In 2007, two roommates in San Francisco came up with the idea of putting an air mattress in their living room and turning their home it into an informal bed and breakfast to help pay the rent.
The rest, as they say, is history.
Airbnb, the company born from that moment, is now the biggest accommodation provider on the planet with 400 million check-ins in 191 countries since launch.
But not everyone is a fan. Airbnb is blamed for increasing rental prices in tourist hotspots where landlords can earn higher rents from short-term lettings than from the longer-term tenancies. The hotel industry has also declared war on the company for facilitating unregulated holiday accommodation and turning entire apartment buildings into quasi-hotels.
As is often the case with disruptive new technologies, governments have been slow to respond. But several countries, jurisdictions and cities have passed laws to mitigate some of the negative social and economic impacts of Airbnb.
With the exception of Singapore, where security guards stop people from going into illegally rented Airbnbs in public housing, the impact of these new laws and regulations on travellers who book Airbnbs is this: the choice is much more limited than it was before because so many properties have been delisted in places like New York and Barcelona.
These new rules change everything for Airbnb guests in key US cities. The risk of booking an illegal Airbnb – and getting duped in the process – has increased exponentially, as a guest called Sherrie12 recently discovered.
“When looking for an apartment to rent in Manhattan I avoided all listings indicating we shouldn’t tell people we were a short-term rental,” she wrote on Airbnb’s community forum.
“After booking, the host asked me to send my personal email so that he could send me an attachment. The attachment had instructions to hurry through the lobby, not talk to anyone in the building about why we were there, etc.
“This week I discovered that there is a law against many short-term rentals in New York. The apartment we’ve rented has all the characteristics of what we’ve found to be illegal… I asked the host if he would allow us to get a refund if we cancelled even though it was a strict cancellation policy. He has not replied. I sent a message to AirBnB 2 nights ago and received a response that they are working on it.”
Spain was one of the first countries to regulate holiday accommodation in private homes. In Barcelona, where Airbnbs must be licensed, no new permits have been issued since 2014.
In 2016, the city created a taskforce that combs the streets looking for illegal holiday units. It also built a website to make it easy for residents to report landlords who break the law. Nearly 5000 holiday rentals were shut down as a result and 6500 fines were issued, some as high as $50,000.
In Palma, on Mallorca island, where rental prices have increased by 40 per cent since 2013, there is a ban on letting units to tourists. Standalone homes and units in industrial areas or near the airport are exempt.
In Madrid, units rented to tourists for more than 90 days a year must have a separate entrance – a law that effectively made 95 per cent of the city’s Airbnbs illegal overnight.
And in Valencia, holiday rentals can be located only above businesses or underneath homes; they cannot be on the same floor as other homes. Since 2018, all holiday rentals in Valencia must also be licensed. The city has issued only 18 new permits in 18 months.
With 65,000 homes in Paris listed on Airbnb and 35,000 more listed on other websites, the French capital has the world’s largest home-sharing market.
But renting an investment property to tourists on Airbnb is illegal in Paris and 17 other French cities, while the maximum number of days a year anyone can rent a property they live in is 120. Hosts must also register as a business and attach registration certificates to ads.
Violations attract fines of up to $20,000 – payable by the website, not the host. Paris is also suing Airbnb for $20 million in unpaid fines.
“I have nothing against Parisians who rent their home a few days a year to make some cash,” Mayor Anne Hidalgo told the Journal du Dimanche newspaper.
“The problem is those who own multiple properties who rent apartments all-year-round to tourists without declaring them, and the online platforms, which are accomplices, welcoming them.”
NSW was the first state to act. In June 2018, it passed two laws.
The first allows strata schemes (individual corporate entities that manage most apartment buildings in the state) the right to ban holiday rentals if 75 per cent of owners agree – but only if the owner does not live in the unit.
The second law states hosts within the Greater Sydney region can let their homes for only 180 days a year. In regional areas of NSW, councils can impose limits between 90 and 180 days a year.
Victoria was the next state to take action. In August 2018, it passed legislation that bans holiday letting in units that receive three serious complaints within 24 months from neighbours about tenants’ behaviour. The host can also be fined up to $2000 per complaint.
In Tasmania, short-term rental permits are required for homes with more than four bookable bedrooms, as well as for shacks and investment properties.
A parliamentary committee is investigating short-stay accommodation in Western Australia. It is yet to make any recommendations.
In New York, renting a home you don’t live in as holiday accommodation is illegal. Renting your home to a tourist for less than 30 days is also illegal. Even advertising one is illegal.
The only way around it is for a host to rent out private or shared rooms in a property they live in – a regime that syncs with Airbnb’s original and still purported mission.
Las Vegas passed similar laws in December. Entire properties cannot be rented for less than 31 days. Hosts can rent out rooms for no more than 12 days at a stretch, and can only rent a maximum of three bedrooms in their house – or pay a $1000 registration fee for the fourth. They must also carry $500,000 in liability insurance.
In San Francisco, holiday rentals for entire properties are limited to 90 days a year and hosts must live in the same household for at least 275 days a year. They must also register as a business and collect a 14 per cent hotel tax from their guests.
Singapore has the toughest holiday rental laws in the world. The minimum rental period for a privately owned home is three months, while public housing, where 82 per cent of Singaporeans live, cannot be rented to tourists at all.
There are also legal restrictions on the number of people who can stay in a unit at any one time (equivalent to two people per bedroom).
Hosts who breach the laws face fines of up to $20,000, while those who live in public housing might also face eviction.
Nevertheless, there are hundreds of Singaporean properties listed on Airbnb. It’s not illegal to book one – but it’s not recommended because building security guards have the right to refuse entry to non-residents.
Last year councils in Auckland, Rotorua, and Queenstown introduced a new tax for short-term accommodation after the hotel industry complained it was needed to create a level playing field.
The tax applies to properties that are rented for more than 28 days a year, and is passed onto guests.