGuardia?”

Airbnb was fighting the state over a bill signed into law that will introduce fines for the illegal apartment listings that are their lifeblood. For defenders of the home-sharing colossus and their tech evangelists, it was a dark day. Commentators warned New York would garner an “anti-tech” reputation.

The hubris of sharing economy enthusiasts far exceeds any of the stuff needed for a new LaGuardia or Penn Station, even if what these people proffer is far less consequential. Airbnb’s revolution doesn’t quite rank with high-speed train travel, the electric bulb, or a modernized airport. Instead, its swollen valuation depends on a flouting of zoning logic that keeps big cities from turning entirely into Ayn Randian theme parks. It’s illegal in New York to rent out your apartment for less than 30 days if you’re not present because allowing landlords to transform apartments into hotel rentals would decimate housing stock. Why profit from annual leases when all that tourist cash is sitting on the table?

Under the law, advanced by Republicans and Democrats alike and rubberstamped by Governor Andrew Cuomo, listing an illegal rental on AirBnb will come with a $1,000 fine on the first offense and a $7,500 on the third. Since Airbnb depends on rapidly increasing their listings to maintain their valuation, facing these kinds of regulations in the country’s largest housing market is potentially devastating.

Airbnb and its rules-hating cousin, Uber, traffic in similar logic, though their approaches vary. Uber, so far, appears to be the wiser giant, bullying Mayor Bill de Blasio into submission while understanding that some sort of deal had to be cut with regulators. While there should be a cap on Uber and other for-hire services, there isn’t any, and the company understood it couldn’t set up shop in New York City and immediately violate laws already on the books. Airbnb thought it could flout state law. It failed—at least for now.

Lehane’s argument—likening a company that eases the peddling of short-term rentals to rebuilding crucial transportation hubs that serve millions—speaks to the hollow arrogance underlying tech behemoths. At least in the era of robber barons, or under the reign of municipal despots like Robert Moses, something tangible was built. Steel, oil, suspension bridges, parks—the machinery of the body politic was fastened into place for centuries to come. Many of the digital barons, Airbnb and Uber in particular, facilitate age-old services in the guise of something better, trading convenience for the exploitation or blatant disregard of the city’s poor. (One exception is Elon Musk, who is focusing on electric cars and space travel over more trivial things.)

Creating an app to get you a cab from Greenpoint to Gowanus or rent your studio to a well-heeled Scandinavian couple doesn’t constitute a pivot point in history, though it’ll make you plenty of money. It helps that Airbnb and Uber have convenient villains: hotel and real estate moguls revile Airbnb, and some of the most heinous medallion owners are losing out to ride-sharing. The narrative writes itself.

But Uber wouldn’t dream of letting its drivers unionize or granting them the kinds of benefits once enjoyed by many blue collar workers. The so-called gig economy imagines a utopia that doesn’t exist, where privileged employees giddily float from job to job, as opposed to the marginalized taking on part-time work out of desperation. If Airbnb wanted to finance the construction of affordable housing in the five boroughs, their model could truly work for everyone. If we had vacancies to house tens of thousands of new quasi-hotels and city residents in dire need of reasonably-priced housing, then Airbnb could exist without sin.

But we know that isn’t the case. Airbnb is now suing, hoping the courts overturn the new law. If they want to keep their business model, they better win.