What do you do for lodging when you are going to visit a new place? If you are like most

people, you may go onto a booking website like Expedia or call a hotel directly. Either way,

you’ll end up in some hotel for a reasonable price. Since 2008, Airbnb has been offering the

traveling public a different option. Airbnb is a social networking service that links individuals

looking to rent their apartments or homes with people that are visiting that area and don’t

want to stay in a hotel. Airbnb allows people to link with local hosts and rent unique lodging

accommodations for prices and timeframes offered by the host. Since its inception in San

Francisco in 2008, Airbnb has spread to 34,000 cities in 190 countries worldwide.

 

With the advent of Airbnb and the sharing economy, a number of complex regulatory

issues have presented themselves. Traditionally, cities and towns are left to enact their own

zoning and administrative laws or codes. In many cities and towns throughout the country and

world, the transactions taking place on Airbnb are illegal. Many cities place restrictions on

renting apartments to paying individuals for less than 30 days, essentially eliminating Airbnb’s

services. Without regulation, the problems effecting apartment owners and fellow tenants are

prevalent. The constant turnover of unchecked occupants in residential buildings that lack

security infrastructure presents clear safety concerns. Landlords have also been evicting tenants

to make room for fulltime short-term rental space that produces more income. For the

individuals renting the property, this provides an essential service, and for the renter of the

property, it provides a valuable source of income.

 

On October 10, 2014, San Francisco finally enacted legislation to legalize the use of

Airbnb. Prior to this legislation, San Francisco was among the cities that didn’t allow paid

rentals of residential homes for less than thirty days. Since the passing of the “Airbnb law,” set

to take effect February 1, 2015, residents of San Francisco can rent through Airbnb. This new

law requires the “hosts” to be residents of San Francisco for at least 9 months and they must

register as hosts with the city. Despite this new regulation, many homeowner’s associations and

landlords have begun expressly forbidding the use of Airbnb in their lease agreements. While

this new regulation from San Francisco helps ensure that people aren’t buying homes for the sole

purpose of renting it via Airbnb, it doesn’t go far enough to regulate this new industry.

Regulations such as the San Francisco “Airbnb Law” are a step in the right direction for

regulating this sector of the sharing economy. Requiring a residency requirement prevents the

housing market from being taken over with the purpose of providing rental income. What it

doesn’t help with is the security of the rental property both for renters and fellow tenants. The

Airbnb hosts are not required to meet any standards of safety for potential defects in their homes

leaving weary travelers open to potential injuries. They are also not required to look into the

individuals they are renting to, presenting a clear danger to the fellow tenants in the building.

The cities and towns also miss out on a large amount of tax income that would be gathered from

Airbnb’s hotel counterparts. While it is important for cities to facilitate innovation and not fight

against technological progression, it must be adequately regulated. Until regulators find a way to

ensure the safety of hosts, renters and other stakeholder’s, the use of Airbnb should be watched

carefully.

 

Bio: Christopher Mills is a staff member of the Journal of High Technology Law and a 3L at

Suffolk University Law School.