When travelers rent out a home or apartment for a few days or several months, it might feel like a folksy alternative to a traditional hotel, but don’t be fooled. The truth is that Airbnb-type short-term rentals are big business, where real estate investors make huge profits with supercharged rents, while vulnerable families and seniors are driven out of their homes.
That’s why the law Massachusetts recently passed regulating Airbnb is such an important first step in ensuring families aren’t unfairly displaced. And robust enforcement will be crucial to the law’s success.
One of the key goals of the new law is to overcome the havoc that Airbnb has wreaked on families, communities and the housing market. Boston residents already face a housing crisis, and Airbnb’s model throws fuel on the fire. The problem is two-fold: First, good homes are taken off the market and operated instead as illegal hotels at a premium price. That leads to fewer homes for a growing number of families, and to fiercer competition — and higher costs — for what is left. And as rents continue to soar, so, too, do illegal displacements and evictions, especially among working-class communities of color.
Now, if you’re thinking that Airbnb is a quaint platform for people to share their homes with travelers and make new friends, think again. The truth is, the greatest profits come from “commercial” properties — entire homes or apartments rented out for much of the year by a landlord or real-estate investor. Those investors use sophisticated data to maximize the returns on a portfolio of properties. That’s not a “sharing” economy — that’s a corporate juggernaut mining local housing for profit, regardless of the impact it has on the communities already living there.
These profit-driven commercial rentals, where Airbnb seeks to grow its business, are squeezing housing markets and pushing up rents. Researchers from UCLA, USC, and MIT found that the more of these commercial rentals a city contains, the more its housing prices are impacted. Rental housing costs in Greater Boston are already the third-highest in the country. Only New York and San Francisco have higher rents, and both of those cities have taken steps to regulate Airbnb and other short-term rental platforms too.
One of the most important provisions of the new Massachusetts law requires every rental host to register with the state, bringing much needed transparency to a previously opaque system. Housing, community, and workers’ rights advocates pushed hard for the registry, which is essential for regulating and ensuring enforcement of the multibillion-dollar industry. The new law will also ensure that short-term rentals are taxed just like hotels. And it exempts people who rent their homes for less than two weeks per year, to ensure small, local home-sharers aren’t unduly burdened.
Not surprisingly, Airbnb is threatening litigation, claiming the law is unnecessarily complex. Which begs the question: Why doesn’t Airbnb simply help its hosts understand the new law, rather than spend millions on a costly lawsuit? The answer, of course, is that in reality, the mega-company objects to any efforts that could hinder its explosive growth, even if it means saving the communities we’ve lived in and built for generations.
In the coming months, it’s imperative that state regulators stand strong in the face of Airbnb’s threats, and ensure that every short-term rental establishment is registered, as required. They also need to be sure that every property is adhering to existing safety standards and building codes, and providing good jobs for the people who work to clean, schedule and otherwise make the rentals a viable business.
And that’s not all.
Beyond enforcement of the existing law, more must be done to protect and expand tenants’ rights in the face of increasingly well-financed, predatory speculators, who’ll stop at nothing to push out existing families to make way for ever greater returns on our homes and communities. Now that Massachusetts has passed the Airbnb bill, it’s crucial that it’s effectively enforced, and that more steps are taken to keep families in their homes.
Karen Chen is executive director of the Chinese Progressive Association, and Darlene Lombos is executive director of Community Labor United and vice president of the Greater Boston Labor Council.