Airbnb Scandal

AirBnB gives platform for people to offer and rent their homes, apartments or rooms to strangers.

Chesky and Gebbia had history. As undergrads, they’d both studied at the Rhode Island School of

The obstacles landlords have to overcome causes them to lose their motivation to invest in rental properties and they instead flock towards other housing options to include condominiums, office towers, and hotels.

In 2011, the Los Angeles Human Right to Housing Collective joined together with citywide residents to protest unfair housing practices, and increasing rents at Los Angeles City Hall. Over the past four years, Los Angeles residents have seen rapid increases in rent, which is leading to more and more people moving out of L.A. in the hopes of finding more affordable living arrangements. The three percent rental increases that Los Angeles residents are accustomed to have been climbing this past year, and in 2016 many Angelenos could be seeing a four or maybe even five percent cost of living increase. Studies from the U.S. Census will show that Los Angeles renters occupy not even 50 percent of Los Angeles county housing units. In comparison to the percentage LA renters are taking home per paycheck, it is now becoming more affordable to buy property in Los Angeles, rather than rent.

This is a result of a demand shift to the left related to a lack of available tenants for the apartments. The property management company has to decrease rental rates allowing the quantity supplied to decrease as well (University of Phoenix, 2012), creating a downward swing in the supply curve. The price of rentals decreased to create less quantity that is available for rent creating equilibrium and a decrease in surplus. This is a difficult decision to lower price significantly but will continue to create revenue for the property management company while decreasing supply of vacancy.

The Lack of Affordable Housing in California Lowers the Quality of Life for its Residents

What is known about the dearth of inexpensive living spaces in high-cost, heavy populated areas is its scarcity is a function of supply. Demand remains a non-issue for policy makers as demand has

It causes displacement amongst the poor residences many of them can not afford to pay the high housing cost and rent increases.

“I took a trip to Oakland, California and fell in love with the area. We stayed at an Air B&B for the three days of our stay and the house was absolutely beautiful, it looked like my dream home. Despite all the glitz and glamour around us we noticed a large amount of homelessness compared to Columbus. We found out that this property is not someone’s home but a house used strictly as an Air B&B. When you hear something like that and see the amount of homelessness it makes you wonder how many of these homes are strictly for show? So after researching I found out, the reason for the rampant homelessness can be attributed to large increases in rent. Even worse, the cause for the increase is due to Silicon Valley” (Kasongo, 2017). Unfortunately, rent increasing virtually overnight is the reality of many low-income families. This situation is called gentrification and is felt throughout the world, from the Midwest, East coast or even Western Europe, no region is immune to this process. Gentrification in the Midwest is extensive and wide causing the displacement of many low-income minority residents which can lead to even bigger issues.

effect, because they know that it is likely that landlords will not be able to

Many large cities are experiencing skyrocketing rental/housing price because of the excessive demand and more importantly, the scarcity of land. San Francisco, as one of the most important financial centers in the world, is facing a serious dilemma due to its inflated rental/housing prices; people’s dissatisfaction over the government grow as they are excluded from the access to proper housing. San Francisco has the highest rents of any large city in the United States, which makes people, especially from low and medium income group, hard to acquire housing near their workplaces and force to commute from other regions of Bay area into the city. In other words, the high housing prices are pushing people as well as the productive industry out of the city. While people are accusing the government of being responsible for the failure of housing since it underestimates the rate of population growth, which leads to a shortage in the housing market. However, statistic shows that San Francisco actually built more than 30 percent more housing units per capita than New York City and Los Angeles in 2014. (Henry Grabar, 2015) It is because such shortage is artificially created by the policy makers to constraint land use, hence, increasing the supply of housing does not efficiently decrease the housing. The fundamental cause of this imbalanced housing market is the poor allocation of land use.

3. Make It Easier to Reject Renters: When a renter sends a request to a host to use their

Just as the treatment Uber and Grab were addressed by the BIR, DOTC and the LTFRB, the same may be made for Airbnb and home sharing companies. It is incumbent upon the government to make a memorandum circular and provide regulations that would be complete this time as to the enforcement of tax obligations.

The problem isn’t the fact that thousands of illegal hotels that have sprung up thanks to Airbnb and its rivals. But sinces the city is in such a huge housing crisis, a few thousand units off the market makes a significant problem. According to the SF Chronicle both Airbnb and its San Francisco critics are correct. That most of the booming vacation-rental company’s local listings are only occasionally rented to travelers, as Airbnb says. However at the very least 350 listings on Airbnb and hundreds of more houses listed on other sites are full time vacation rentals. Since these houses are allowed to exist it pushes locals to be gentrified from their homes. Since “short-term rentals are so lucrative that greedy landlords and tenants illegally divert precious housing stock to the practice” (Said). Many locals are driven out of their homes by their landlords, so they can rebuild the homes and sell it to richer folks. And these people use the homes as a shared house which drives more and more locals out of the San Francisco area. “Erin McElroy, director of the Anti-Eviction Mapping Project, (said that those living in the) Mason Street apartments tenants were evicted before being listed on vacation rental website VRBO” (Said). Over the past year Airbnb house listing has grew over 13.8% now the amount of listing on Airbnb is 5,459, even though

Hi Melissa, I agree with your analysis, I think people want to have convenience and as well as happiness. People that rent their homes are making extra money which help them to pay their bills. From the utilitarians and libertarians point of view the ban on Airbnb company is injustice. According to Rawls people in the original position should imagine their selves behind the veil of ignorance while choosing the principles and must also think of not only income and wealth but also rights, liberties, opportunities, status, and self-respect of the affected society. (Shaw, 2016, p.122-123).