IMPACT

Airbnb Is Accused Of Destroying Cities. This Company Says It's The Ethical Alternative.

Italy-based Fairbnb intends to invest half its profits back into the community.
Amsterdam has seen protests about housing affordability in the city. Protestors levelled some of the blame at Airbnb saying h
Amsterdam has seen protests about housing affordability in the city. Protestors levelled some of the blame at Airbnb saying homes are being bought specifically to be used for short term rentals on the platform.

AMSTERDAM – “Stop the eviction of Amsterdam!” That was the message on a poster blocking the street as protesters marched through the Dutch capital in December against a city they said had “sold out” to tourism, Airbnb and the forces of gentrification. 

Amsterdam is just one city where growth in Airbnb rentals has been accused of turning many homes into cash-raising assets rather than places to live. In New Orleans, the sharing economy has been accused of increasing social division, while in Barcelona, where surging tourism has been encouraged in part by platforms like Airbnb, street graffiti shouts, “Tourists go home, refugees welcome.”

And cities are acting. Amsterdam, for example, has capped the number of nights Airbnb-style hosts can rent out their apartments to 30 (from 60). In Barcelona, hosts must register with the city, and the government has stopped issuing new licenses. And in New York City, it’s illegal for entire apartments to be rented out for less than 30 days.

Sito Veracruz, a one-time Airbnb host who lives in Amsterdam, believes there are clear positives that can come from short-term rentals – putting money into the pockets of local people and letting tourists experience new communities. But he thinks there is a better way.

Veracruz is one of the people behind a platform called Fairbnb, headquartered in Italy, which pitches itself as a more socially responsible version of holiday-rental platforms like Airbnb and aims to ensure amateur tourism benefits entire neighborhoods. 

“I saw both sides of the coin, the negatives but also the good impact for hosts and guests when we had a room on Airbnb,” said Veracruz, a former urban planner.

Posters in Amsterdam saying "I don’t want monoculture." Protestors have criticized the "commmercialization" of the city
Posters in Amsterdam saying "I don’t want monoculture." Protestors have criticized the "commmercialization" of the city, which they blame on factors including tourism, Aribnb, gentrification and the sale of public housing stock.

Fairbnb is launching a pilot in five European cities in April – Amsterdam, Venice and Bologna in Italy, and Valencia and Barcelona in Spain. The company pledges to give half its profits to local projects, such as housing for neighborhood associations, nonprofit food cooperatives or community gardens.

Veracruz said members of the community, as well as travelers, would be involved in suggesting which causes to support. He added that this investment policy would not make it more expensive than Airbnb, as the company will take the hit rather than passing these costs onto renters or hosts. 

The company also promises to share data with regulators to help enforce local rules, and ensure each host rents out only one home. This might not eliminate some of the issues that annoy neighbors of Airbnb guests, such as noise. But it would stop people from posting multiple houses where they don’t live and don’t have to face the neighbors the next day.

“I totally understand the need to have proper regulation and accountable hosts and platforms,” said Veracruz. “Vacation rental platforms have made a real revolution in the way we travel, and we totally believe this has a lot of positive aspects. But we are all realizing that the impacts of these platforms are also visible in our cities.”

A banner in Barcelona, Spain. The city has seen protests over hyper-tourism. 
A banner in Barcelona, Spain. The city has seen protests over hyper-tourism. 

The idea of community investment also appeals to those outside the main tourist hotspots. Manuel Trindade Correia Marques has signed up to be a Fairbnb host at his father’s farm in Ribeiradio, an inland Portuguese village, currently rented through his website and online agencies. “The area has lost a lot of people in the last 20 years, and there are so many empty houses that if someone wants to live there, they can pick any one!” said Marques.

“All the development [in Portugal] is going to the coast and the villages. Cities and towns inland are losing people, investment, activity, everything,” Marques said. “By financing local initiatives, you are giving back to and strengthening the community.”

For Veracruz, the idea with Fairbnb is to democratize and lessen commercialization of short-term holiday rentals, which are unlikely to go away, even if concerns are rising across the world.

These same ideals were pretty much the original aims of Airbnb, launched in 2008 with the tagline “forget hotels.” The idea, summed up in an email from co-founder Joe Gebbia to his then-roommate, Airbnb co-founder Brian Chesky, was “a way to make a few bucks – turning our place into ‘designers bed and breakfast’ – offering young designers to come into town a place to crash.”

But now, Airbnb is facing heavy criticism ― which it rejects ― for its impact on cities.

Analyses point to short-term Airbnb rentals becoming increasingly professionalized, generating high profits for a few landlords – but also taking housing stock away from residential use and contributing to price rises that adversely affect locals in places from Palma de Mallorca in Spain’s Balearic Islands to Venice, Italy.

A McGill University report on Airbnb activity in New York from 2014 to 2017, published in January 2018, found that people Airbnb-ing their houses removed up to 13,500 homes from the long-term rental market in the city, increasing median long-term rents by 1.4 percent. And despite Airbnb’s label as a sharing economy company – one that aims to let ordinary people share their assets – the report said commercial operators with multiple listings comprise 12 percent of the hosts, but make more than a quarter of the revenue.

Jo Gebbia, the co-founder of Airbnb.
Jo Gebbia, the co-founder of Airbnb.

Alec Behrens, co-founder of the rival Booking.com – which initially dealt only with hotels for a much lower commission than travel companies – looked on admiringly at first. “If you have a house and spend summers camping, and someone stays and lives like a local, what’s wrong with that? It’s fantastic! But now Airbnb is the opposite, it’s about shareholder value, and that’s a different game,” he said.

Short-term rentals have moved from their casual origins to something that damages the many and benefits the few, according to David Wachsmuth, Canada research chair in urban governance at McGill University, who has studied Airbnb and co-authored the January 2018 report.

“When you look at impacts on a given city, there are more losers than winners,” Wachsmuth said. “A narrow constituency of hosts are making money, but everybody has their rent go up a tiny bit, everybody has quality-of-life issues. From a simple perspective of cities trying to look after residents, they should be restricting this activity.”

Rental platforms that aim to be more ethical, such as Fairbnb, could work, Wachsmuth said, but only if cities can enforce their regulations to stop competitors from underpricing these more social alternatives. “The tough question is how they do that as it’s extremely hard to enforce rules against hosts you can’t identify,” he said. “Airbnb will fight to the death to avoid giving that information over.”

Airbnb strongly denies that it contributes to gentrification and affordable housing crises. It points to studies it has done showing the positive economic impact of its activities, and said it has collected and passed on more than $1 billion in hotel and tourist taxes. “Experts have already shown that Airbnb has no significant impact on housing,” a spokeswoman said, citing studies in places like Prague and Germany, where it represents a small proportion of housing, and media articles saying that more building is what’s needed to prevent price increases in cities like Amsterdam.

There is also the argument that Airbnb allows people to supplement their incomes. Mary Margaret Kean, a real estate agent in New Orleans and president of the pro-holiday rental group Alliance for Neighborhood Prosperity, acknowledged that some neighbors might always oppose short-term renting to tourists, but said the money goes to paying people’s mortgages, retirement and other costs.

Supporters of Airbnb outside the InterContinental New York Barclay Hotel in November 2018, where global hotel industry execut
Supporters of Airbnb outside the InterContinental New York Barclay Hotel in November 2018, where global hotel industry executives and city officials were holding a conference on how to rein in Airbnb.

“A platform that is socially responsible and maximizes the positives sounds optimal,” Kean said. “You won’t always win over the neighbors, and if they vote as a whole against it then they have spoken. But if the neighborhood is divided, then it is the responsibility of the short-term host to be aware of complaints and issues, help abate them and create positive situations.”

Fairbnb is hoping to tap into a rise in people looking to travel more thoughtfully. Just as you might think about “good” shopping or transportation choices, said Veracruz, you could begin to think about vacation ethics. You might consider what you are bringing to the locals who are a living part of your tourist attraction, feeling the downsides of nuisance and gentrification.

“People are quite affected by the fact that it’s an activity happening around them and they are just feeling the negative impact,” Veracruz said. “It’s important for the platform economy, not just vacation rental, to analyze that impact and see how to bring positive impact also to those people.”

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