AirBNB Pits Innovation vs Regulation in Revere

February 10, 2015
By

While Councillor John Powers was perusing his ward a few years ago, he got an interesting complaint: there were French people staying in a neighbor’s basement.

It wasn’t exactly the kind of concern one hears every day, and the explanation was stranger than the complaint. What he had discovered was the fruits of the Internet-based room sharing service called AirBNB.

Powers said he learned of it when a woman on Shawmut Street in Revere – just a stone’s throw from Revere Beach and the MBTA Blue Line – told him that there had been French tourists staying in a basement next door.

He was dumbfounded.

“It started off with three individuals from France,” he said. “They had rented a room at a house on Shawmut Street, but couldn’t get ahold of the [host]. They went to the neighbor and explained the situation in broken English. She didn’t know what to think about it, but she did find the owner and the French folks got their money refunded. Bottom line is that they had rented the room online – there were pictures and everything on the website – and it was in terrible shape. There was a bed, a night table and a lamp in a basement room. It really opened my eyes; I couldn’t believe what I was hearing.”

Later, he found out that there were many other such situations evolving in Revere – particularly near the Beach and the MBTA, which are only minutes from Logan Airport.

Now, he has some extreme reservations about AirBNB and other services – mostly because they’re skirting important local taxes and because many of the situations he’s seen violate critical fire codes.

“Probably the reason for going to the website is the rates are so cheap compared to hotels,” he said. “A night in a Boston hotel is in excess of $300 a night. Even in Revere, our hotels are around $200 a night. They were renting these rooms for $60 or $70 a night and it looked like a bargain. It’s in complete violation of our sanitary codes, our zoning codes and our fire codes – especially with a second means of egress…I think Code Enforcement in Revere and all over really needs to take a look at these. If they are up to code and they want to abide by the rules, there should be some sort of regulation or list or license so we know who is operating these and that people are staying there. It can’t just be like it is now.”

What Powers ran into that day was the quickly growing “shared economy” and it’s many facets of using the Internet to rent out, or share, possessions with folks willing to pay for their use. It’s something that AirBNB and the car-sharing service, Uber, have revolutionized.

SHARING EVERYTHING YOU OWN

AirBNB – and some other smaller services such as Craigslist – operates via the Internet and coordinates homeowners or apartment renters with guests from out of town who wish to rent a room for a few hours, for the night or a for few days. Typically, the rooms go for far less than a hotel and they’re largely still under the radar. In East Boston and Revere, such situations are popular with folks arriving late on an International flight or leaving early on an International flight.

In other locales, such as Charlestown and the North End, such rentals are popular because they are informal, close to all the City’s amenities and far cheaper than a hotel.

AirBNB told the newspaper late last year that it informs its ‘hosts’ about how to be responsible and follow all of the applicable laws. It also told the paper that bad experiences and neighbor troubles are rare compared with the hundreds of thousands of successful rentals worldwide.

“AirBNB hosts share their homes with visitors from around the world and use the money they earn to pay their bills and afford their rents or mortgages,” said Marie Aberger of AirBNB. “And AirBNB guests spend their time and money in neighborhoods that haven’t benefitted from tourism in the past. We ask all hosts to follow their local rules and regulations. At the same time, we are working with communities around the world to create clear, progressive and fair rules for home sharing. Every city is different, but places like Portland (Oregon), Amsterdam and France have enacted innovative policies and we look forward to working with more local leaders and building on these experiences going forward. Over 20 million total guests have had a safe, positive experience on AirBNB. Isolated anecdotes are rare, but if issues arise, we take them very seriously and have a dedicated team who work with our community to try and resolve them.”

Aberger said some of AirBNB’s safety protocols include a team of more than 80 agents (some former police officers) to review suspicious activity and respond; a $1 million host guarantee to promote peace of mind for hosts; verified ID to allow guests and hosts to verify identity by scanning official IDs or confirming personal details; and 24/7 customer support available in multiple languages worldwide.

The newspaper tried to contact a few of the local ‘hosts’ that could be positively identified via the Internet, but all said they didn’t want to speak to the media and would rather maintain their privacy.

A DYNAMIC NEW ECONOMY

AirBNB’s situation speaks to a larger story about how the emerging ‘shared economy’ has recently begun clashing with the reality of City living. In large part, the shared economy has operated under the radar and conveniently for those who are computer savvy and, in many instances, frequent travelers. It also speaks to a generational disconnect where young people that are more adept with technology and conditioned to understand how the idea of sharing everything via the Internet clash with more traditional residents who are, largely, an older crowd completely unaware of the speed-of-light economy blooming all around them.

Braden Golub is the CEO of SPOT, a parking spot sharing service that he started out of his home on the Revere/Malden City line. His company rents out unused private parking spots in Boston when they’re not in use – boasting 10,000 early SPOT adopters and $1 million in initial seed funding.

“The shared economy is definitely something that’s come up fast in the last two years,” he said. “It’s the idea that if you have an asset that you’re not using, you can make money on it as long as it’s in a safe and legal way…I think it’s still hard for a lot of people to understand that if they have something in their backyard or their basement they’re not using at the moment, they can reach out on any one of many Internet platforms and make money on that asset. They have sharing for boats; we do private parking spots; and there is even one for camping equipment.”

Golub said he got the idea for SPOT when moving his girlfriend’s car in the Back Bay every morning to avoid meter maids and street sweepers – noting the empty private spots in the alley.

“I saw the empty spots and thought that I would give a lot of money to put her car in those empty spots temporarily until the street cleaners came,” he said. “That’s where I got the idea about sharing parking spots via my App…However, AirBNB really revolutionized the idea. They’re sort of the extreme example of the shared economy because we’re talking about occupying a room in someone’s house, but I wouldn’t be talking about my business right now if they hadn’t come in and paved the way by sharing their experience with the masses.”

MAINTAINING SAFETY AND REGULATION

Golub said the most important thing about the shared economy is making sure that things are done safely and legally.

In his case, he sets a priority on making sure those renting out the spaces actually own them. He said keeping that confidence and assurance is key to any type of sharing service.

However, it’s not always the case.

AirBNB is much like the car-sharing service ‘Uber,’ and other sharing services coordinated through the Internet and operating far ahead of the typical regulatory, taxation and sanitary codes of state and local governments. With the quick advent of the shared economy and the light-speed at which life happens on the Internet, such situations arise with a Wild West mentality – saying ‘It’s legal until someone stops us.’

That is changing quickly though, as State Reps. RoseLee Vincent (D-Revere) and Aaron Michlewitz (D-North End) have broke through on the house-sharing service of AirBNB by filing a bill that will provide regulations in an environment that has grown exponentially for at least two years without any regulations whatsoever.

The bill would empower cities and towns to inspect potential short-term residential units for safety code violations, instruct state government to keep track of units being rented for ‘tourism and transiency use,’ and mandate that short-term renters pay an excise tax (similar to the state hotel tax).

“Many of our urban communities have seen a surge in short-term rental units, which is alarming because there are no laws regulating such housing,” said Vincent.  “What this legislation seeks to do is to make short-term rental units safe and allow for the owners of the properties to be held accountable for any impact the rentals may have on the community. For the health and safety of our residents, it is important that we regulate such housing.”

Added Michlewitz, “While short-term rental platforms are a testament to the innovative economy that has thrived in Massachusetts, we want to ensure that they are safe and secure places that work within the rules and regulations that the hospitality industry already operate under…Banning short-term rentals was a path we did not want to go down. We want the innovative economy to prosper in the Commonwealth, not be stifled, but we also want consumers to feel confident and safe when they are using these sites. I think we struck the right balance with this bill.”

East Boston and Charlestown City Councilor Sal LaMattina has taken a lead on the local situation. Already, LaMattina has held the first of what looks to be several public hearings on the matter.

“The Council is worried that home sharing services like AirBNB, Away and Flipkey are taking the way from the rental stock and many landlords find the services more attractive than long-term leases or rental agreements,” he said. “I have concerns when people are buying housing and renting out to these companies that are charging almost $300 a night in some cases. That’s a lot of money. It’s taking away from our rental stock. It’s a multi-billion dollar industry that we need to start regulating. It’s not that I want to squash home sharing businesses, but I want to know where they are and regulate them. It’s important that the city knows where they are and how many of them there are for safety reasons.”

Case in point:  In Eastie last fall Charlie Livingston was going about a normal workday when he suddenly got a shocking call from his neighbor.

“There’s some guys in your backyard with suitcases looking around and speaking what I think is German,” the neighbor told him.

“It was about 2:35 p.m. and my neighbor called and he’s telling me these guys have opened the gate, which is about six feet tall and can’t be opened from the outside,” Livingston said. “He told me they were in the back of my house and they had suitcases. He didn’t know what they were doing there; I didn’t know what they were doing there. I called the Boston Police and they were there in 10 minutes. The officers questioned the two guys and the guys told police that they were supposed to be renting the apartment next door for the night from this particular guy. They had come straight from the airport to the house. I guess they had rented it on the Internet. It was the first I ever heard of it. I looked into it and there are tons of these rooms for rent all over East Boston, Revere and elsewhere. At the time this happened, no one knew about these things and they weren’t regulated, inspected or paying taxes. It’s totally outrageous.”

BRAINSTORMING A SOLUTION

Back in Revere, that City’s Inspectional Services Department (ISD) has begun thinking out loud about what can be done.

Director Nick Catinazzo said he has observed what he believes to be clear violations just on the photos posted of Revere rooms for rent on the AirBNB website.

“I think we should really do something about it quickly and we’ve been brainstorming here with our staff,” he said. “The state legislation is a good idea. Maybe we need to put something before the City Council and maybe our City Solicitor should look at the legality of this. Are they rooming houses? I’d like to know what the AG is thinking also because there is the issue of hotel room excise taxes that aren’t being collected and that directly benefit the City. We have to sit down and think hard about this because it really seems crazy from my perspective.”

Livingston would agree.

“It’s kind of scary,” he concluded. “I think they’re illegal and we should get rid of all of them. What we’ve got going here is a bunch of hostels that no one is living at. People will eventually just buy houses around here and rent them out on this service. It’s deplorable and it’s going to hurt the neighborhood so these people can make more money.”

AirBNB has seen a variety of reactions across the country – much like other sharing concerns. In Quincy and New York State, local ordinance or state law has banned the service.

However, in San Francisco and Portland (OR), those areas have passed legislation much like the above bill to regulate rather than eliminate the shared housing.

“Technology is what’s really accelerated this and brought it all together,” Golub said. “If we don’t have the Internet, no one would be doing this…Any time you’re dealing with a new idea or something that draws from an existing industry – like Uber with taxis or AirBNB with hotels – you’re going to deal with a lot of unhappy people and a lot of happy people. What we’re seeing now is an effort to try to balance both sides and that’s very interesting.”

 

  • drensber

    I’m sure John Powers and his cohorts will continue to work hard to make Revere as tacky and dumpy as possible, thus limiting its appeal as a “sharing economy” destination.

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