Airbnb: A House of Cards?

Episode Transcript
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Speaker 1 (00:00):
I want to acknowledge something. If I could have done
airban bill over again, I would have designed Airbnb with
more stakeholders of mind, including communities. I was twenty six.
I didn't really understand some of the things I understand today.
I'm not sure we'd be in New York if we
weren't able to host on Airbnb. Tactics are starting our home.

(00:24):
It's an opportunity to kind of bring other cultures and
um just wonderful people from all over the world into
our home. Welcome to Calling Bullshit, the podcast about purpose washing,

(00:44):
the gap between what companies say they stand for and
what they actually do, and what they would need to
change to practice what they preach. I'm your host, time
onto you, and I've spent over a decade helping companies
define what they stand for, their purpose and then help
them to use that purpose to drive transformation throughout their business. Unfortunately,

(01:07):
at a lot of organizations today, they're still a pretty
wide gap between word. Indeed, that gap has a name.
We call it bullshit. But, and this is important, we
believe that bullshit is a treatable disease. So when the
BS detector lights up, we're going to explore things that
a company should do to fix it. In this episode,

(01:37):
we're gonna check out Airbnb, the short term rental platform
who have welcomed more than a billion guests around the world.
Airbnb says its purpose is to create a world in
which anyone can belong anywhere. That's a pretty lofty purpose,
but I'm a believer, so much so that I'll often

(01:58):
stay in an Airbnb when I travel instead of staying
at some generic hotel chain. I feel like I'm supporting
a local host and having a local experience. When we
talk about ways to stem the eviction crisis, one of
them is to ensure that people still have access to
homes if the vacant units are being um legally turned

(02:20):
into hotels for terrorists, and then that's one of the
main reasons why we can't get out of this eviction crisis.
When I started the journey of this episode, I didn't
think there'd be a very wide gap between word. Indeed,
no company is perfect, but as an Airbnb host myself,
I believed Airbnb was good for local economies and by extension,

(02:44):
local communities. But the more I dug into it, the
more complicated this story got. Airbnb started literally by accident.
In the fall of two thousand and seven, best friends
and recent risdigrads Brian Chesky and Joe Gebbia shared an
apartment in San Francisco. One day, they noticed that all

(03:07):
the hotel rooms in the city were booked because of
a big design convention. Being designers themselves, they decided to
host people who were looking for a place to stay
on an air mattress in their apartment. Inspired by their
hyperlocal hosting experience, they created air bed and Breakfast dot
com for people who had rooms and wanted to host

(03:28):
traveling guests. Soon, Nathan Blecharcik joined the team, and after
successful marketests at south By Southwest and the Democratic Convention,
air Bed and Breakfast dot Com got invited to y Combinator,
a competitive startup incubator. Now with venture funding, expert advice,

(03:48):
and lots of optimism, Brian, Joe, and Nathan officially launched
their hub for hosts to list their spare bedrooms. Those
were the salad days, and in a dude named David
changed the course of the company forever. So David is
barry Manalows drummer, barry Manalos Drummer Forever change our business

(04:13):
When he decided that he was going to rent his
entire apartment on his website while he was on tour
with Barrier. And before that we had this rule you
hadn't be in the place with that, you couldn't provide
breakfast on the laws. Seems so silly now that CEO

(04:38):
Brian Chesky describing why in two thousand and ten they
went from being airbed and Breakfast to Airbnb, signaling a
shift from spare room rentals to entire houses and Q
scary music, sowing the seeds of a big future problem. Meanwhile,

(04:58):
the company quickly grew into a household name. Millions of
customers were using the platform, hosts were making some extra cash,
and tourists were staying like locals. It was a big
win win. It was a win win, win, win win.
Everyone was winning hashtag winning. The fantastic success of their

(05:20):
platform also allowed Brian, Joe and Nathan to use Airbnb
for Good to step in, for instance, and help people
fleeing from natural disasters to stay in airbnbs at no charge.
Hurricane Sandy tour across the East Coast, causing an estimated
fifty billion dollars in damaged poems, gone and When disasters

(05:42):
like to strike, many people find themselves in need of
temporary housing and space to figure out just what's next.
Airbnbes dot org's emergency response program helps connect people to
temporary places to stay in times of need. But it
only took a couple of years until that big problem
we mentioned began to surface. The Senators with more in

(06:04):
calling for a probe of the company and other similar businesses.
She's claiming it takes away from long term renters and
inflates prices by making it possible to stay in a
home where the owner wasn't present. Airbnb hopefully inadvertently made
it possible to become a professional Airbnb host, in other words,
to host for a living, sometimes in multiple properties. A

(06:29):
property owner knows that they can make that much more
renting to tourists through Airbnb than renting through a permanent pennant.
And so unfortunately, what we're seeing is not only a
landlord deciding I'm going to, you know, convert this unit
to an Airbnb instead, but people who can all up
multiple units and realize, oh, this is a great business model.

(06:51):
By mounting evidence correlated Airbnb rentals with rising local home
prices and rent prices, more houses listed as short term
rentals meant less available housing or locals. As much good
as Airbnb was doing by housing disaster victims, it seemed

(07:13):
like more harm was being done by displacing people from
their homes and communities because of the rising cost of
local real estate. How can you feel like a local
as Airbnb advertises, in a neighborhood without any more locals.
At this point I started to suspect some BS, but

(07:35):
maybe a more nuanced form of it, one where the
gap between word indeed was unintentional, more of an unforeseen
side effect of their success. To check my math, I
decided to reach out to an Airbnb data expert, a
New Orleans neighborhood sustainability organization, and a New York City councilman.

(07:57):
What I learned from these experts changed my perspective to
a lot. Airbnb says their purpose is to create a
world in which anyone can belong anywhere. But is that
true or is it just a bunch of bullshit? Get
out your BS detectors, folks, and give your spare to

(08:19):
your neighbor, because this story affects the whole community. More
discoveries about Airbnb right after this before you head to
the break, we'd love to hear what you think about
the show. Maybe you were inspired to take action, maybe
you disagree with today's bullshit rating. Either way, we want
to hear about it. Leave us a message at two

(08:41):
one two five oh five five or send a voice
memo to CBS Podcast at co collective dot com. You
might even be featured on an upcoming episode. Welcome back.

(09:01):
To help me decipher the data around short term renting,
I reached out to Murray Cox, founder of an independent
data platform called inside Airbnb. Murray, thanks for doing this
and welcome to calling BS. Thanks Ti, I'm excitted to
be on the show. So to start out with, I'd

(09:23):
love to have you just tell our listeners a little
bit more about yourself and your work. I'm sure. I
started a project inside A B and B back in
and I launched it in February, and it contained initially
data for New York City on all the A, B
and B listings across the city, and the platform had

(09:45):
tools that let you drill into the data, so how
many of the B and B listings were entire homes
thus as private rooms. Murray made all this data available
for free, and over the years, he's expanded to other
cities as he's received requests from municipalities and journalists. Today,
he collects data from more than a hundred cities and

(10:07):
keeps tabs on countries as well. What motivated you to
to take this project on? Well, I think originally it
was just curiosity. I had um I just completed UH
summer camp on gentrification in Brooklyn, and so I was
thinking about maps and statistics. And then I just read

(10:27):
a couple of articles about ebbing b in San Francisco
and New York, and they were using data in their
reporting and it left a lot of questions unanswered, and
so I just wondered whether for my own neighborhood whether
I could collect some data just to see what it said.
And for my neighborhood, which was Bedford Steveson, the majority

(10:48):
of listings were entire homes. People had multiple entire homes,
and I thought that there was a just a story
there that needed to be told, and that that was
the original motivation. So that word gentrification gets used a lot.
Would you mind explaining what you mean when you use
that term gentrification? Yeah, I think that they're there are

(11:11):
different interpretations of gentrification, but primarily it's higher income coasts
of people moving into a neighborhood. There's racial gentrification. Sometimes
people use the cost of housing, so whether rental prices
have gone up as an indicator of gentrification. On the

(11:32):
subject of whether M and B is causing gentrification, I
think it's important to have an annuanced understanding here. There
are a lot of factors at play in gentrification, like
housing policies, property investors, and tourism. But in talking about gentrification,
Murray introduced me to another related term to ristification, the

(11:57):
affect tourists have in places that are seeing an expand
ection of visitors and the relationship between an uptick and
tourists and their impact on the housing market. In some
cases EBBINGB is causing gentrification or this torotification. Sometimes they're
contributing to it. And so I think the story is
different depending on where you look. Right, So, the market

(12:19):
that Airbnb took on originally was part of the you know,
it was commonly referred to as the sharing economy, and
it was originally intended or at least they said, for
home sharing. And it sounds like what you're saying is
this is no longer true. This idea that you would
rent a room in a host's house and in so

(12:41):
doing meet the host and actually have an actual experience
with a local person. And it sounds like that is
less and less the case on the platform. Is that true?
In preparation for the show, I went back to the
way back machine. They contend an archive where you can
look at yes sight in his three it's really interesting.

(13:01):
But I looked at the website in two thousand and
nine and the homepage that comes up, the first featured
property is a property in New York City. You click
on it, you can see it's an entire They call
it an entire place, and the host describes their space
as I'm not even in the flat. I'm not going

(13:22):
to bother you. So even um, the design of the
website back in two thousand and nine was such that
they had different categories of listings. They had a category
called private room, where you are sharing the space with
the host, but they also had this category of entire place,
and over the years it came to dominate. So let's

(13:44):
talk about that. So I think of Airbnb as like
a disruptor of hotels, and you kind of go in
in the back of your mind. Well, that's not necessarily
a bad thing, because the hotel creates a kind of
generic experience, and if I use R and B and B,
I'm cantributing money to a local homeowner and supporting the
local economy and also having a local experience. But it

(14:08):
sounds like these whole home rentals are having a bigger
effect on real estate values in the neighborhoods in which
they are most prevalent. The first thing that you said,
you perceived that A, B and B was disrupting the
hotel industry. Yes, and I think that was a very

(14:29):
common perception. Even when I first started my work. Most
journalists were saying it was a battle between AB and
B and the hotel's. Okay, so that that is valid.
But where is the bing B getting their rooms from.
If they were getting them from spare rooms, okay, that's
one thing. But if they're getting them from entire homes

(14:49):
and apartments that no one can live in while the
guests is staying there, and in many cases they're being
rented out full time, then it doesn't become a battle
just between hotels and B and B. It's a battle
between AB and B and the cities. When an entire
home is rented on Airbnb full time, one unit of
housing is taken off the market, housing that would otherwise

(15:12):
go to a local person who needs a place to live.
Frequently you get some arguments from EBB and the hosts
and lobbyists that's ay, look at the economic benefit that
we're adding to neighborhoods, people that are spending money. And
then the first question is that those people might have
stayed in a hotel anyway. And the second question is

(15:34):
how much does one resident if they're displaced, how much
do they contribute to the neighborhood, And it's usually hundreds
of thousands of dollars they're contributing to the local economy.
To be fair, the company is certainly not the only
reason for gentrification, and often airbnbers want to be in
neighborhoods that are already gentrified. But evidence does suggest that

(15:57):
Airbnb is a meaningful and growing part of the problem.
So on this show, we're focused on you know, what
we call purpose led companies, and Airbnb is certainly one
of those. They say their purpose is to help anyone
feel like they belong anywhere. But if it turns out
that Airbnb is causing gentrification in neighborhoods and forcing locals,

(16:21):
who are the people who made the neighborhoods so interesting
in the first place, to be forced out. That's basically
the opposite of their mission. So looking at it that way,
how big a problem would you say? This is? Well,
I think if we look at ebbingb's purpose or mission
to allow people to live like a local, the first

(16:42):
part of that, I think is the impression that you're
staying with a host. Right, So if the majority of
listings are entire home departments, um, sometimes almost all of them,
I think that they failed to that aspect. You know,
you could argue that in an apartment as opposed to

(17:02):
a hotel, you can bring your family, you can cook,
you could. Okay, they're meeting their mission there, but at
what cost when you displaced residents. And in many cities
around the world, the social fabric of the cities are
changing from tourism. What I found as I talked to

(17:23):
residents in cities like Barcelona, Amsterdam, Venice, Italy, is that
the city starts to change. In Venice, on any single day,
there's more tourists in the city than there are locals.
There's about fifty five locals, and the population has been falling.
Once you get to that stage, um commercial business has

(17:46):
changed changes like instead of a local hardware store or
a supermarket, more bars, restaurants, and nightclubs will open up.
And this touristification of cities means that they become almost
two dimensional Disneyland versions of themselves. And I think if
you're if you're talking about tourism sustainability from a long

(18:10):
term point of view, surely that would be an unsustainable
type of tourism, right, you know, I think we need
to decide what we want our cities to be. Do
we want them to be livable? Do we want them
to be diverse? Do we want people that work in
a city to be able to live there also or
born in the city to be able to live there? Yeah?

(18:33):
And and and there's an additional issue, which is, you know,
these almost professional hosts who are in some cases just
big groups of investors who have raised a bunch of
money and gone out and bought hundreds of properties in
an area. And that that starts to get strange to me.

(18:55):
It's kind of a hotel that has been broken into
pieces and scattered throughout a neighborhood in a way. Yeah,
I think this is happening worldwide. There are multinational companies
that have raised money. ABBY is invested into some of them.
I belong to some Facebook groups where hosts talk about
investing improperties, and some of them have seminars and how

(19:17):
to create a property portfolio of airbnbs, and in many
cases they're controlling hundreds and sometimes thousands of properties. Sometimes
they're even doing it under the radar. For example, in
New York City, at one point there were hosts renting
out hundreds of apartments. Even though New York has a

(19:37):
one host, one home policy. One host managing hundreds of
properties is illegal to ensure that there's enough housing for everyone,
but compliance with this rule has been an uphill battle.
How does the city enforce that they don't know anything
about the host? They go to the bab website and
there's an approximate location. The host only has a name

(20:00):
that could be made up. They were mainly relying on
complaints from neighbors saying I think someone's using Yeah, there's
all these strangers wandering around in my building. I think
there might be an Airbnb. But if you consider going
back to when we're talking about this parrot. In New
York City, the fifty thousand Airbnb listings, about twenty five

(20:23):
or thirty thousand of them were entire apartments. A massive
amount of housing was being taken off the market, and
there's really no efficient way to stop it. New York
even went so far as to sue one of these
illegal operations, and during that case, Airbnb actually admitted that
although they worked to take violators down, they could no
longer stand behind the one host, one home policy. All

(20:47):
of this made me wonder about Airbnb's real intention with
regard to their mission. My opinion going into this episode
was that this effect, the effect that are having on
local neighborhoods is unintentional. They didn't design the platform to
do this, but they also didn't design it to not

(21:10):
do this obviously, So what is your opinion about that.
Was this intentional on airbnbs part or is this unintentional?
So when we look at the history of Airbnb, by
two thousand and nine, they have received six hundred thousand
dollars in investment, two thousand and eleven, they've got a
hundred and fifteen million dollars in investment, and two fourteen

(21:34):
and fifteen, they're raising millions of dollars venture capitalists like
Sequoia Capital and recent horowits. They're in the boardroom of
ABNB and they're talking about their business, and abb is
talking about all the regulations. They're talking about that entire
homes are being rented out for more, that the market

(21:55):
seems to be driving towards entire homes. I can bet
you that founders and the funders would have said, we
need to maximize the revenue. In New York City, they
were considering legislation to make it clear that people in
apartment buildings couldn't rent out short term. While they weren't present,

(22:20):
and ABBINGB lobbied against that. They must have known it
would have been bad for business. If they just cared
about home sharing or private room rentals, they wouldn't have
opposed that. In January, ab and B is aware of
the problem. It lobbied and spoke out publicly against the
passage of the New York state law in j that

(22:43):
banned a particular yet very popular type of short term
rental in New York City. But they didn't even make
changes to their side when the law went to effect.
They didn't advise their hosts. I think it wasn't until
that there was a settlement agreement between ebbing By and

(23:04):
the New York State Attorney General where ebbing me said, Okay,
we're going to educate our host about this new law.
So that's almost three years later. I think all that
evidence shows that ebbing knew about it. They were trying
to fight it. And when cities sign laws, they don't

(23:24):
respect them, right, So I want to pivot to the
topic of cooperation. You wrote a report in December called
platform Failures, How short term rental platforms like Airbnb failed cities,
and and by cities, you mean globally this is happening,
And there were a few things that jumped out of me.

(23:46):
So in June Airbnb publicly said we're eager to work
with our host community, as well as city and state
governments on clear and fair regulations for short term rentals
in New York. But in your report you decayed that
they say they want to cooperate, but they're actively uncooperative.
What are some other examples of them seeing one thing

(24:08):
but doing another. To understand why this is important, you
have to go back, probably a few years, when cities
like Portland and San Francisco started introducing their own registration systems. Initially,
when the registration systems were introduced, they got very low compliance,
so the host just would refuse to register. In fact,

(24:29):
after San Francisco introduced its own registration system, Brian Chefsky
used to the CEO of ABBB, used to rent out
his own apartment on ABANB. Maybe when he was away,
he didn't register with the city, even though there's a
managery registration system right and so even a year after

(24:50):
these registration systems were introduced, the city found that there
was only about ten or of hosts had registered. Wanting
some ountability, san Francisco introduced a fine of a thousand
dollars a day per unregistered listing. At the time, thousands
of hosts were unregistered. In response, Airbnb sued the city,

(25:15):
eventually reaching a settlement and making registration mandatory for all hosts. Today,
lots of cities use registration to help gather data, enforce regulation,
and collect taxes. But still Murray says a lot of
airbnbs are illegal. In the report that you wrote, platform Failures,

(25:35):
I think you say something like sixt of the listings
in Paris in Berlin and in New York City are illegal.
So this is a pretty big, a big problem. Who
who ultimately is responsible for complying with regulations? Is it
is it the platform? Is it Airbnb? Or is it

(25:55):
the hosts themselves? Like where do you place the responsibility?
And I think that there's a legal obligation and then
there's you know, ethical and moral obligations moral so that
these are complicated questions. I think in the case of Airbnb,
they know that that this legal activity is happening. It's
a majority of their business. They're profiting from it. They

(26:18):
have an ethical obligation to do something about it. They
have an ethical obligation to be honest about it. They
haven't been honest about it. They don't disclose any data.
They spend a massive amount of lobbying that says that
these are just people trying to um make an extra back.

(26:38):
They need this extra income to stay in their homes.
They're really just lies. You can't pull a B and
b's moral heart strings and expect them to react, right,
because they're not that type of company. Yeah, you know,
it seems to me if there B and B were
a good company, a company that that really has a

(27:01):
sense of moral obligation beyond its kind of legal obligations.
It seems like this is a real opportunity to proactively
get ahead of regulation, in other words, to stop seeing
cities and towns as adversaries and instead start to actually
collaborate with them and with activists like you to solve

(27:26):
this problem. Is that just a pipe dream or is
that kind of collaboration happening anywhere in the world. I
say it's not happening at all. Brian Chefsky says in
August this was after COVID. Brian Chesky thinks that MAB
might go down. They've had to get loans, they have

(27:46):
laid off the stuff, so maybe it was an emotional
time for him, But he says, we growth of us,
we made mistakes. I want to acknowledge something. If I
could have done airban bill over again, I would of
designed Airbnb with more stakeholders of mind, including communities. I
was twenty six. I didn't really understand some of the

(28:06):
things I understand today. I don't think any text CIO
should say they're inherently making the world a better place.
We have to acknowledge that there's unintended consequences the products
were making, and that we have to institutionalize our intentions
to serve multiple stakeholders. So I work really hard with
our team to try to make sure we're having positive
impacts on communities, will make hard decisions when we have to,

(28:28):
and fundamentally, I think our relationship with cities is going
to change. All the evidence Murray provides is pretty damning,
But when I hear Chesky talking about it, it feels
like he's maybe trying. I don't know. It seems more
like Airbnb just hasn't come to grips with how to
really do their purpose. You know, my wife and I

(28:51):
have an Airbnb in in the cat Skills. It's a
detached home. We use it as a guesthouse when we
have us who come and visit us in Pennsylvania, but
the rest of the time it's on the Airbnb platform.
And doing this episode has really caused me to question
the ethics of that. Um we haven't taken it off

(29:12):
the platform yet as of this recording, but it is
something that we are thinking about and talking about. How
do you feel about that? You know, airbnbs in rural communities,
is it ethical to operate at Airbnb in the way
that we are. Would you say it's unethical. I don't
think it's it's not necessarily unethical. I think it depends.

(29:35):
I would you know, I would probably think about understanding
what the housing pressure is because I think, especially in
a place that the cut skills, you don't want the
housing prices to go up for regular people that live there.
You don't want the city and towns just to depend
on tourism. Like I think there should be investment in

(29:56):
other industries, maybe trying to home land banks or other
things that provide housing. Maybe advocate for some type of
rent regulations so that people can still get there. And
just you know, for the record, we are registered so
fully fully compliant. Very very helpful, uh, to to really
think through the kind of ethical implications. Okay, Marie, two

(30:20):
final questions for you. First of all, if you could
tell Brian Chesky to do one thing, or maybe just
a handful of things to change to better live out
airbnbs purpose, what advice would you give him. The founders
of evan b are in a unique situation. Even though
they went public, they still own almost forty four percent

(30:43):
of stock. They have twenty votes more than a regular
show holder for every share that they own, so they're
in a unique position that they could even overrule some
of the investors. Some my advice would be, stop suing cities.
Stand down your lawyers, stand down your lobbyists. In some
cases they're trying to get preemptive laws and state legislatives.

(31:05):
Stopped doing that. Stop stop their political donations, especially in
locations that where they're loving for the regulations. You know,
I believe every city should be able to decide for
themselves what the regulations should be. And then I you know,
I think they could set up some independent regulatory councils,
all sustainability councils, but looking at the real long term

(31:29):
sustainability and impact of their business. And they should also
share data with cities so that cities really understand what's
going on. Like the cost of doing a census right,
which only happens every ten years, is like in the billions,
and Airbnb is sitting on this drove of data that
would be incredibly valuable for municipalities. Yeah, I love I

(31:51):
love those ideas. So Murray, last question, and this is
when we ask every guest on this show. We have
on calling B something called the BS scale, and the
scale goes from zero to one h zero being the
best zero bs and a hundred being the worst complete bs.
Airbnb says its mission is to make everyone feel like

(32:13):
they can belong anywhere. On a scale of zero to
a hundred, what score would you give Airbnb? Right? Well,
I mean, I really want to give them a hundred
because I've been fighting them at every tone. But I
want to be a little bit more analytic. So if
we consider them, maybe about the revenue is real hung sharing.

(32:37):
You know, I'm being I'm being generous there, but I'm
gonna penalize them because they pretend that that's a hundred
percent of the of the business or a large proportion, right,
So I'm going to discount that to ten, and therefore
I'm going to give them a bullshit score of ninety.
All right. I love that you actually you use data

(33:00):
to arrive at that school. Are very good, Murray. I
want to thank you for being with us today. This
was a great conversation. I also want to thank you
for the work that you're doing at inside Airbnb. Very important.
Great thanks to and and I appreciate this podcast and
what you're doing to really um call companies into account
from a different direction than the luck that I'm doing. Folks,

(33:27):
it's time to make the call. Is Airbnb really making
everybody feel like they can belong anywhere? Based on what
I've heard so far, I'm calling bullshit, But with an asterisk.
In the case where a host is an individual renting
out their space, Airbnb really is helping guests feel like

(33:47):
a local and providing a lot of these hosts with
the income that they might not otherwise have. On the
other hand, it feels like they're using these local hosts
as a convenient pr figly, since the vast majority of
Airbnb listings our whole homes frequently homes owned by companies

(34:07):
for the sole purpose of renting on Airbnb, using a
small fraction of their hosts to mask the real story,
avoiding transparency, and only holding themselves accountable some of the time.
So with that mixed diagnosis, next we'll hear from two
experts in city planning and housing justice on solutions for

(34:29):
Airbnb to do better. Right after the break to figure

(34:52):
out where Airbnb might go from here, We've assembled a
small panel of experts and asked them to propose some
on creed ideas for Airbnb to move the needle in
the right direction. So first up, I want to welcome
Veronica Reid, who is the executive director at Jane Place

(35:13):
in New Orleans. Veronica, welcome to the show. Thank you
for having me tie. So I'd like to have you
start out by just telling our listeners a little bit
about your background and the work that you're doing at
Jane Place. Sure. Um, I'm the executive director of Jane Place.
I've been in my position for two years and prior
to my coming on board, UM, Jane Place and a

(35:36):
group of other advocates focused on short term rentals in
the city of New Orleans. It was part of a
broader strategy of work that we do as both a
community land trust and an organization that works with tenants
focusing on tenant rights in the city of New Orleans.
That's great, And you said you used a word there

(35:59):
that listeners may not be familiar with a land trust.
Can you explain what a land trust is? Sure? Community
land trust is a nonprofit that owns land and uses
a least strategy to to reduce UM, the cost of
ownership UM, whether you are a renter or homeowner. Because

(36:24):
the cost of property is removed from the equation. I see,
so you're actually creating low cost housing yourself at James,
we're affordable housing developer. Yes, that's great. Okay. We are
also joined by former New York City councilman Ben Klos. Ben,
I want to welcome you to the show. Thank you
for having me. So, Ben, can you talk a little

(36:47):
bit about your background? Sure, I'm a software developer, I'm
an attorney, and most recently, I've been a New York
City council member, representing a hundred and sixty eight thousand
people on Manhattan's Upper east Side and a city of
eight point eight million and h My claim to fame
is I wrote the law in New York City to

(37:08):
regulate Airbnb. And part of what made me run for
office and write this law is that the rent is
too damn high. Right, So let's get right into some
ideas for fixing that problem. Veronica, I'm gonna ask you
to go first, in two minutes or less, what is
the number one thing that you think Airbnb should do

(37:30):
to better live their purpose, which is to help everybody
feel like a local. I'd like to say two things.
The one thing that they could do is be a
better partner with the city, and what we need is
UM for Airbnb to have a field on all listings
that shows the permits UM, both the operator permits and

(37:52):
the permitting for the unit, because right now it's not
a requirement, so there's no way to tell whether it
is illegal short term rental or not. And what we
believe is that there are a lot of listings on
Airbnb across the city of New Orleans that are not
licensed and therefore the city is losing potentially millions of

(38:12):
dollars in UM permitting fees annually. And we're just a
city that cannot afford um to lose those fees. Right,
So you're saying, change the platform to make it easier
for you to collect the taxes that are due uh
the city? Is that right? Correct? Modify the platform? Yeah? Okay,

(38:34):
that makes a ton of sense. Alright, Ben, You're next,
what is the number one thing that Airbnb should be
doing better to deliver on what they say they stand for.
The biggest bulshit of Airbnb is this whole focus on
their hosts. And if it was about the hosts, there
wouldn't be a button to click for whole house rentals.

(38:58):
If it was really about the if it was really
about connecting people and helping people to feel local and
having the the local host show people around. Then the
only thing on Airbnb would be hosted stays, and that's
actually where New York City may end up. M hm. Yeah,
So there is a distinction between hosts who actually are

(39:22):
living in the property that they've put on Airbnb and
hosts who are not living in the property that they
put on Airbnb. And then there's another kind of gradation,
which is companies that are buying up properties and operating
in some cases hundreds of properties on the platform. Short
of banning those rentals, which you could absolutely do, is

(39:42):
there anything else that Airbnb could could do in New
York City. So we have a law going into effect.
We learned lessons from jurisdictions like Louisiana. So host will
be required to have a registration number a platform where
be required to verify that that that registration number is
valid before they can process a listing. And what the

(40:06):
city will be doing is going into a regulatory process.
And we know that the state law here says that
you can have a hosted stay, you can have a
hosted stay for less than thirty days. Uh, you can
rent your apartment for longer than that and put it
into the market. And one of the questions that will
be determined as the city issues regulations is whether or

(40:29):
not single family homes are a building that a person
can rent out entirely or if those have to be
hosted to. So ultimately, we're actually asking Airbnb just to
follow the state law. But I'll tell you I went
to visit London. It's a very expensive city, but there
are no options in London to rent an entire unit.

(40:53):
So they've done it in other jurisdictions where their laws
were stronger, and they can do it here, and they
can do it in Louisiana. They can follow the law. Yeah,
thank you for that. Both, uh, really interesting takes on
things that Airbnb could change. Um, it's my turn. And
so as I thought about this, the first thing that

(41:14):
occurred to me is that Airbnb has already gotten into
the real estate development business through I guess i'd call
it a side hustle called backyard. They're actually building housing
of various kinds that are air quotes, you know, airbnb friendly.
So they're in a great position to actually begin to
directly solve the housing scarcity problem that they themselves are creating.

(41:37):
So I'm gonna call my idea local love. So imagine,
with the local Love initiative, Airbnb would begin to finance
and build net new, low cost housing in the neighborhood's
hardest hit by gentrification. Local Love would be funded either
by essentially taxing part of the profits the platform is

(41:58):
making locally. Maybe it's by sharing the financial burden between
the platform and local hosts, especially hosts who have more
than one property on the platform. And since you know,
presumably the local tax base is going up due to gentrification,
maybe we could get municipalities to also share part of
the burden. You you both will be the experts there um.

(42:21):
But my idea, local Love would create affordable housing to
preserve local communities, and wherever possible, create housing that is
in itself airbnb friendly, so that it also helps some
low income folks to begin to actually become Airbnb hosts
and supplement their own income. So what do you both
think of that idea? Any love for local loves? It's

(42:44):
okay if you hate it, just tell me I don't
hate it. I think the issue is that you have
to have the available um properties for infill um at
at at a scale that makes a difference, right, because
when we talk about the need for housing developed here
in the city, we talk about the thirty three thousand
units would solve our affordable housing issue. But the thing

(43:07):
is is that we can't build thirty three thousand units
to solve that issue. We have to look at what's
already here to solve the problem. Veronica is right, it's
about where to build. I think that your idea could
work in some places where they don't have the money
to build the affordable housing. And UH Airbnb might be

(43:29):
interested in having more hosts in the cat Skills, which,
at least during this pandemic, has become a destination for
families who need to get out of the city, and
they might want as much money coming in from urban
areas as possible. So it could be a boon for
parts of this UH state, parts of this country that

(43:50):
have seen abandonment because the jobs just weren't there. No,
that's interesting. Yeah, So maybe it's maybe it's not in
New York and not in New Orleans, but it's maybe
maybe it's an idea that could work elsewhere. Veronica. I
want to build on your idea a little bit because
it seems to me that what lies at the center
of what you were advocating for is transparency. Um, just

(44:11):
another flavor of transparency that I wanted to put out
there and see what the two of you think of.
You know, right now the platform, there is a reputation
grade that you get on the platform, right, Hosts grade guests,
guest grade hosts, and there's a whole hierarchy that's created

(44:31):
there already on the platform. What if we created hosts
on another dimension, which is the impact that they are
having on the local economy. What if, you know, a
green listing is a host that lives in the property,
a yellow listing is a non resident host who owns,

(44:53):
you know, maybe one property at most a vacation home
or something that they have on the platform orm and
a red host would be anyone who owns more than
one additional property, or maybe it's more than two or three.
I don't know where the line is. But what about
grading hosts just so that guests can see clearly the

(45:14):
impact that they're having on the local economy through the
choices that they're making, and they could still choose to
rent from, you know, in quotes professional host that is
causing gentrification if they want to, but they at least
have the choice to vote with their wallet and and
go with a green host who is actually benefiting or
not at least not harming the local economy. Well, the

(45:37):
skeptic in me says, the guest has to care UM,
and I don't know that Airbnb guests care at that level.
But I do believe that neighbors would care about that information.
Neighbors who have problems with Airbnb on their block or

(45:58):
across the street would probably be very interested in that
type of information, Right, Ben, what do you think about that?
I'm concerned that ultimately, if people are approaching it in
an economic sense, they are looking for an unhosted stay.
If you're a family, bunking everyone into a room with

(46:19):
two queen beds doesn't quite work. We haven't really seen
UH the hotel market really adapt to the way people
are now traveling today. But ultimately, I don't think that
a person looking for an unhosted stay is going to
care whether that metric of a green, yellow, red UH
is there. So I think if we're using metrics, it

(46:43):
needs to be something where UH the consumer is going
to care or there is an impact for having a
red flag. What if it was two ways and the
badging was both for guests and hosts. So if you
had a tendency to stay in a local friendly manner,
stay in you know, owner operated airbnbs, you know, you

(47:04):
would be a local friendly guest, or maybe you get
a local neutral badge, or you get a local unfriendly
badge because of the way that you use the platform.
And there are you know, commensurate I don't know, awards
for being local friendly. Do you think that would help me?
I think we're talking about semantics. Here's because, for example,

(47:26):
here in New Orleans we have um A residential licenses
for short term rentals, and those are all supposed to
be owner occupied in residential neighborhoods, and so um, in
a sense what you described should be happening already. UM,
but we know that's not the case. Right. Let me
shift gears here a little bit, um and just pick

(47:50):
up on another thing that Airbnb says. They have said,
as a part of our commitment to our stakeholders, we
commit to communities as well as to host, to strengthen
the communities that we serve. What are some other ways
that Airbnb could actually strengthen a community rather than weaken it.
New Orleans, New York City, very crowded places in New

(48:14):
York City this morning, Uh, there were fourteen thousand, five
dred seventy eight children who woke up in a homeless
shelter because they just didn't have a home. And right
now we have twenty thousand Airbnbs, whereas the entire unit
for rent, and so um Veronica is talking about thirty
thousand units. Would solve the housing crisis in New Orleans.

(48:37):
If we got these twenty thousand units back and could
even put it towards homeless services and giving affordable rental
to these families, Uh, it would be a complete game changer.
And I think if they could have an honest conversation
with New Orleans and abide by their laws that they
had had an honest conversation with New York City, I

(48:58):
think we'd all be in a very different play us.
But they haven't been interested in that. They've been interested
in the profit motive, right. Yeah, And look, I completely
understand that both of you are kind of skeptical that
Airbnb is going to do anything on its own to
solve this problem. But I do want us to suspend
our disbelief a little bit, and dream about if we

(49:18):
were in charge, if we were Brian Chessky for a day,
what are the ways in which we would change the
platform to begin to strengthen our local communities. If we're
going to change it fundamentally, if we if we have
the magic wand it really starts with really making it
about the hosts and saying, come stay in in Brooklyn

(49:43):
or the Bronx or in Queens and this is what
you're gonna have for breakfast. You're gonna stay with a
a Haitian family, or a Greek family or a Russian family,
And what you're really signing up for is this host
who welcome you, to feed you, to be part of it.
But it also means a change in the compensation and
a change in what hosts are doing, and a change

(50:06):
in the listing where you're actually looking at the listing
and you're not looking at which is the least expensive,
which has the most bedrooms, but which has the best
host who's going to show me a great time while
I'm there. Yeah, that sounds right to me. I want
to circle back to the thesis of this show, which
is that there are certain companies in the world that
are we call them purpose led companies, and Airbnb is

(50:31):
a company that we would characterize as being a purpose
led business. They are trying to help people have you know,
um paraphrasing, but have local experiences. It says that on
the label, and so at some level a really good
purpose led company should, because they say it on the label,
should actually try to make that real. And so what

(50:53):
I'm saying is Airbnb really should be self regulating, right,
They really should be. They shouldn't be forcing the two
of you to take them on and to pass laws.
They should see the problem that they're creating, you know,
the degradation of the local feel of the neighborhoods that
in many cases they're doing business in is actually bad

(51:15):
for the neighborhoods. It's bad for the city. It's ultimately
it's bad for them because if New Orleans stops feeling
like New Orleans, people are going to go there as
much and Airbnb will suffer. And they're now in a
place where they're creating harm. So what we want to
explore here is what should they do to heal it? Right,

(51:35):
and collaboration with folks such as yourselves who are engaged
in your local communities. Seems like a good place to start.
And so at the end of the day, what would
be the economic impact to Airbnb if they just banned
those more professionalized or corporate hosts. If Airbnb said it
is illegal to put more than one property on the platform,

(52:00):
I think that's where Airbnb is headed. In New York City.
They would go from having thirty eight thousand units to
about eighteen thousand units. And that's still a huge number
of units, uh huge amounts of profit, but it would
completely change things, and that would be enough units leftover

(52:20):
to house every homeless family in New York City. Let
me um add a sort of idea log to the
fire here. Airbnb has given rise, it seems like to
a new ecosystem of companies. So there are these new
hotel slash short term rental companies, kind of urban development
companies that are being created, like Saunder is one of them,

(52:44):
Arriva Nativo, Blue Ground, And it seems like these companies
are creating entire home style hotels in other words, kind
of a hotel cobbled together from individual homes. Are also
developing apartment buildings that are designed so that anyone can
rent their apartment on Airbnb while they're away. Are these

(53:08):
companies part of a potential solution or they just a
bigger part of the problem. They aren't part of the
problem in terms of displacement because our local residents would
not be living in those those units because they're not
affordable to local residents. But one of the things that
could be a value is that there was a sort

(53:31):
of um affordable like for every commercial units there could
be some contribution to an affordable housing fund that could
help support the development of affordable housing in neighborhoods because
there are thousands of commercial short term rentals in the

(53:53):
city of New Orleans, right. I mean, that's kind of
where I was trying to go with local love is
is actually funding the creation using current units to fund
the creation of affordable housing. Okay, is there anything that
I haven't asked either of you today that you wanted
to mention or talk about in regard to Airbnb. Well,
I'd just like to say that we do believe that

(54:15):
the change in local regulations here has had a positive impact,
and so UM since the change in the regulations, UM,
we have definitely seen folks return to neighborhoods and that's
important and we hope that um that will continue to
be the case. Great, thank you, so last question for
both of you. On this show, we have a scale

(54:38):
called the b S Scale. It goes from zero to
one hundred, zero being the best score zero vs. One
hundred being the worst score on BS. So on a
scale of zero to one, how big of a B
S or do you think Airbnb is? Ben I'll start

(55:00):
with you. That's a high score, all right, unequivocal, Thank you, Veronica.
What would you give them? Maybe I'll give them around
a ninety, maybe a ten, but that could be a
margin Arab plus or minus right, so they might be
as high as right. But those are high scores. That's

(55:23):
eye opening for me. It's funny because I entered this
this episode thinking that they were a lower BS company.
But the deeper I've gotten into it, the more I've
started to think, actually, it really is about maximizing profitability
and it's not about delivering on the local nous. I'm
actually really coming around at that point of view. I
think the problem is bigger than I thought it was

(55:45):
at first. Okay, Veronica read, thank you so much for
joining us, today. Thank you for having me and Ben Calobs,
thank you for being here. This was great. I really
appreciate your time. Thanks for having me. I'd like to
end the show today by giving Airbnb an official BS score.

(56:05):
The scale goes from zero to a hundred. A zero
means there's zero gap between word indeed, and a hundred
means the gap is huge total BS. I came into
the episode today thinking that Airbnb had a few problems,
but I also had the strong sense that their leadership
was committed to their purpose and to being a positive

(56:27):
member of the communities that they serve. I was thinking
about giving them a score, you know, in the low thirties.
But now, like me, you've heard our guests today all
give Airbnb really high scores, and I have to say
I found a lot of what they said today. I
opening Airbnb is in a more serious situation than I

(56:51):
initially thought. I think they've reached a crossroads and they
need to look inside themselves and make some decisions. If
they change course now, admit that there's a problem and
commit to partnering with cities to solve it, they can
avoid a crisis. But if they continue on the path
they're on they'll become more like some of our other

(57:13):
ultra high scorers pretenders who get dragged through the court
of public opinion and then ultimately get regulated. So I'm
going to give Airbnb a cautionary and to think that
it's all Barry Manilow's drummer's fault. I didn't see that coming.

(57:36):
To weigh in with your own score for Airbnb, visit
our website Calling Bullshit Podcast dot com. We'll track their
behavior over time to see if they can bring that
score down. You'll also be able to see where Airbnb
ranks on BS compared to the other companies and organizations
we feature on the show. And if you're starting a

(57:58):
purpose led business or you're thinking of beginning the journey
of transformation to become one, here are three things you
can take away from this episode. One, design matters, and
the founders of Airbnb went to one of the most
prestigious design schools in the world, so they know it.

(58:19):
As all of our guests pointed out today, there are
functional aspects of the Airbnb platform that currently favor shareholders
over stakeholders like cities and communities. When you design your product,
design it with all of your stakeholders in mind two
actions speak. Airbnb explicitly names communities and cities as stakeholders.

(58:46):
They need to walk that talk. Today we talked about
taking actions like banning professional hosts and reallocating housing to
those in need. Your actions would undoubtedly be frint, but
the point is doing is believing. And three, a principle

(59:07):
isn't a principle until it costs you money. Is Airbnb
pro community or not? Sure? Banning corporations from owning multiple
properties on the platform would cost Airbnb some money in
the short term, but if that action saves the neighborhoods
and communities that Airbnb is a part of, shareholders will

(59:29):
benefit longer term. Making money is a good thing. Just
be long term greedy. Thank you for joining us today,
Murray Cox, Veronica Read and Ben Calos. You can find
links to inside Airbnb, Jane Place, and Everybody's social media

(59:50):
handles on our website Calling Bullshit Podcast dot com. And
if you have ideas for companies or organizations we should
consider for future episodes, you can submit them on our
website Calling Bullshit Podcast dot com. And special thanks to
David A. Proserpio and also to air d n A

(01:00:11):
for providing invaluable insights for today's episode, and Brian Chesky,
there is still a tremendous amount of goodwill toward you
and Airbnb out there right now. We're rooting for you
to do the right thing, and if you ever want
to come on the show to talk about it, you
have an open invitation and if we made you feel

(01:00:34):
at home today, Subscribe to the Calling Bullshit podcast on
the I Heart Radio app, Apple Podcasts, or wherever you
get your podcasts, and thanks to our production team Hannah Beal,
Amanda Ginsburg, Andy Kim d s Moss, Hailey Pascalites, Parker Silzer,

(01:00:56):
Basil Soaper and me Jehan Zulu. Calling Bullshit was created
by co Collective and is hosted by Me Time onto you.
Thanks for listening. Before you go, we'd love to hear

(01:01:16):
what you think about the show. Maybe you were inspired
to take action, maybe you disagree with today's bullshit rating.
Either way, we want to hear about it. Leave us
a message at two one two five oh five two
three zero five, or send a voice memo to CBS
podcast at co collective dot com. You might even be
featured on an upcoming episode.

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