Much like Uber, Airbnb has come under attack from people with a vested interest in the status quo and a general fear and loathing of the gig economy. That scenario seems to be playing out yet again in Boston this year, where Mayor Martin J. (Marty) Walsh is rolling out new regulations clearly designed to make it harder for people to engage in such practices. Of course, it’s being portrayed as a way to “alleviate the housing crisis” by his supporters, but that’s a rather dubious claim at best. (Boston Globe)
In a bid to ease Boston’s persistent housing shortage, Mayor Martin J. Walsh is seeking to rein in Airbnb and other online services that have turned thousands of apartments and condos into de facto hotel rooms.
After more than two years of research and discussions among City Hall, housing advocates, and rental companies, the Walsh administration on Monday will propose limits on how frequently landlords can offer their units for short-term stays as opposed to conventional 12-month leases.
If approved by the City Council, the measure could potentially free up as many as 2,000 units for long-term renters, according to city officials. It could also undermine a burgeoning industry in which landlords lease apartments by the night to tourists, business travelers, and other visitors.
The Mayor is claiming that a “persistent housing shortage” is the reason for this maneuver. Of course, that explanation has a lot of problems. First of all, there’s this thing called the free market. Perhaps you’ve heard of it? If there is a demand for more apartments and prices are going up, people can and will build new apartment complexes (or convert existing structures) to fill that void if the government doesn’t make the process too onerous. But we’re talking about Massachusettes here, specifically Boston, so the government pretty much makes everything expensive and painful. By making the environment more friendly to people interested in investing in such opportunities, Walsh could solve several problems at once.
Instead, they’ll go the typical route of attempting to regulate the “problem” out of existence. In this case, they will limit people who lease entire apartments, condos or houses to only 90 nights per year. That basically wipes out three quarters of the year in terms of profits. They claim that those renting out a single room will have “looser guidelines” but that only puts the lie to this campaign in a more stark fashion. If your noble intention it to move more rental units back on the market for long-term leasing, why would you have any restrictions on how many nights someone can lease out their spare bedroom? Nobody is going to be renting out a bedroom by the year to an entire family.
As usual, the more plausible explanation is probably the accurate one. People in the hotel and real estate industries hate Airbnb with a passion because they don’t like the competition. Lobbying groups like the American Hotel and Lodging Association (AHLA) have been fighting to put the gig economy out of business from day one and they exert plenty of influence on politicians in the form of cold, hard campaign cash. Local groups with similar interests, such as the Massachusettes Association of Realtors, are equally active, and that outfit has been very generous to Mayor Walsh.
This is all part of a larger tapestry. Last year, the New York Times put together an admirable bit of investigative journalism where they went inside the AHLA and exposed documents which set forth their long-term plan to crush Airbnb. The plan was described as “a multipronged, national campaign approach at the local, state and federal level.” They described how they planned to target, “key markets, including Los Angeles, San Francisco, Boston, Washington and Miami.”
They also enlisted help from Washington. And who do you go to if you want someone to do a favor for the unions and trade groups? The Democrats, of course.
In New York, the association began working with local affiliates to lobby state legislators and the governor’s office to adopt steeper fines for New York City hosts that list on Airbnb in violation of local law, a move that hotel operators had hoped would help increase their business.
The association also sought help from politicians in Washington. In its documents, the group said it had worked with Senators Brian Schatz of Hawaii, Elizabeth Warren of Massachusetts and Dianne Feinstein of California. The three Democrats sent a letter to the Federal Trade Commission in July “raising concerns about the short-term rental industry,” one of the hotel association documents said.
You can read the full document here. They make no effort to conceal their strategy. The plan lays out milestones for getting new legislation restricting Airbnb operators at the city and state level, as well as investing in earned media to “build a national narrative” about how harmful short term rentals are. The goal is to get state and municipal governments to “impose much steeper fees” for violations of rental codes.
Going back to the text of the Boston Globe article, the proposal being put forth by the Mayor and the language he uses to describe it, is any of that sounding familiar? Follow the money, folks. These are the industry lobby groups and their unions using the Mayor of Boston as a ventriloquist dummy.