Could The Party Soon Be Over For Airbnb?

For freelancers and artists living in expensive cities like New York, the home-sharing site Airbnb has become a way to subsidize their rents. It's also often illegal. With the site's users in the crosshairs of New York's attorney general, and questions elsewhere, some now wonder if the good times are going to end.

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For people who live in expensive cities like New York, being able to rent out their spare rooms or apartments to travelers can be a godsend. One way to do it is through the website Airbnb. But government officials in New York and elsewhere argue the site is a menace. They say it's hurting quality of life in neighborhoods and costing states millions in tax revenue. As NPR's Dan Bobkoff reports, New York has become ground zero in the fight.

DAN BOBKOFF, BYLINE: Evelyn Badia represents the good side of Airbnb. By trade, she's a freelance advertising producer. But after the economy collapsed, most of her work dried up.

EVELYN BADIA: Those were dark times. I thought I was going to move out of my house.

BOBKOFF: But it was around then that she read about Airbnb. She wasted no time, immediately listing every room she could. Soon, the tourists and travelers started coming, paying good money to stay at her home.

BADIA: And here I am, four years later almost. It's not what I thought I was going to be doing.

BOBKOFF: Early on, she stayed at a friend's so she could rent her own bedroom. Advertising work is still rare, so her house has become a bed and breakfast of sorts.

BADIA: So we're on the ground floor and this is a second living room.

BOBKOFF: She now rents nearly every room in the house.

BADIA: This used to be my bedroom, which, you know, has special attachment.

BOBKOFF: It's now for rent. She sleeps in a smaller room nearby. Airbnb has become her livelihood. She earns roughly 60 grand a year through rentals, enough to pay her mortgage.

BADIA: It's a salary.

BOBKOFF: She's not the only one. Some hosts, which is what Airbnb calls people renting out rooms, will sometimes even leave the city or crash with family or friends so they can rent their place at a profit.

DAVID HANTMAN: These are just regular people trying to make ends meet.

BOBKOFF: David Hantman is Airbnb's head of global policy. But the fact that Airbnb is a way struggling creatives and young workers make rent is a storyline the company is pushing as it fights what it considers outdated laws and regulations. The company's own data show that a majority of its hosts are freelancers, or what it calls non-traditional workers.

But the New York attorney general thinks that's a smokescreen to hide an uncomfortable reality. Matt Mittenthal is a spokesperson for New York Attorney General Eric Schneiderman.

MATT MITTENTHAL: Airbnb is misleading its members and the public to hide the fact that it's enabling illegal hotels and costing New York state tens of millions of dollars in unpaid taxes.

BOBKOFF: While the vast majority of its hosts may be small time, the fact remains that some of the company's revenue does come from what amount to illegal hotels, people who rent out multiple rooms year-round. Recently, the AG's office served Airbnb with a subpoena, asking the company for data about its New York hosts. Airbnb has vigorously fought it. Mittenthal says the company is just blocking the state's efforts.

MITTENTHAL: We believe on behalf of highly profitable illegal businesses that make up a huge chunk of their corporate revenue, not the average user who rents out his apartment from time to time.

BOBKOFF: There are many ways Airbnb hosts can break laws. Like in many places in New York, if you rent out a room for less than a month, then it's probably illegal unless you're home, too. Then it's probably legal. But rent out your place for more than 14 days a year, then you have to pay hotel tax. This patchwork of laws is Airbnb's argument for reform. And Hantman of Airbnb admits many of the company's users are breaking the rules.

HANTMAN: Technically, under the law, there are some hosts in New York who are violating the law, of course.

BOBKOFF: But technically breaking the law is breaking the law, says the attorney general. At the heart of these fights between Airbnb and lawmakers is this question. Is Airbnb actually a good thing for cities and their residents?

SARA HOROWITZ: These kind of blanket laws are just really not the answer.

BOBKOFF: Sara Horowitz heads Freelancers Union, which advocates for independent workers. To proponents like her, Airbnb is part of an idealistic new way of life called the sharing economy, where we all earn extra cash renting our cars, homes and skills.

HOROWITZ: So I will put my apartment up. I'll craft. I'll do other kinds of things.

BOBKOFF: But lawmakers and officials say there are good reasons for these laws. Apartments don't have the same safety standards as hotels. The laws guard against transient guests, who may party at night or vomit in the halls - actual complaints, the city says. And those operating like hotels take much-needed apartments off the market.

But to those who survive on their Airbnb income, Horowitz thinks this is a new normal. I asked her what freelancers would do if services like Airbnb are outlawed for good.

HOROWITZ: I think they would do it anyway.

BOBKOFF: And, supporters of Airbnb have launched a petition drive to try to change laws in New York and around the world to make them more hospitable to its service. One has more than 230,000 signatures. Dan Bobkoff, NPR News, New York.

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