RELEASE: Groups Call on FTC to Act on Airbnb

October 12, 2016 -- Jamie Way

FOR IMMEDIATE RELEASE: October 13, 2016
Contact: Jamie Way, (303) 960-8272, Jamie@ForWorkingFamilies.org

Echoing previous calls from Senators Warren, Schatz & Feinstein,

City Officials, Community Groups Call on FTC to Act on Airbnb & Short-Term Rental Industry

Concerned with the growing housing crisis, cities look to the FTC for data & guidance on short-term rentals

***Since this release, the number of signers has increased to twenty-eight elected officials and ten cities. See the updated version here.***

NATIONAL – Twenty-five elected officials from nine cities joined with seventeen community groups from across the country to call on the Federal Trade Commission to take action regarding short-term rental companies like Airbnb and VRBO. In a letter sent today, the group urges the FTC to assess the number and nature of, as well as the revenue generated by, short-term rentals. Such a determination could help cities better understand and address the industry’s impact on housing costs.

“In San Francisco, we’re facing a serious crisis of housing affordability. Rents are skyrocketing and people are being pushed out of the communities they’ve made their homes for decades,” said San Francisco Supervisor David Campos. “We know that short-term rentals can exacerbate housing shortages, but we often lack the data we need to address this problem while encouraging business innovation. That’s why I’m calling on the FTC to help cities by studying this new model’s real world practices.”

Today’s letter follows a July letter from Senators Elizabeth Warren, Dianne Feinstein and Brian Schatz calling on the Commission to clarify to what degree the short-term rental market consists of people or firms operating in a commercial manner. By heeding the Senators’ previous calls, signers of the new letter say the FTC could help city officials and community groups attain better data on the industry’s impact on local housing costs. Local governments historically oversee the hospitality industry and housing, but city groups and officials say that the lack of reliable data makes policy design and enforcement challenging.

“Across the country our cities are grappling with skyrocketing rents that are pushing people out of their homes,” said Partnership for Working Families Executive Director Nikki Fortunato Bas. “The reality is that companies like Airbnb are having a real impact on housing costs and supply. We need to make sure city governments have the data they need to address that challenge.”

There is evidence that the short-term rental industry results in the removal of some residential units from housing markets and thereby may cause increases in rental costs. In 2015, Partnership for Working Families affiliate LAANE found that, contrary to company characterizations, in Los Angeles nearly 90 percent of Airbnb’s revenues were generated by commercial listings and more than a third of its revenues were generated by “hosts” with two or more listings on the site. Additional analysis found that short-term rental listings cost LA renters more than $464 million in raised rents in 2015. More recently, Partnership for Working Families affiliate Puget Sound Sage found that approximately two-thirds of all Airbnb listings in Seattle are for entire units, which could otherwise used as long-term housing, and that 36 percent of these units are rented out by hosts with two or more listings. Some hosts list dozens of entire units, clearly operating as property managers rather than homeowners sharing space. Researchers estimate that Seattle could lose nearly 2,000 units of long-term rental housing to short-term rentals over the next three years.

So far cities including Los Angeles, Seattle, San Francisco and Portland have proposed, and in some cases passed, local regulations that would allow for the type of home sharing that Airbnb most vocally promotes, and restrict or ban the kinds of commercial listings described above. Unfortunately, the short-term rental industry has, according to news sources, stymied cities’ efforts to access the data needed to enforce these laws by providing misleading data and opposing requirements that companies share complete and reliable data with the public.

You can read the full text of the letter here.

###