Airbnb fights back against Boston!
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
The City of Boston recently enacted regulations that severely restrict property owners from renting out their homes by the night, unless the owner lives in the unit - a move aimed squarely at Airbnb.
I don't have a dog in this hunt, but it seems to me that restricting an owner's use of his own private property without compensation is just reprehensible, so long as it doesn't cause a hardship to others
Placing a pig farm in a residential neighborhood seems like an unreasonable burden to others. Having guests sleep in your property doesn't.
Well, Airbnb is fighting back. They've sued the City of Boston.
"The lawsuit filed Tuesday in federal court says the ordinance violates state and federal law by forcing home-sharing platforms to share information about clients with the city and requiring the platforms to enforce the new rules."
https://boston.cbslocal.com/2018/11/13/airbnb-sues...
Godspeed, Airbnb. Enough of Regulation Nation.
The argument that the government is taking away home owners rights is BS. If the owner does not live full time in the property he is not a home owner. If investors are not allowed to do what they want they don't invest. They go else where or invest in something else. No crime no fowl.
That seems like a bizarre standard. if I own a car that I do not commute to work in on a daily basis, does this mean that I do not own this car?
@Joe Splitrock AirBnB makes both of the arguments that we have pointed out. They have no issue with the registration of STR either btw.
I'm not a lawyer, so I have no idea why they picked what arguments they did and if they hold any water. Maybe they are throwing a bunch of stuff at the wall and plans to see what sticks?
Making judgements to which business the Communications Decency Act applies or doesn't is far outside my legal education so I'll refrain from commenting.
@John Clark all of your points about info sharing, while correct in their conceptual execution (except for the idea that AirBnB is the only party to have transnational info, the renter and property owner do too), hinge upon the idea that AirBnB has any duty to share that information with the government, that the government can't get that information any other way to enforce its regulations, and that the government has a need for the information if they can't get it anywhere else. In the later case, a process already exists, it called a search warrant.
And I do not see how making AirBnB's computers "kill" a profile once they have passed 120 rented days is not making AirBnB enforce the City of Boston's laws. Whether it is a computer, a person, or a monkey with a marker, the act, not the mechanism, is what matters in determining enforcement.
Also the bar analogy is completely specious. A bar patron buys a drink from the bar. AirBnB connects two parties, one who has a property for rent, the other who wants to rent a property.
My original point still stands. AirBnB isn't fighting the regulation of STR, it's fighting government imposition of its day to day operations.
"And I do not see how making AirBnB's computers "kill" a profile once they have passed 120 rented days is not making AirBnB enforce the City of Boston's laws. Whether it is a computer, a person, or a monkey with a marker, the act, not the mechanism, is what matters in determining enforcement.
Also the bar analogy is completely specious. A bar patron buys a drink from the bar. AirBnB connects two parties, one who has a property for rent, the other who wants to rent a property.
My original point still stands. AirBnB isn't fighting the regulation of STR, it's fighting government imposition of its day to day operations."
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Once the person has passed 120 days of rental, later rentals would be illegal. AirBnB knows that, because AirBnB tracks usage (tomake sure it gets paid). So AirBnB is knowingly facilitating an offense. It is Boston's right to prevent that. That has nothing to do with "day to day operations." You can't facilitate transactions you know to be illegal.
As for the bar, let me remind you that AirBnB takes a cut from the transaction. It's not just connecting two parties. It brokers them, and profits from having the listings, if only to play up network effects to get other hosts to post on AirBnB. Is it a great analogy? No. It does point out, however, the right of government to place burdens on a business to protect the public weal. Certainly selling drinks is a bar's "day to day operations."
As for getting the information, AirBnB is doing business in Massachusetts, and Boston in particular, so the question becomes whether Boston's demands are reasonable. Making sure that AirBnB only does business with registered property hosts -- by having AirBnB turn over host lists -- is reasonable. If AirBnB does not do so, then AirBnB is potentially facilitating illegal transactions, and will be fined for so doing.
"And I do not see how making AirBnB's computers "kill" a profile once they have passed 120 rented days is not making AirBnB enforce the City of Boston's laws. Whether it is a computer, a person, or a monkey with a marker, the act, not the mechanism, is what matters in determining enforcement.
Also the bar analogy is completely specious. A bar patron buys a drink from the bar. AirBnB connects two parties, one who has a property for rent, the other who wants to rent a property.
My original point still stands. AirBnB isn't fighting the regulation of STR, it's fighting government imposition of its day to day operations."
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Once the person has passed 120 days of rental, later rentals would be illegal. AirBnB knows that, because AirBnB tracks usage (tomake sure it gets paid). So AirBnB is knowingly facilitating an offense. It is Boston's right to prevent that. That has nothing to do with "day to day operations." You can't facilitate transactions you know to be illegal.
As for the bar, let me remind you that AirBnB takes a cut from the transaction. It's not just connecting two parties. It brokers them, and profits from having the listings, if only to play up network effects to get other hosts to post on AirBnB. Is it a great analogy? No. It does point out, however, the right of government to place burdens on a business to protect the public weal. Certainly selling drinks is a bar's "day to day operations."
As for getting the information, AirBnB is doing business in Massachusetts, and Boston in particular, so the question becomes whether Boston's demands are reasonable. Making sure that AirBnB only does business with registered property hosts -- by having AirBnB turn over host lists -- is reasonable. If AirBnB does not do so, then AirBnB is potentially facilitating illegal transactions, and will be fined for so doing.
To your first point, AirBnB does not know which rentals have passed 120 days because 1. it does not actively screen posts before they go to the site and 2. does not count how many days a specific unit has been rented in a year, because they have no need to. So they cannot knowingly break the law. The State is well within their rights to pass laws governing STR. They are also responsible for enforcing them. Simply demanding that AirBnB do the states job, because "they have the data" and "computers do computer stuff so its not hard" ignores the reality of the situation. AirBnB will have to fundamentally change they way its day to day operations work to comply with this regulation. They will have to screen every post for a Boston STR against an ill defined set of metrics laid out by the city. This also says nothing that the state has passed the onus of enforcement to the private sector with out property compensation.
To the analogy: Just because the government has placed a burden on one business in a limited aspect of their operations isn't carte blanche to do it anywhere any time. Dram Shop laws deal with physical injury and/or death so increased government intrusion is warranted. Nothing so severe is at play with in the STR business. These laws do not make it illegal to serve an overly intoxicated person, they make the serving establishment liable for any harm that results for that intoxicated person's actions. Again, the analogy was and is still specious.
Finally, if AirBnB does not comply with the State's law, they are not simply facing fines, they could potentially be bared from transacting business in the city. The questions at hand are not about the reasonableness of the City's demands. The questions are if they violate one or more Federal and/or State laws.
John, we seem to be on opposite sides of the issue, but I encourage you to read the suit AirBnB has filed. The good folks at Munger, Tolles, Olson have laid out AirBnB's argument far better than I ever could and address many of the points you raise in detail.
Let's break this down shall we?
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"AirBnB does not know which rentals have passed 120 days because it does not actively screen posts before they go to the site"
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Not sure what you are trying to say here, but your statement doesn't say it. One has to register with AirBnB before one can post a host unit. One has to register with the city before one can be a host. Telling AirBnB to compare its registrants to the city's list to make sure the potential host is "city registered" before AirBnB lets the host's posting go live is not too much to ask. No "actively screen posts before they (who is "they?") go to the site" involved.
Remember, the test is "unduly burdensome," not "trifling effort." AirBnB is facilitating transactions that under certain circumstances are illegal. Boston is taking reasonable steps to cull the illegal transactions and permit the legal ones. The alternative is for Boston simply to ban short term rentals full stop. In that case AirBnB would not be "burdened" at all because AirBnB wouldn't be doing business in Boston.
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"[AirBnB] does not count how many days a specific unit has been rented in a year, because they have no need to. So they cannot knowingly break the law."
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Your statement is just plain false. AirBnB's entire business model depends on knowing how many days a unit has been rented because it takes a cut of the transaction price. The transaction price is the unit's daily rate times the number of days the unit has been rented. AirBnB needs both pieces of information in order to conduct its business. Of course AirBnB knows how many days a unit has been rented in a year.
This leaves aside the question of whether it would be unduly burdensome for a city to demand that AirBnB collect this information (number of days rented) even if AirBnB didn't collect that information in the first place. We need not cover this hypothetical, since AirBnB collects the information.
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" . . . AirBnB will have to fundamentally change they way its day to day operations work to comply with this regulation."
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Nonsense. See above.
Let's break this down shall we?
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"AirBnB does not know which rentals have passed 120 days because it does not actively screen posts before they go to the site"
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Not sure what you are trying to say here, but your statement doesn't say it. One has to register with AirBnB before one can post a host unit. One has to register with the city before one can be a host. Telling AirBnB to compare its registrants to the city's list to make sure the potential host is "city registered" before AirBnB lets the host's posting go live is not too much to ask. No "actively screen posts before they (who is "they?") go to the site" involved.
Remember, the test is "unduly burdensome," not "trifling effort." AirBnB is facilitating transactions that under certain circumstances are illegal. Boston is taking reasonable steps to cull the illegal transactions and permit the legal ones. The alternative is for Boston simply to ban short term rentals full stop. In that case AirBnB would not be "burdened" at all because AirBnB wouldn't be doing business in Boston.
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"[AirBnB] does not count how many days a specific unit has been rented in a year, because they have no need to. So they cannot knowingly break the law."
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Your statement is just plain false. AirBnB's entire business model depends on knowing how many days a unit has been rented because it takes a cut of the transaction price. The transaction price is the unit's daily rate times the number of days the unit has been rented. AirBnB needs both pieces of information in order to conduct its business. Of course AirBnB knows how many days a unit has been rented in a year.
This leaves aside the question of whether it would be unduly burdensome for a city to demand that AirBnB collect this information (number of days rented) even if AirBnB didn't collect that information in the first place. We need not cover this hypothetical, since AirBnB collects the information.
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" . . . AirBnB will have to fundamentally change they way its day to day operations work to comply with this regulation."
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Nonsense. See above.
John,
Have you read the lawsuit Airbnb filed? It does not appear you have based on your inaccurate assumptions about their process; most glaringly that Airbnb currently tracks cumulative use per property. Logically they don’t have a need to, since they process the payments. They take a percentage of every transaction. They could care less if someone rents a unit for 5days, then 3day, then 2 days or 10 days straight. They care about the individual transaction fee and not the aggregate days rented per property. In the filling they explain how their operations work in detail. And as with most of these cases the details are what matters.
Apologizes for not clearly explaining the actively screening idea. From the court papers:
So this is not nonsense. They would have to actively screen posts before they go live so as not to have any chance of posting an Ineligible Unit, a Problem Property, an eligible unit that has been rented for more than 120 days in a year, an eligible unit whose owner no longer has a valid registration, and a plain own eligible property. Those categories are all created by the City's ordinance.
Not to mention, it is not Airbnb’s job to stop these violations. Could Ford link its GPS system with the engine management unit and make it so we could never speed? Sure, Waze tells you the speed limit for nearly every road, at least in my experience. A few lines of code and boom no more speeding. Just because something is easily done, doesn’t make it legal. Due the stink I made about your bar analogy it is only fair that I make it clear this analogy only applies to the ordinance, in effect, having Airbnb act as an enforcement mechanism and no other aspect of this issue.
I thought standard for this was reasonableness of the regulation, now it’s “unduly burdensome”? That idea has to do with a discovery request, so I don’t know where you got that idea that this is the test that applies here. Could you please provide a source?
All of this is part only deals with one part of the case, that of the City and Airbnb. The other part which is inextricably linked is the rights of Airbnb’s user to not have their data shared with the government without a search warrant.
This is a complex issue with many facets that cannot and should not be de-linked from each other. I don't have a dog in the fight other than I'm simply a guy who thinks people should have as many facts as they can avaible to them before they form an opinion.
Have a good one.
"reasonableness of the regulation, now it’s “unduly burdensome”?"
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One of the tests for whether a regulation is reasonable is whether it is unduly burdensome.
As for the number of days of rental, my impression is that that is disclosed by the host and guest and therefore is easily tracked and cumulated by AirBnB. It's part of the listing information provided by the host because the host either provides it directly or it can easily be implied from the total transaction cost (e.g. $1,000) divided by the cost per day (e.g. $100) (gee, sounds like ten days to me), with the cost per day and total transaction cost provided by the host and guest.
As for the rights of AirBnB users to not have governments access their data: Sorry, but the law is against you. Once you disclose your data to a third party (AirBnB) you have zero right of privacy in that data. This is particularly true when you give information to a third after after a law has gone into effect providing that the data can and will be turned over to the government. Don't like it? Don't list your property for short term rentals.
AirBnB would be facilitating -- the legal term is "aiding and abetting" -- illegal transactions. That makes AirBnB liable. Just like a pimp facilitiates illegal prostitution but doesn't actually perform the illegal act. The denizens of Boston have decreed -- right, wrong, or indifferent -- that short term rentals cannot exceed 120 days, and the unit must be registered with the city. If you are going to facilitate short term rental transactions in the city, make sure the transactions are legal, 'cuz otherwise you are "aiding and abetting" and can be punished.
It's not a stretch under the common law. It's not unconstitutional. AirBnB will lose. Just like it came to heel in Chicago.
If you are worried that someone would rent out a unit on AirBnB after having rented it out on some other platform for 120 days, it would be Boston's duty to inform AirBnB that the listing is not valid because the 120 day limit was reached.
@John Clark we appear to have divergent understandings and views of this issue and that's great. Passionate discourse is never bad.
I've enjoyed the back and forth, but it seems like we have both said our peace and all we can do now is wait and see what the US District Court for MA has to say about the issue.
Cheers,
Bill
Sounds like a plan. And win or lose, we can meet in Boston to tour the City (I'll go anywhere except South Carolina. I know I am being totally unfair to South Carolina, but that's how it is.).
I wish other angles to increase housing supply were also being explored in Boston...they started an accessory dwelling unit expansion "pilot" program but i think it only included 2 neighborhoods. Many parts of Boston aren't that dense and could do with densification. Would it really kill the city to have some buildings 5 stories instead of 4? 6 instead of 5? Good that there is construction going up all around some of the T stations but it honestly wouldn't change the world if these were one level higher. I'm not saying build 40 stories in every area but it just seems too hard to expand a home to provide more housing stock (or convert from 2 fam to 3 fam etc). I haven't been following the zoning news lately though and very happy to be corrected!
Airbnb can not track the 120 days annual usage, because most property owners are also signed up with VRBO and other platforms, so they only have knowledge of their own bookings, but not the total with all platforms.
"'Airbnb can not track the 120 days annual usage, because most property owners are also signed up with VRBO and other platforms, so they only have knowledge of their own bookings, but not the total with all platforms."
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Which is why I wrote the above post:
"If you are worried that someone would rent out a unit on AirBnB after having rented it out on some other platform for 120 days, it would be Boston's duty to inform AirBnB that the listing is not valid because the 120 day limit was reached."
So once Boston sees a rental totaling 120 days regardless of platform, Boston tells the platforms to kill the listing.
Let's say Boston tells the platforms to report monthly the number of days per rental unit. Boston can send warning notices to each platform once the culminated number of days for a unit reaches 90, and the platforms can start rejecting reservations that would put the unit over the top. In the meantime, if there is an overage because someone gamed the system with split-platform reservations, then Boston can tell the platforms to kill the listings and go after the offending owners
Then there are platforms such as Craigslist. People that have an STR put up an ad. People that want to stay in a STR read the ad and contact the owner directly. The transaction is initiated and completed over the phone, through text messaging, email, or in person. There is no record of the transaction on Craigslist.
"Then there are platforms such as Craigslist. People that have an STR put up an ad. People that want to stay in a STR read the ad and contact the owner directly. The transaction is initiated and completed over the phone, through text messaging, email, or in person. There is no record of the transaction on Craigslist."
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Ah, so Boston's detection method is not utterly perfect (leaving aide neighbor complaints, etc.), and therefore Boston is not allowed to do anything?
Think before you write @Paul Sandhu -- Boston wins this one.
The point is real simple: One cannot create a business model that ignores local laws and regulations and then turn around and say that the business model trumps government laws and regulations on the grounds that otherwise one would have to change the "business model." This is particularly true when the business model imposes externalities on people who cannot move.
If Boston is wrong, then Boston's voters will tell it that. If not, they won't, and Boston will enjoy/suffer the consequences. It's not your place nor mine to tell Boston what it must do, particularly for private corporate "convenience."
@John Clark Think before YOU write. How is Boston going to collect money from rentals done by Craigslist?
Snooping neighbors? City inspectors? The mailman noticing people staying in a house? No.
It's voluntary disclosure by the landlord. How well is that going to work?
It is your place and mine to give Boston residents a suggestion what to do. It's called an internet forum. This is an internet forum.
I'd say put a flat yearly tax on any sort of rental property. The renter will ultimately bear the cost.
"Think before YOU write. How is Boston going to collect money from rentals done by Craigslist? "
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@Paul Sandhu, I did think before I wrote. Since Craigslist doesn't take a cut of the transaction (unlike Airbnb), the money comes from the host. What Craigslist CAN do is not permit the posting until CL has matched the host's information to the list of Boston-registered hosts. Not on Boston's list? Can't post. Boston can collect the information from CL and enforce. AirBnB has a specialized, limited, hosting platform and takes a cut from the host and the guest. One's an apple, the other's an orange.
As for a flat tax, that's possible, although a per diem tax allows hosts who don't want to maximize rentals every year to get in on the action.