Eros Adragna explains why most major cities in the U.S. are having some issues with the popular sharing economy application.

1. Eros Adragna
AIRBNB'S
UNFORSEEN
CONSEQUENCES

2. The Technological Revolution
Living in the 21st Century has brought about several new changes.
Smartphones are now household items capable of tremendous
processing power and instant communication with virtually anyone in
the world, artificial intelligence is now capable of driving a car and the
world is enamoured with applications. From social networking apps
such as Facebook and Twitter, to financial management apps like
Acorns and Mint, mobile and computer applications have become a
part of our daily lives.
Eros Adragna

3. THE SHARING
ECONOMY
One of the more recent markets
growing in popularity for app
developers is the “sharing
economy.” Applications such as
Uber or Lyft allow users to share
their cars and drive other users to
locations for a fee, essentially
creating a taxi service. Uber has
seen an immense rise in
popularity, growing an astounding
40% each quarter and racking up
an impressive $3.63 billion in
bookings in the first half of 2015
alone. Other sharing economy
apps, such as Airbnb, allow users
to rent out their homes to users
for several nights at a time. And
while Airbnb, much like Uber, has
become incredibly popular in
recent years, it has been making
headlines for its legal issues. Eros Adragna

4. While Airbnb has been incredibly beneficial to many
average citizens, allowing them to make legitimate money
on the side, a few unscrupulous hosts have chosen to
abuse the service. Airbnb hosts are using the service to
force out their pre-existing tenants and replace them with
Airbnb users looking for short-term housing.
For example, in Los Angeles, a family was evicted from their
Fairfax four-unit Spanish-style home, only to see that same
house appear on Airbnb weeks later. Situations such as
this are occurring throughout the U.S. in places like
Washington D.C., San Francisco and New York.
UNLAWFUL LANDLORDS
Eros Adragna

5. Not only are these Airbnb hosts unethically evicting paying tenants in favor of more money
through services like Airbnb, they are also drastically changing the housing markets around the
country. For example, San Francisco, Airbnb’s hometown, has seen 1,900 long-term housing units
taken off the market due to sharing economy apps. Dave Campos, a San Francisco County
supervisor proposed stronger regulations on the sharing economy industry stating, “We want
short-term rentals to be part of San Francisco, But there's a commercial short-term rental
industry that buys entire buildings and rents them all out. That's changing the character of the
neighborhood and taking housing stock away from people who need it.”
And according to a recent study conducted by the Housing Conservation Coordinators and MFY
Legal Services, over 55% of Airbnb listings in New York are illegal, and the presence of these
listings has reduced the available city housing stock by 10%. Democratic State Senator Liz Krueger
has also noted the app’s disruption stating, “It’s taking apartments off the market, it’s increasing
rental costs for those people trying to rent apartments, it is shrinking supply, it’s creating
situations where tenants are being harassed by landlords who conclude it’s cheaper or more
profitable to rent out by the night as illegal hotel operations than to continue their legal
responsibilities to keep the apartments for residents.”
AIRBNB'S IMPACT ON
THE HOUSING MARKET
Eros Adragna

6. SO WHAT EXACTLY IS THE
APPROPRIATE COURSE OF ACTION?
Since the sharing economy industry is still new, there are very
few laws against these companies, and many cities that host
Airbnb locations are scrambling to come up with answers.
Recently, New York City Governor,
Andrew M. Cuomo, signed a bill that
imposed a heavy fine on Airbnb
hosts. The bill makes it illegal for
many to list their apartments on
sharing economy apps. Anyone
caught violating the bill will face a
hefty $7,500 fine. According to
Airbnb, this would affect more than
40,000 Airbnb hosts in the city of
New York alone.
NEW YORK
Other cities, like San
Francisco, have instead
opted to enforce laws
requiring hosts to register
with the city, and fine the
rental companies $1000 a
day for each illegal listing.
SAN
FRANCISCO
Or could Chicago’s ordinance,
which adds a 4% surcharge on
short-term rentals and
requires hosts to register their
units, be the proper method of
action?
CHICAGO
Eros Adragna

7. Most of these laws
and rules are still
fairly new, so there
will be some time
until we can see the
long lasting effects
they have on both the
cities and the
companies. I will
continue to post any
updates on this story
as it develops.
WHAT THE
FUTURE HOLDS
Eros Adragna