Airbnb critics join in Sen. Elizabeth Warren's call for transparent data

Leaders from more than a dozen American cities have urged the Federal Trade Commission to quantify how much of the short-term rental market is actually commercial business.

First Look

As soaring demand has sent rents skyward across many urban centers in the United States, city leaders have tried to identify problems and find affordable housing solutions for working class and poor residents. More than 40 of these local leaders said Thursday that they suspect Airbnb and similar short-term rental services could be, in part, to blame.

In a letter to Federal Trade Commission Chairwoman Edith Ramirez, representatives from more than a dozen American cities, including the nation's most expensive rental markets – from New York City and Boston to San Francisco, Oakland, and San Jose – called for greater transparency about the "sharing economy" company's effect on surrounding communities.

The letter argues that local authorities need reliable data from Airbnb, VRBO, HomeAway, and FlipKey to distinguish users who merely rent out their own homes for short periods of time from those who run multi-property commercial enterprises that could be flouting additional rules and regulations.

"Permitting or encouraging commercial operating would stand in start contrast to the public image of home sharing presented by the industry," the letter states.

Whether home-sharing services share in the blame or not, it is clear that rising rental prices take a toll on certain communities, as The Christian Science Monitor's Jessica Mendoza reported in April:

As housing costs push the working and middle classes out of cities or into poverty, urban areas risk losing the diversity that make them so captivating in the first place.

Already San Francisco and Boston – which rank among the richest cities in America because of their concentration of high-tech, health-care, and other industries – have become places of stark inequality. In 2014, Boston’s wealthiest residents made nearly 18 times what its poorest workers earned – the biggest income gap of any city in the nation – while San Francisco’s richest outearned its poorest by a factor of 14.5, according to the Brookings Institution, a policy research center in Washington, D.C.

And this inequality trickles down with negative impacts on individual residents, too:

Frequent moving and overcrowded homes have been shown to negatively affect children’s performance in school. The stress of looking for new housing, facing foreclosure or eviction, and enduring long commutes has also been linked to health disorders.

“All of it – the uncertainty and stress of where to live, of how to make ends meet, pay utilities, put food on the table – these are devastating choices people have to make,” says Amie Fishman, executive director of the San Francisco-based Non-Profit Housing Association of Northern California. For those who get evicted or priced out of a neighborhood, she says, “you lose not just your home but your network, your support systems, the predictability of your life.”

The city leaders acknowledged in their FTC letter that policies need to evolve in the face of evolving industries, but they noted that the balancing act of competing interests must include consumer protections and affordable long-term housing considerations as well.

"Our cities are working to develop and implement policies that allow residents to legally use short-term rental platforms, and also safeguard scarce affordable rental housing by preventing illegal commercial operations," the letter adds.

The message echoed a similar July letter to the FTC from three Democratic US senators: Elizabeth Warren of Massachusetts, Dianne Feinstein of California, and Brian Schatz of Hawaii.

Citing a report from the New York Attorney General's Office, the senators wrote that 72 percent of the units available via Airbnb in New York City appeared to violate state and local law.

"In order to assess ... the use and impact of the short-term rental market, we need reliable data on the commercial use of online platforms," the senators wrote. "We believe the FTC is best positioned to address this data gap in an unbiased manner and we urge the Commission to conduct a review or commercial operators on short-term rental platforms."

In a statement, Airbnb said the company has "participated in meetings with the FTC and discussed how Airbnb fights hotel price gouging and are eager to work with lawmakers and regulators at any level of government who want to learn more about how home sharing helps the middle class," as The Guardian reported.

The company noted, furthermore, that Airbnb hosts keep 97 percent of the proceeds from their listings, adding that many of them "depend on this extra income to help make ends meet."