The question was blunt: Why does Airbnb continue to list New Orleans short-term rentals on its website if the company knows the practice is illegal in the city?
All eyes in the small auditorium turned toward the company's representative, who was sitting behind a makeshift dais.She smiled. There was a millisecond of stunned silence, then some laughter to break the tension. Airbnb wants its hosts to follow local laws, and it is committed to working with cities to make rules that work for everybody, she said.
It was a canned response, but the exchange, which played out Tuesday (Nov. 17) during a panel discussion hosted by the Urban Conservancy at the University of New Orleans, was fascinating if only for its novelty.
The short-term rental debate has been raging in New Orleans for years, but the panel discussion might be the first time anyone has ever been able to turn to a physically present Airbnb representative and ask the obvious question.
Since the San Francisco company's founding seven years ago, Airbnb's strategy regarding local laws was essentially to ignore them. When officials and advocates bucked, the company simply said its users were responsible for knowing and following local regulations.
Courtrooms not panel discussions saw the bulk of the company's engagement in the public policy debate.
That's starting to change, though. The company earlier this month signaled a reset in its posture toward local regulation, issuing a "Community Compact." In it, the company pledges to share certain data with cities, collect applicable taxes and participate in good faith as communities craft rules that work for them. In cities with a shortage of affordable rental housing, the company even promised to forbid hosts from listing properties they don't actually live in.
In an effort to demonstrate its new intentions, the company released for the first time a profile of its business in New Orleans and agreed to participate in the public forum at UNO.
It remains to be seen, though, how far Airbnb will go to fulfill its lofty promises if communities' demands are at odds with the company's business model, which is built on scale, low overhead and anonymity for its users.
Nationally, skeptics are already dismissing Airbnb's newly conciliatory rhetoric.
New York's attorney general, who has been battling the company in court as he tries to prosecute scofflaw rental operators, told The New York Times the Community Compact "is a transparent ploy by Airbnb to act like a good corporate citizen when it is anything but. The company has all of the information and tools it needs to clean up its act. Until it does, no one should take this press release seriously."
An Airbnb spokesman in a statement pledged to work with New York officials and reiterated the company's commitment to the Community Compact.
Airbnb's dispute with New York officials stems from the company's refusal to hand over its booking data, which would have made identifying and prosecuting lawbreakers as simple as sorting an Excel spreadsheet. The company did eventually provide an anonymized data set and expelled 2,000 hosts deemed to have broken community rules, but investigators never achieved the bulk prosecutions that many had hoped for.
In New Orleans, where officials are considering legalizing short-term rentals, some are also calling for Airbnb to hand over its list of users if it is serious about transparency.
Among those making the request are the city's hoteliers. Mavis Early, executive director of the Greater New Orleans Hotel & Lodging Association, said the city needs the names and addresses of everybody running short-term rentals in the city. Without them, any regulatory regime would lack enforcement, she said, because the city would have no way of knowing who was renting what and for how long -- two key elements of any likely legalization framework.
Jeffrey Goodman, an urban planner who participated in the Urban Conservancy panel, said such extreme transparency is unreasonable and unnecessary. However, he said, any workable solution would still require some buy-in from the listing sites.
A permitting regime would allow the city to require certain baseline inspections and restrict the concentration of short-term rentals on a neighborhood by neighborhood basis, Goodman said. Fees generated by the permits could then be used to fund enforcement efforts or subsidize affordable housing.
However, property owners would probably ignore such a system unless it is strictly enforced, Goodman said. In Portland, Ore., for example, 95 percent of the units up for rent have no permit.
It's easy to see why many would risk breaking the law. There is real money to be made.
Airbnb, citing its own proprietary data, says the average active user in New Orleans brings in about $10,000 a year, but that figure may obscure a bonanza on the upper margin.
Nearly half of all Airbnb bookings in New Orleans are traceable to the top 6 percent of users, according to Goodman's numbers, which the Airbnb representative didn't dispute. Most people probably don't make much money, but a few dozen people are making a mint, according to Goodman.
The top properties in New Orleans bring in $100,000 or more each year, according to AirDNA, a company that uses data scraped from the Airbnb website to produce pricing and occupancy analysis, which it then markets to hosts and property managers.
The Urban Conservancy brought in Phillip Supino, a city planner in the tourist town of Durango, Colo., to provide an example of a city that has managed to get a handle on its short-term rental problem. But even there, enforcement has proven difficult. Without data from the listing sites, the city is forced to investigate possible scofflaws on a case by case basis, which is labor-intensive, even in a town of just 17,000 residents, Supino said.
Durango has been able to keep the situation in check so far, he said, but it remains to be seen how long that will last with so much potential for profit. One woman in town simply views her fines as a business expense, an annoyance rather than a real threat, he said. If others follow suit, the city could lose its grip.
In a cash-strapped city like New Orleans, Goodman said, enforcement has to be as streamlined as possible or people will continue to ignore the rules. The best option is to prevent non-permitted properties from being listed in the first place, he said. To do that, the city would need to maintain a registry of permitted operators and listing sites would have to agree to use it to screen hosts.
Traditional bed-and-breakfasts are required to carry a permit, and the city lists all of them on its website. If the city is serious about leveling the playing field, said Bonnie Rabe, head of the Professional Innkeepers Association of New Orleans, short-term rental operators would be subject to the same land-use and permit restrictions.
Support for some kind of permitting system in New Orleans extends beyond the traditional hospitality industry, whose business is threatened by the proliferation of Airbnb-style rentals. The Alliance for Neighborhood Prosperity, a lobby group that favors a liberal market in short-term rentals, has called for Airbnb and other platforms to at least post permit numbers with their listings.
Airbnb's representative at the Urban Conservancy meeting pointedly skirted any concrete commitment to facilitating such a permit system, but Christopher Nulty, a spokesman for the company, said in a subsequent interview that it isn't opposed to regulation or permit requirements.
Nulty cited Philadelphia as a city that, with Airbnb's input, created a regulatory system that works. Residents there are only allowed to rent out their primary residences and can only do so for up to 90 days before they need a permit. Even permit holders can only rent up to 180 days in a year.
Nulty acknowledged that doesn't share its booking data with the city, so officials there have no way to know if the rules are being followed.
It would be difficult for Airbnb to manage different licensing requirements across the 34,000 cities where it operates, Nulty said, and legal users who don't need a permit, like people subletting an apartment for a month or listing a corporate rental, could be blocked out if cities make it illegal to list a property without a permit.
"If they decide that a permit-based system is the way they want to go, we will need to figure out a way to work with them on that system," Nulty said. "At the end of the day, the one responsible for enforcement has to be the city of New Orleans."
The City Planning Commission is scheduled to vote on recommendations for short-term rental regulations at its Dec. 8 meeting. The commission will accept public comment on the issue until Nov. 30.