It's interesting to see Sen. Warren casting doubt on a company valued at $30 billion that claims it helps its hosts address economic inequality. Transparency about the data would help answer so many of these question.
Three U.S. senators asked the Federal Trade Commission to investigate the impact of Airbnb Inc. and other home-rental websites on housing markets, attempting to elevate local regulatory battles to the federal level.
Senators Dianne Feinstein of California, Brian Schatz of Hawaii and Elizabeth Warren of Massachusetts wrote a letter to FTC Chairwoman Edith Ramirez requesting the agency “study and quantify” the prevalence of commercial renters using Airbnb, HomeAway Inc., VRBO and other short-term rental services. The letter said activity on those sites can result in housing shortages and drive up prices.
As one of the most visible proponents of the sharing economy, Airbnb has been dogged by questions about who is listing homes on its site. The company has booked 100 million guest nights and became a Silicon Valley darling in the process. Airbnb has been seeking investors for a round of financing that would value it at $30 billion, a person familiar with the matter said last month.
While many people use Airbnb to list rooms or entire homes for short periods to supplement their income, some hosts are companies or full-time landlords renting out multiple residences year-round. Local regulators have long sought more information about the number of renters who are running the equivalent of illegal hotels, and the company has shared data with some cities.
“The vast majority of our hosts in Massachusetts, California, Hawaii and across the county are middle class people who depend on home sharing as a way to address economic inequality,” Chris Lehane, a spokesman for Airbnb, wrote in an e-mail. “We welcome any opportunity to work with lawmakers and regulators who want to learn more about how home sharing helps the middle class address the issue of economic inequality.”
Betsy Lordan, a spokeswoman for the FTC, declined to comment.
Housing-constrained cities, such as San Francisco and New York, have put pressure on Airbnb to boot hosts from its platform who aren’t listing their primary residences. Airbnb has taken steps to appease cities by, for example, urging customers to comply with local rules. But officials in both cities have said the company’s efforts are insufficient. San Francisco recently passed legislation requiring Airbnb to police who uses its site or face fines. Airbnb sued its home city in response, prompting the board of supervisors to revisit the issue.
In the senators’ letter, they question the reliability of data provided by home-rental companies. They also call attention to recent criticisms about racism among Airbnb hosts and short-term rental companies’ inconsistent approaches to taxes.
©2016 Bloomberg L.P.
This article was written by Eric Newcomer from Bloomberg and was legally licensed through the NewsCred publisher network.
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Photo credit: Sen. Elizabeth Warren (D-MA), along with two other senators, is asking the FTC to look into the impact of short-term rentals on housing in major U.S. cities. Evan Vucci / Associated Press