Outlaw hotels are a major problem in many cities

Taking homes, which should go to locals, and turning them into unregulated tourist accommodation robs locals of a place to live, pushes up house and rental prices, creates a host of nuisance, safety and other issues, and, by shifting business from a highly regulated and taxed market of legal hotels to a black market of outlaw hotels, reduces the tax base of local and national governments.

Fortunately, a lot of cities have tried to address these problems and some have succeeded. From these efforts, we can see the basic principles for stopping Airbnb while allowing people to share their own home.

Primary Residences Only

People should only be allowed to rent their own home. Renting secondary homes or investment properties should be illegal. The city’s housing supply should not be turned into hotel accommodation.

Registration Required

To make sure people follow the law, there needs to be a way to monitor short term rental activity. The only way to monitor it, across platforms, is to make hosts register with the town hall. This registration process should force potential hosts to prove that the property is their primary residence. Without the registration number, it should be illegal to rent put the property on Airbnb or any other platform.

Give neighbors a say 

Neighbors should be given a say on whether people can rent their apartments on home sharing websites. In many cities this is done by allowing building management organizations to ban short term rentals in their building rules. This allows the neighbors, who are heavily impacted by short term lets, to decide whether they want it in their building. 

Make Airbnb and the other home sharing platforms responsible

City governments are struggling. In most cases, they are facing cuts in central government funding, a shrinking tax base, and have a huge number of competing priorities. They cannot afford to spend huge amounts of money finding, fining and fighting outlaw hotels.

The platforms should take responsibility for stopping illegal activity taking place on their website.  

Make hosts and the platforms pay

Monitoring and managing the “home sharing” economy is expensive. To manage the home sharing industry, local governments have to hire teams people and spend money to stop outlaw hotels and mitigate their negative impacts. The platforms and hosts who benefit from this should contribute. Hosts should pay to register with the city, and platforms should pay for a license to operate. That way the cost of regulating an activity falls upon the people benefitting from it, rather than on the general public.

These five simple principles, adapted to local circumstances, can effectively stop people from turning homes into hotels without overburdening local governments or stopping real home sharing