New Orleans Becomes New Model for Airbnb to Work With Cities

2016-12-07 23:03:09

 

New Orleans Becomes New Model for Airbnb to Work With Cities

SAN FRANCISCO — When Airbnb started talking to the city of New Orleans last year about how to regulate the short-term rental market there, the company was fighting policy battles in places such as New York City and Barcelona.

New Orleans officials said they sensed that the bruising global confrontations might make the online room-rental company more willing to compromise than in the past. So as both sides worked together to reach a deal to legalize short-term rentals in the city of 390,000, New Orleans gained concessions from Airbnb that few other towns have received. The new rules, which include provisions for data sharing and registering hosts, were passed by the New Orleans City Council last week.

“Airbnb recognized that it would have to change the way they were interacting with cities and change the way things were going for them across the country,” said Ryan Berni, a deputy mayor of New Orleans, who negotiated the regulations with Airbnb.

Airbnb’s modus operandi in New Orleans reflects a move by the company to be more conciliatory with some local governments, especially after a year of tough regulatory battles globally. Working well with local lawmakers has become increasingly important for Airbnb, a privately held company based in San Francisco that is valued at $30 billion and that needs to continue to expand its business to justify that valuation.

Now the hope is that Airbnb’s collaborative approach in New Orleans can be a model for working with other locales. To cement that, Airbnb on Wednesday unveiled a “policy tool chest,” a set of guidelines that reflect the more cooperative strategy it took in New Orleans. The company said it intended to use those guidelines elsewhere around the world to help it work better with local officials and lawmakers.

In New Orleans specifically, Airbnb agreed to to share data — such as the names and addresses of its hosts — with the city, something the company has balked at doing elsewhere. Airbnb also agreed that its hosts must operate with a permit, with hosts automatically being registered with the city when they sign up to the service. In a nod to the local hotel industry, Airbnb will also ban almost all listings in the city’s historic French Quarter and set a 90-day annual cap for hosts who rent out entire homes.

“This is just the beginning,” said Laura Spanjian, a public policy manager at Airbnb who negotiated with New Orleans. “We need to make sure that the rules work and that the city can enforce them, but we want this to be a model going forward.”

Airbnb has tried to play more nicely with cities in the past, but some of those efforts have fizzled. Instead, some cities have increased their opposition to the company as Airbnb hosts have violated local housing laws by illegally renting out their properties and turned quiet residential areas into loud, tourist-filled zones. Advocates of affordable housing argue that Airbnb has also reduced availability in the process.

In New York City and San Francisco, relationships worsened to the point that Airbnb sued both cities over what it viewed as efforts to curb its growth. The company dropped its suit against New York and settled last week.

The recognition that Airbnb needs to improve its relationships with local governments starts at the top. Airbnb’s chief executive, Brian Chesky, said in an interview last month, “We’ve consistently viewed ourselves as partners to cities, but we’ve become increasingly hands on.” He added, “We won’t have perfect solutions overnight, but we’re going to continue to recalibrate.”

Airbnb’s approach in New Orleans grew out of the work the company had been doing around its new policy guidelines. For several years, the company has been talking with supporters, opponents, lawmakers and special interest groups about how to work better with cities.

The guidelines released Wednesday restate the company’s willingness to collect taxes and fees from travelers and to cap the number of nights that hosts can take in guests. Newer principles and commitments include rules to prevent party houses and a greater willingness to share data with cities. The company will also more fully support registration of hosts with cities. The guidelines may be applied differently in different places, creating dissimilar regulations depending on the city.

As the work around the policy guidelines took shape, Airbnb began having its discussions with New Orleans, where the number of Airbnb listings was growing rapidly. The company estimated there were about 2,400 listings in New Orleans in the year ending October 2015.

New Orleans officials knew that other cities were frustrated with Airbnb because those municipalities did not have the tools to regulate the service. The officials studied San Francisco and Austin, Tex., where the authorities had tried to put controls in place after giving Airbnb broad leeway. Outright bans had been too hard to enforce and were largely unsuccessful.

“It was clear that home sharing was already happening,” said Jason Williams, a New Orleans city councilman. “We needed to control, limit and monetize it.”

Airbnb’s case was helped in the city by a grass-roots group called the Alliance for Neighborhood Prosperity that supported short-term rentals years before Airbnb came to the table. “At first Airbnb didn’t even want anything to do with us,” said Eric Bay, who runs the alliance. “After we’d done our own impact studies and proposed ordinances, Airbnb eventually wanted to be our partner and friends.”

From the outset of discussions between the company and New Orleans officials, Airbnb showed it was willing to cooperate. It quickly became clear, for instance, that the hotel lobby, a powerful interest group in a city that relies on tourism, would have a big say in any final regulations. Airbnb agreed to restrict listings in the hotel-heavy French Quarter to satisfy the industry’s demands.

Lawmakers also knew that the city would need more money to enforce new short-term rental rules. So Airbnb agreed to collect hotel taxes and an additional $1-a-night fee from guests to help defray such costs.

But there was a sticking point: sharing data about Airbnb hosts with the city. Airbnb was initially reluctant to do so because of privacy concerns for its hosts. The company eventually agreed after New Orleans officials said they would protect the data and not make it public. That information will be essential in helping the city register hosts and for fining hosts $500 a day if they violate the new home-sharing rules. The city can even shut off utilities to Airbnb properties where rules are being broken.

“I was pleasantly surprised by the dialogue and by Airbnb’s approach,” said Mr. Berni, the deputy mayor. “It was more amicable than what a lot of other cities had experienced.”

Some city officials elsewhere are skeptical about whether Airbnb’s conciliatory approach will stick. In Amsterdam, which just finalized new rules that allow Airbnb itself to crack down on hosts who violate them, some politicians noted that a previous agreement the company made with the city was inadequate.

“Two years ago, Airbnb used its agreement with Amsterdam as an example of a good deal, but now we had to create a new one because what we had was not enough to enforce against illegal rentals,” said Marjolein Moorman, the leader of the Labor Party of Amsterdam. “I don’t believe that the company will enforce the laws we have.”

In New Orleans, some residents are also unsure whether the new rules forged with Airbnb will bring about change. Mary Moses, a legal assistant who lives in the historic Faubourg Marigny neighborhood with her husband, said that a full-time Airbnb next to her house that takes in guests every weekend has destroyed the quality of life.

“We love tourists in New Orleans,” she said. “But there is a 24-hour party three feet from my house.”

Ms. Moses is now waiting to see whether the sometimes loud, disruptive events next door will violate some part of the new city rules and whether anything will be done to stop the bad behavior.

“Maybe things will get better,” Ms. Moses said. “But Airbnb is changing everything.”

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