Airbnb: Bumps in 'sharing' economy. How one town – Malibu – is navigating them

Communities are trying to figure out the right balance between proponents of entities like Airbnb and Uber, and those who have pushed back hard against such enterprises. Malibu, Calif., has turned to subpoenas.

The global rise in the past two years of the “sharing economy” – using Airbnb and other websites to rent a room or get a ride – has had its share of pushback. Regulated hotels and licensed repair shops have seen an unlevel playing field, communities have complained of lost tax revenue, and residents haven’t appreciated a cavalcade of strangers living in their neighbors’ homes.

Communities and other groups have been trying to figure out the right balance between those who are ardent proponents of entities like Uber and YourMechanic, and those on the pushback side.

One community in the thick of the fray is Malibu, Calif., the upscale town that hugs the Pacific coast and attracts surfers and celebrities – and tourists. The community has been getting an increasing number of complaints about people who have turned their homes into hotels, renting them out all the time.

Last month, Malibu voted to authorize subpoenas to room and home rental websites – to learn how many short-term rentals are being offered and to make sure the city is getting the same 12 percent transient occupancy tax that it requires of hotels.

Some see Malibu’s approach as indicative of a middle way – allowing “sharing economy” businesses to continue, but ensuring they abide by regulations.

“More and more government entities are seeing the wisdom of the adage, if you can’t beat ’em, join ’em,” says Mario Jaramillo of Rocket Lawyer, an online legal collaborative. “If they choose to ban these entities, then they are putting limits on the free economy and are liable to more expensive lawsuits. But regulation is a win-win for everyone: At the same time they are providing ...[assurances of transparency and safety], the taxing authorities are getting much-needed tax revenue and fees.”

Some of the problems that have arisen in the sharing economy are also being addressed at the state level. Currently, a bill dealing with insurance requirements for ride-sharing companies is wending its way through the California Legislature.

Assembly Bill 2293 has already been approved by the California Assembly on a 71-to-0 vote, and on Tuesday, it passed the Senate Energy, Utilities and Communications Committee, 7 to 0.

Malibu approved the subpoena power for two reasons: to quell criticism from neighbors who are annoyed by the steady stream of travelers and to ensure it has funds for street maintenance, trash pickup, and police.

“The main purpose of this is to be able to control and make sure that people who rent out their homes are not adversely affecting our neighborhoods,” says Laura Rosenthal, Malibu council member. “These two- to three-night visitors often don't care about the neighborhood and block other driveways, have loud parties, and generally become a neighborhood nuisance.”

She adds, “We want to make sure that everyone who does this is registered with the city so if/when there is a complaint, we know who to contact.”

Airbnb, for one, has appeared willing to consider the issues.

"We believe home-sharing can make cities better places to live, work and visit and we want to work with cities to address their concerns,” says Nick Papas, spokesman for Airbnb, in an e-mail. “We've already launched a plan to collect and remit taxes in San Francisco and Portland."

Malibu-based composer Richard Gibbs is in complete agreement with the city’s move.

“People wrongly think that Malibu is a rich town because so many rich people live here,” he says. “The city needs this income, and they have every right to it. You can’t pick your neighbors, so I say those who are bothered by [strangers next door] just need to realize times have changed.”

Mr. Jaramillo of Rocket Lawyer does voice one concern, regarding how the tax revenue collected is used.

“The idea of having subpoena power to check out these websites comes with one caveat in my mind,” he says. “I’d like to know the tax revenue the city is after is really going to the task of making the residents feel safer and not some completely unrelated expense – in which case, people should not be in favor of it.”

Some experts take a broader view of how a residential area could be affected by an influx of travelers.

"For Malibu or other neighborhoods part of what maintains prices is the uniformity of neighborhoods,” says Ron Throupe, associate professor in the Franklin L. Burns School of Real Estate and Construction Management at the University of Denver. “Neighborhoods that move to a decline stage of a neighborhood lifecycle tend to no longer have the same economic class of residence and the residences may transition to renters,” says the professor, who made his comments via e-mail.

“Not that Malibu will go into decline, but this type of activity does diminish the reasons for being in Malibu and the desirability of the neighborhood.”