Wednesday, 29 July 2015

Airbnb: tourists, local residents and the sharing economy

A couple of years ago, Berlin put a stop to letting out holiday flats on a grand scale:
Rental ban to end Berlin’s reign as holiday lets capital - Europe - World - The Independent
End of the holiday rental? Berlin and Paris look to follow New York in banning short self-catering stays | Daily Mail Online

Of course, not everyone was happy:
Laws to stop vacation rentals – a bad idea! | The Berlin Outsider
Berlin to ban "repurposing" of living space - Berlin news - Toytown Germany

Meanwhile in Barcelona, things have been getting rather heated:


Barcelona residents are fending off a barrage of drunken, obnoxious tourists

Maria Sanchez Diez 29 July 2015

The nautical charm of Barcelona is enough to tempt even the most discerning traveler, but the signs instructing visitors to leave are becoming harder to ignore.

Elegant coastal cities like Barcelona tend to rely heavily on tourist revenues. But the exponential boom in tourists to Barcelona—yearly tourists have more than tripled from 1.7 million in 1990 to an expected7.5 million in 2015—is straining its capacity to keep up. So incensed are the city’s residents that a recent city government poll of some 800 people found that they consider tourism a worse problem than poverty. Only unemployment and traffic ranked higher on their list of grievances.

“The center no longer belongs to us,” Manuel Delgado, an urban sociologist at Barcelona University, tells Quartz. “This has become a theme park.”

Among their many grievances, residents complain that they are being priced out by the proliferation of rental apartments for tourists, aggravated by the rise of online services like Airbnb. Last year, thanks largely to rising foreign demand, home prices in the city rose 3.5% and rental prices rose 11%, compared to a 5% decline in home prices and 2.6% rise in rental prices in Spain overall, according to a report (link in Spanish) by Spanish classifieds website Idealista.

Overcrowding of treasured local spots, especially in scenic areas like the seaside neighborhood of La Barceloneta, have raised tensions between tourists and locals. Tourists flocking to the working-class neighborhood have been accused of corrupting local culture with excessive noise, vulgarity, and heavy drinking.

Waves of anti-tourism protests have persisted since last year, after three Italian tourists sparked outrage for running naked through the neighborhood’s streets.

There have been efforts to fight back. The city’s new leftist mayor, Ada Colau, announced on July 2 that licenses for hotels and other touristic accommodations would be frozen for a year. Her goal: to avoidbecoming Europe’s next Venice, a city where tourists now outnumberthe declining local population.

The picturesque market of La Boquería was closed to tourist groups in April after locals complained that it had become too crowded to actually shop there.

La Boquería Market had to ban tourist groups.(Reuters/Gustau Nacarino)

In the past two years, public monuments that were once free, like Gaudi’s Park Guell and the Montjuic castle, have added entrance fees, partly to capitalize on the influx of tourists but also to recoup the costs associated with heavy wear and tear. Residents from the nearby areas can still enter for free.

More large cruise lines have also taken to Barcelona’s shores in recent years, crowding its beaches and raising concerns about toxic pollution in the water.

Barceloneta beach: overcrowded and dirty.(AP/Manu Fernandez)

Last year, filmmaker Eduardo Chibás Fernández’s documentary, Bye, bye Barcelona, which voices the grievances of local residents about the city’s unbearable tourism boom, became a cult hit.

Bye Bye Barcelona (Full length) - YouTube
Barcelona residents are fending off a barrage of drunken, obnoxious tourists - Quartz

Which is what has happened in Venice:
The death of Venice: Corrupt officials, mass tourism and soaring property prices have stifled life in the city - Europe - World - The Independent

The heat is being turned up on the accommodation-sharing service Airbnb:
Holiday Rentals, Homes, Apartments & Accommodation - Airbnb
Airbnb - Wikipedia, the free encyclopedia

On the West Coast:

Wrong way on Airbnb

Activists, including labor groups and local residents, protest across the street from Globe Homes and Condos, which they say rents out dozens of local homes as vacation rentals through Airbnb. (Los Angeles Times)

Caught off guard by the surging popularity of the “sharing economy,” governments have struggled in recent years to adapt the rules they developed for taxi and limousine services to ride-sharing outfits such as Uber and Lyft. Now a new front is opening in the regulatory battle, as the state Legislature and numerous cities train their sights on room-sharing services such as Airbnb and Vacation Rentals by Owner. Arguing that local governments don't have the resources to stop illegal short-term rentals, proposals in the Legislature and a handful of cities around the state would require Airbnb and its rivals to become de facto code enforcers. There's a role for room-sharing services to play in helping cities manage the problems posed by short-term rentals, but that's not it.

A good example is what's happening in Santa Monica. The city's zoning ordinance bars short-term rentals in residential areas, but the city isn't enforcing the widely flouted ban. Instead, it has tentatively approved a new ordinance that would allow a dwelling to be rented out only when the primary resident obtains a license and remains on the premises while the renter is there.

The advertisers on Airbnb are in violation of the city zoning codes. Single-family residential districts do not permit more than 1 dwelling unit on a lot. The property owners are further using their properties for commercial purposes--a motel. Many of those owners are likely not buying business...

That's one way to deter landlords from depriving the city of much-needed permanent housing by converting apartments into unregulated hotels. Where the proposal goes off the rails, though, is in requiring the room-sharing companies to regularly report to city officials who's listing properties at what addresses, along with the number of days each property has been rented out and the price paid. That would set a dangerous precedent for forcing private companies to monitor the behavior of their customers on behalf of the government. If it's good for Airbnb, why not require automakers to have their cars generate reports for the police whenever they're driven faster than 70 mph in California, the highest possible legal speed? Or require contractors to alert the city when they're asked to build an addition
that's too large?

Wrong way on Airbnb - LA Times

Back to Berlin and Paris:

Europe cracks down on Airbnb, other room-sharing sites

Elena Berton and Katharina Wecker, Special for USA TODAY July 7, 2015

(Photo: Kenzo Tribouillard, AFP/Getty Images)

PARIS — As the summer tourist season heats up in Europe, officials are cracking down on Airbnb and other online room-sharing services.

While popular tourist destinations like London and Amsterdam have embraced room-sharing, other European cities like Paris and Berlin are moving to stop out-of-towners from overrunning neighborhoods and displacing local residents.

In Paris, government inspectors are enforcing a ban on short-term stays in investment properties booked through San Francisco-based Airbnb and similar websites. "If Parisians want to rent out their home when they go on holiday, that is not really a problem," said Ian Brossat, Paris' deputy mayor in charge of housing. "What concerns us is when someone purchases one or more properties with the aim to turn them into tourist rentals. We don't have enough properties to house Parisians."

In hip and artsy Berlin, property owners and renters seeking to sublet online must register with the city before advertising their homes. Proponents say the rule prevents a frat-house atmosphere in the German capital's streets. "Tourists and residents have different schedules. Travelers often arrive late and party in their accommodations," said Joachim Oellerich, chairman of the Berlin Tenant Community, a local civic organization. "Residents complain about noisy tourists who litter in the hallways and don't know how to recycle."

Paris and Berlin are at the forefront of efforts to rein in room-sharing in Europe. But they're not alone. Last year, Barcelona fined Airbnb $41,000 for illegally renting out rooms in private residences because the homes weren't registered with Spain's Catalonia region tourism registry. The city has since established an office to regulate short-term rentals. In Italy, the hotel industry has called for a crackdown on room-sharing.

The European measures often anger homeowners who believe they have a right to rent out their properties. "It's nonsense because commercial hosts on Airbnb are only a minority," said Sebastian Olényi, a Berliner who rents out his flat when he's away on vacation. "I only had good experiences so far. My guests are often relatives who visit their families in Berlin, or business people who are in town for conferences," he added. "Partying tourists are the exception."

In France, homeowners are free to rent out their primary residence for up to four months per year. But under a Parisian law enacted in 2011, people who want to rent out an investment property must own an equivalent property with a long-term tenant. Fines for breaking the rule can exceed $28,000.

In May, French inspectors scoured room-sharing sites such as Airbnb, Homelidays and LeBonCoin and found at least 100 illegal short-term rentals among 2,000 properties they examined. Last year, Paris imposed fines totaling $644,000 on 56 such properties. The City of Light is Airbnb's most popular destination, with 40,000 listings — 8,000 more than New York. Still, the website said it doesn't oppose the law. "Around 83% of our listings in Paris are main residences, so this crackdown does not really concern us," Airbnb France spokeswoman Philippine Nouveau said.

Berlin passed a law last year requiring all short-term vacation rentals to be registered with authorities, with one-time fees to register the property that can run higher than $250. As in Paris, the Berlin government says the rule doesn't restrict the sharing economy and affects only people who rent out investment properties. "The aim of the law is to turn holiday apartments into regular housing to alleviate the housing shortage, especially in popular districts," said Torsten Kuehne, a district councilor for Prenzlauer Berg, a trendy tourist spot.

Berlin inspectors regularly check room-sharing sites to make sure no one is violating the rule. Residents are eager to help. In the first seven months after the ban's introduction, neighbors notified authorities of about 700 potentially illegal rentals, Kuehne said.

However, Bernhard Holzer, spokesman for Wimdu, a Berlin-based vacation rental website, doubts the law will have a significant impact on the problem. "There are only 9,000 flats out of 2 million homes in Berlin that are used as holiday apartments," he said. "Berlin needs 140,000 new flats to meet demand. It would be better to create more housing instead of slowing down the emerging sharing economy."

Airbnb spokesman Peter Huntingford said over-regulating room sharing doesn't address the underlying problem — a shortage of housing — that has prompted criticism of the industry. If cities like Berlin would build more housing, people would be less inclined to criticize Airbnb and other room-sharing services, he said. "We are still having discussions with various people in Berlin to try and move conversations forward and to see how we can support people," Huntingford said.

Wecker reported from Berlin

Europe cracks down on Airbnb, other room-sharing sites

There are concerns in Devon:
Tourism bookings 'good' but West still feeling 'Gove effect' | Western Morning News

But Airbnb clearly has its attractions:
Exeter's homeowners who let strangers stay in their home | Exeter Express and Echo

This is all part of the 'sharing economy':

Facebook, Airbnb, Uber, and the unstoppable rise of the content non-generators

One creates no content, one owns no property, the other owns no cars. The property is at the interface
HAMISH MCRAE Tuesday 05 May 2015

The world’s largest taxi firm, Uber, owns no cars. The world’s most popular media company, Facebook, creates no content. The world’s most valuable retailer, Alibaba, carries no stock. And the world’s largest accommodation provider, Airbnb, owns no property. Something big is going on.

These are not original observations, for this was spotted a few weeks ago by Tom Goodwin, an executive at the French media group Havas, and has been doing the rounds since. His key point must be right: that companies that control the interface between the consumer and the provider of the goods or services are in an incredibly valuable position. They carry none of the costs of providing the service but take a cut from the millions of consumers that buy from them. The interface is where the profit is.

But business relationships do not stay stable, particularly if there are huge profits involved. So now we would see the battle of the existing interfaces, with each extending beyond their initial footprint to try to win more territory. So Facebook goes into news, Twitter into television and so on. And because they can be so profitable we will see more and more challenger interfaces, each trying to find some way to get their icon on to your mobile phone or iPad.

As a business and industrial story this is fascinating, for the speed at which these companies have grown has been equalled only by the early car companies. It took five years from the incorporation of the Ford Motor Company in 1903 to the launch of the Model T in 1908, and another five to the introduction of the moving production line in 1913. Uber was founded in 2009 but launched its New York service only four years ago and its London one three years ago in July 2012. Airbnb was founded in 2008 in San Francisco and came to London in 2011.

If it is a fascinating business story it is also an encouraging economic one. The only way our economy, or indeed any developed economy, is going to get richer is by becoming more efficient. What these technologies do is to enable existing infrastructure to be used more efficiently. So Uber drivers, usually recruited from mini-cab firms, find they are paid less than they were previously paid per journey, but spend much less time waiting for jobs so their overall earnings are higher. Airbnb uses spare rooms that were previously unlet, so the housing stock is used more intensively. Google Maps enables us to find faster routes and avoid motorway jams, thereby using the road system more efficiently.

I personally find Google News the best way to check on running stories, even if it is frustrating that a search engine that does not develop its own news is more trusted than those of us who do the work. It leads to a huge saving in time. True, this does not always work: I was hunting for the latest insight on Greek debt negotiations the other day and spotted a really promising headline at the top of the list. It turned out to be the piece I had written the day before. But while I did not learn anything new, I was glad to see it there and grateful that it was thus elevated. The interfaces may at some level be parasitic in the sense that they live off other people’s work, as happened here. But we are willing partners in that transaction.

All this is so new that economists are scrambling to measure the impact of the interfaces. For example I cannot find a study estimating the saving in time and fuel brought about by Google Maps and the associated real-time traffic information. Yet that mapping system is 10 years old. We also know that logistics companies have developed extremely sophisticated systems for sending their drivers optimal routings. So what hope is there to assess the efficiency gain from Uber, acknowledging too the social and economic cost in terms of pressure on mini-cab firms and black-cab drivers?

Similarly, there has been a lot of speculation about the economic effects of Airbnb, with some people worried that if people can let their property short-term that might dissuade them from renting long-term, thereby reducing the supply of rented property. Intuitively that cannot be right, because if space is used more intensely, and some people rent out rooms who would not have previously done so, that must reduce pressure on accommodation, not increase it. But it would be nice to see some solid economic work on this.

The further point that has gone largely unexplored is the extent to which the interfaces improve the quality of our lives. Because we can check reviews when booking into a restaurant or a theatre, we have fewer bad meals or plays we walk out on at the interval. That is easy to see. It is harder to put a value on the way in which Facebook supports friendships and families, or perhaps occasionally the reverse. It is harder still – because I suspect it has not really happened yet – to see how social media will improve the quality of public services by putting pressure on them to perform better.

But you see the big point here. We have a set of new technologies, or rather new applications of existing technology, that have over the past five years radically improved the efficiency of some industries. That has brought massive rewards to the founders of the businesses that brought these to the global economy. However we are still in the very early stages of learning what we can do. We are, I suppose, where Henry Ford was around 1910, when he had got the Model T, but had yet to hit on the moving production line. The difference is that the benefits are more widely spread – a huge potential range of services, not just one product – and can be applied to the public sector as well as the private.

Facebook, Airbnb, Uber, and the unstoppable rise of the content non-generators - Hamish McRae - Business Comment - The Independent
'Sharing economy' won't become widespread because people crave their own material goods, says study - Science - News - The Independent

Another way to 'discourage' holiday rentals is taxation:
Futures Forum: France: taxing second homes
Futures Forum: Devon: taxing second homes
Futures Forum: East Devon: taxing second homes

See also:
Futures Forum: Uber and the sharing economy
Futures Forum: Is Uber really part of the 'sharing economy'? >>> "The whole point of a genuine p2p and sharing economy is empowerment for those directly participating in it."
Futures Forum: "It is only a matter of time before Uber arrives in Exeter."
Futures Forum: The sharing economy >>> “A lot of people want to do the right thing but they are struggling because the systems and culture aren’t right. Companies and governments have got a big role to play in doing that.”


spacant said...

I could often wondered if this would be a worthwhile side job on an empty block of time and after speaking to many drivers in US and EU markets, here is what I've gathered.

Jeremy Woodward said...

Thanks for the comment.
This is a controversial area - and it could be a nice side job as you say, using up spare/unused capacity.
Personally, I'm not sure if we're not simply seeing the state-sanctioned monopoly of taxi-medallions being replaced by a new private monopoly which will not tolerate competition.