I think it's pretty clear that 'without anyone knowing about it' means normally you would expect a debate and news coverage before something like this. It's quite surprising that there appears to have been none.
I understand that they are doing this to help keep housing costs affordable, but Detroit needs tourism income more than they need affordable housing at this point. They have plenty of land and run down houses that can be fixed up if AirBnb raises the cost of real estate in one area.
> Detroit needs tourism income more than they need affordable housing at this point.
Part of the appeal of AirBnB was to live like a local. But if all the neighbors are other tourists than what makes it any more unique than any other resort full of tourists?
This is a little misleading. Was there a mass exodus? Absolutely, but it's turned / turning around.
You would be hard pressed to find any decent apartment within a mile of downtown for less than 1k/mo. Many nice apartments in downtown go for $2k - $3k. I personally would love to live downtown and many of my peers share the sentiment, there just needs to be a larger supply of apartments on the market.
Do I want to live four miles away from Detroit in a run down neighborhood? Not particularly- if I'm already getting into my car to drive to work, why not go a few more miles away into any one of the nice suburbs that surround Detroit?
Or, maybe, the demand for accommodation is relatively inelastic to the small increase in cost when people have to just stay in an actual Hotel, and that small raise in prices ends up staying in Detroit as well...
It's hard to analyse such things without actual numbers. But it seems slightly icky to always go for the "Your're Detroit! You can't afford the luxury of zoning/safety regulations/firefighters/...".
Agreed. Apparently the avg income in Detroit is $26k, houses without all the copper torn out can be had for under $20k. Seems like going after AirBnb hosts is a bad move for the city, if a good move for Hotel owners. Especially given young moneyed consumers preference for airbnb over hotels.
Good luck with enforcement. AirBnB being mostly illegal in NYC hasn’t stopped us from (AFAIR) being the number one source of revenue for them. Nothing seems to deter them. Maybe some city should start looking at what criminal laws might apply (like RICO perhaps).
Ha! This is the perfect investment for you in particular. Maybe you can find some kind of startup that annoys tech employees in growing cities until they leave :)
Highly unlikely that a renter (guest) would be charged with anything. A little less unlikely for an "ordinary" host, but still far-fetched. A little more likely for some kind of AirBnB mogul, especially if he is acquiring (renting or buying) apartments with false documentation or under false pretenses.
My hope would be that the company itself and/or its officials would be charged by some ambitious prosecutor for running a business that pretty openly encourages people to commit wire fraud. I have no idea how likely that is, but probably not very likely. American prosecutors don't have the appetite anymore to take on big companies.
> Could you go to prison for renting an AirBnB in NYC?
It's not a criminal offense, so the punishment is a fine, not prison time.
But it's not just renting an AirBNB that's illegal in New York - listing a short-term, whole-apartment rental is illegal. (Short-term, whole-apartment rentals are not legal, and it's illegal to list an illegal rental).
It's not per se a crime. That is, there's no law that says that renting out an apartment on AirBnB is a crime punishable by x. That's not the same thing as saying that doing so doesn't sometimes or always meet the elements of a crime that does exist on the books.
For example, 18 U.S.C. § 1343 says:
Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
Is a host that takes money for renting out an apartment, while knowing that such rental is in violation of the MDL, obtaining money under false pretenses?
AirBnB's terms of service, say:
7.2.3 You represent and warrant that any Listing you post and the booking of, or a Guest's stay at, an Accommodation will (i) not breach any agreements you have entered into with any third parties, such as homeowners association, condominium, or other agreements, and (ii) comply with all applicable laws (such as zoning laws), Tax requirements, and other rules and regulations (including having all required permits, licenses and registrations).
That makes it seem like a minor issue. AirBNB is facilitating this. AirBNB must allow the government to check up on local regulations. Limitations on how many days you can rent out your property and seeing how many properties each individual has is something only AirBNB has. It's further a very common thing related to their business. The main revenue source for AirBNB is exactly what governments (local city, etc) want data of.
AirBNB has often tried to block this, saying it's should be checked without any effort on their part. It took years of talks for AirBNB to cooperate in e.g. Amsterdam. Fortunately EU is now putting this all into law.
If AirBNB is allowing people to easily break local regulations and AirBNB is made aware of that fact they should follow the local regulations.
In most industries following local regulations is a common sense thing. There's also sometimes a personal effect of not following regulations. E.g. if someone on a vessel spills 1 liter of oil in the water that person can get a jail sentence for this. It doesn't matter if it was an accident or not.
Then for things like AirBNB, Uber, etc completely different rules apply. It makes no sense.
Well, you have a huge city with expensive hotels (the most expensive hotels in Vegas are sometimes cheaper than really average hotels in New York). So, the number of people willing to risk it to make a quick buck is not going to be small.
In addition, there is somewhat of a PR problem for NYC. Kicking people out of their apartments, especially in winter, makes for great outrage news stories--especially if you happen to evict some 82-year-old grandma in rent control who is using AirBnB to pay for her meds.
Better to simply notify the landlords, like San Francisco does, who are then incentivized to evict the scofflaws.
> if you happen to evict some 82-year-old grandma in rent control who is using AirBnB to pay for her meds
It's whole apartment rentals that are illegal. Where is grandma living while she is renting out her rent control apartment, that she pays $900/month for, on AirBnB for $300 a night? Maybe in her second, supposedly not primary, home in Florida?
In any event, I don't suggest they evict hosts. What I suggest is they go after AirBnB for continuing to accept blatantly illegal listings, like this one for example: https://www.airbnb.com/rooms/16148374
While section Section 230 of the CDA is an issue, the fact that AirBnB is taking money from the rental turns this into more than just a third party publisher of information. If Cy Vance wasn't too busy taking campaign donations to look the other way for powerful people, I'm sure he could direct his office to come up with something. Or Berman in SDNY could.
I think AirBnB would be a force to help people keep their housing, driving rents up but allowing people flexibility to generate more income if they are falling back. I'm interested to see how the company responds.
> I think AirBnB would be a force to help people keep their housing, driving rents up but allowing people flexibility to generate more income if they are falling back.
Until it becomes the new normal, and market rents will factor that in. Then, people who, for whatever reason, cannot rent half their apartment out on AirBnB will just be priced out.
Or it could fuel housing bubbles to new heights. The fact that there are now housing lenders who use projected AirBNB revenues in determining creditworthiness is worrying.
If the property is more valuable there is no bubble. I do agree some lenders might get this wrong, but an overall increase is pretty reasonable I think.
Counting it as just straight up income is not correct, though, given that AirBNB is essentially the hospitality business, which is highly cyclical. The first thing people cut back on is traveling, and hotels are not afraid to race to the bottom to fill rooms.
Detroit has different problems than other cities. Slumlords are renting individual rooms in trashed homes not up to code.
This restriction stops short term rentals in neighborhoods, leaving areas zoned as business (neighborhoods close to downtown and Woodward) free to host.
I suspect this is targeted at low-end prostitution. A lot of prostitution enforcement targets the johns because they have more to lose. That vaporizes if the john can set up an AirBnB and get met there.
A lot of this issue seems to be people operating in bad faith. Airbnb wants the narrative to be that most of their business is regular people renting out a spare room to make some extra money. Certainly that's a component of their business and one I think, and think most people would agree should be encouraged. Airbnb unfairly plays up this angle while ignoring the fact that many hosts are larger businesses that are taking up housing stock to run an unregulated hotel. There are also plenty of people holding multiple leases (especially in NYC) to rent one place out on Airbnb where you can easily make more than the rent per month. This has some socialized costs in that it reduces the housing supply which drives up rent for everyone else which cities may want to avoid.
Hotels and some city people want to focus on the fact that there is unfair competition going on but also seem to recognize that the model is a threat to their bottom line. They seem to want defensive regulation to block all of it rather than just the part that is truly unfair to them some of which is fixed now that Airbnb collects and pays taxes. Not sure if they're at full parity with the hotels in terms of taxes and feels like they should be. Of course a city always has the option of removing these fees for everyone if they think it's unfair.
> Airbnb unfairly plays up this angle while ignoring the fact that many hosts are larger businesses that are taking up housing stock to run an unregulated hotel. There are also plenty of people holding multiple leases (especially in NYC) to rent one place out on Airbnb where you can easily make more than the rent per month.
Not just "many". In New York specifically, it's literally over 50% that are illegal, by virtue of being whole-apartment rentals. Whole-apartment rentals of less than 30 days are not legal.
Ironically, many of the people that AirBNB used to use in their PR campaign as the faces of the "little guy" using AirBNB to "make their rent" were actually people who lived in rent-controlled apartments, which is (almost always) illegal in practice, even if the whole apartment is not being rented.
Airbnb wants the narrative to be that most of their business is regular people renting out a spare room to make some extra money. Certainly that's a component of their business and one I think, and think most people would agree should be encouraged.
No, it should absolutely not be encouraged. As a neighbor I do not appreciate a steady stream of different faces waltzing through the place where I live. I do not appreciate the pressure on resources, like the communal wash kitchen, which gets far more use since it suddenly has to serve commercial purposes, for which it's not intended. I don't appreciate the garbage lying around, the noise, the doors not locked and generally transient folks who don't give a shit about the place in which they live for a couple of days.
Hotels and some city people want to focus on the fact that there is unfair competition going on but also seem to recognize that the model is a threat to their bottom line.
It has nothing to do with that. It's a massive assault on the quality of life of the residents that actually live in such a house. Unless you never experienced that you really don't know how shitty such a situation can be.
Does Detroit need more regulation right now? For a city that's struggling to attract people to visit/live there, is cutting off a source of income for residents and an option for visitors in the city's best interests?
All governing is balancing of competing options, so any decision could be attacked by pointing at the right lobby and saying "But Detroit needs the income from Mercury Lollipop Manufacturers/Low-end tourism/The Church of the Sacrifice of Fluffy Animals".
In this case, they've probably thought about and decided that almost all potential visitors will still be able to afford one of Detroit's surprisingly cheap hotels, and that the rest may not actually be the crowd you want to attract, anyway.
47 comments
[ 5.2 ms ] story [ 108 ms ] threadShould the city have spent a few hundred thousand dollars on a PSA? People love calling those a 'waste of money.'
Part of the appeal of AirBnB was to live like a local. But if all the neighbors are other tourists than what makes it any more unique than any other resort full of tourists?
You would be hard pressed to find any decent apartment within a mile of downtown for less than 1k/mo. Many nice apartments in downtown go for $2k - $3k. I personally would love to live downtown and many of my peers share the sentiment, there just needs to be a larger supply of apartments on the market.
Do I want to live four miles away from Detroit in a run down neighborhood? Not particularly- if I'm already getting into my car to drive to work, why not go a few more miles away into any one of the nice suburbs that surround Detroit?
It's hard to analyse such things without actual numbers. But it seems slightly icky to always go for the "Your're Detroit! You can't afford the luxury of zoning/safety regulations/firefighters/...".
First offense: $1000 | Second offense: $5000 | Third offense: $7500 and so on (daily).
Disclaimer: Invested in a startup that does AirBnB surveillance/reporting for jurisdictions.
My hope would be that the company itself and/or its officials would be charged by some ambitious prosecutor for running a business that pretty openly encourages people to commit wire fraud. I have no idea how likely that is, but probably not very likely. American prosecutors don't have the appetite anymore to take on big companies.
It's not a criminal offense, so the punishment is a fine, not prison time.
But it's not just renting an AirBNB that's illegal in New York - listing a short-term, whole-apartment rental is illegal. (Short-term, whole-apartment rentals are not legal, and it's illegal to list an illegal rental).
For example, 18 U.S.C. § 1343 says:
Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
Is a host that takes money for renting out an apartment, while knowing that such rental is in violation of the MDL, obtaining money under false pretenses?
AirBnB's terms of service, say:
7.2.3 You represent and warrant that any Listing you post and the booking of, or a Guest's stay at, an Accommodation will (i) not breach any agreements you have entered into with any third parties, such as homeowners association, condominium, or other agreements, and (ii) comply with all applicable laws (such as zoning laws), Tax requirements, and other rules and regulations (including having all required permits, licenses and registrations).
That makes it seem like a minor issue. AirBNB is facilitating this. AirBNB must allow the government to check up on local regulations. Limitations on how many days you can rent out your property and seeing how many properties each individual has is something only AirBNB has. It's further a very common thing related to their business. The main revenue source for AirBNB is exactly what governments (local city, etc) want data of.
AirBNB has often tried to block this, saying it's should be checked without any effort on their part. It took years of talks for AirBNB to cooperate in e.g. Amsterdam. Fortunately EU is now putting this all into law.
If AirBNB is allowing people to easily break local regulations and AirBNB is made aware of that fact they should follow the local regulations.
In most industries following local regulations is a common sense thing. There's also sometimes a personal effect of not following regulations. E.g. if someone on a vessel spills 1 liter of oil in the water that person can get a jail sentence for this. It doesn't matter if it was an accident or not.
Then for things like AirBNB, Uber, etc completely different rules apply. It makes no sense.
Well, you have a huge city with expensive hotels (the most expensive hotels in Vegas are sometimes cheaper than really average hotels in New York). So, the number of people willing to risk it to make a quick buck is not going to be small.
In addition, there is somewhat of a PR problem for NYC. Kicking people out of their apartments, especially in winter, makes for great outrage news stories--especially if you happen to evict some 82-year-old grandma in rent control who is using AirBnB to pay for her meds.
Better to simply notify the landlords, like San Francisco does, who are then incentivized to evict the scofflaws.
It's whole apartment rentals that are illegal. Where is grandma living while she is renting out her rent control apartment, that she pays $900/month for, on AirBnB for $300 a night? Maybe in her second, supposedly not primary, home in Florida?
In any event, I don't suggest they evict hosts. What I suggest is they go after AirBnB for continuing to accept blatantly illegal listings, like this one for example: https://www.airbnb.com/rooms/16148374
While section Section 230 of the CDA is an issue, the fact that AirBnB is taking money from the rental turns this into more than just a third party publisher of information. If Cy Vance wasn't too busy taking campaign donations to look the other way for powerful people, I'm sure he could direct his office to come up with something. Or Berman in SDNY could.
Until it becomes the new normal, and market rents will factor that in. Then, people who, for whatever reason, cannot rent half their apartment out on AirBnB will just be priced out.
By who exactly?
Do you have a source for this?
And now apparently Fannie Mae is moving into this space: https://www.wsj.com/articles/gig-economy-grows-up-as-lenders...
https://www.prnewswire.com/news-releases/quicken-loans-ameri...
This restriction stops short term rentals in neighborhoods, leaving areas zoned as business (neighborhoods close to downtown and Woodward) free to host.
Airbnb for the rich only. Seems backwards.
Hotels and some city people want to focus on the fact that there is unfair competition going on but also seem to recognize that the model is a threat to their bottom line. They seem to want defensive regulation to block all of it rather than just the part that is truly unfair to them some of which is fixed now that Airbnb collects and pays taxes. Not sure if they're at full parity with the hotels in terms of taxes and feels like they should be. Of course a city always has the option of removing these fees for everyone if they think it's unfair.
There's plenty of hypocrisy to go around here.
Not just "many". In New York specifically, it's literally over 50% that are illegal, by virtue of being whole-apartment rentals. Whole-apartment rentals of less than 30 days are not legal.
Ironically, many of the people that AirBNB used to use in their PR campaign as the faces of the "little guy" using AirBNB to "make their rent" were actually people who lived in rent-controlled apartments, which is (almost always) illegal in practice, even if the whole apartment is not being rented.
In this case, they've probably thought about and decided that almost all potential visitors will still be able to afford one of Detroit's surprisingly cheap hotels, and that the rest may not actually be the crowd you want to attract, anyway.