The Downsides of Airbnb
The now decade-old Airbnb has changed so dramatically over the last few years that it’s hard to remember how the platform once began. What started as an innocuous home sharing website capitalizing on the gig economy — where moms and pops could rent out spare space to help pay the bills — has now grown into a corporate behemoth worth some $30 billion.
While the platform is still sometimes used to rent out spare rooms to wanderlust strangers, the vast majority of hosts are now large real estate investors. In Sydney, top hosts own over 60 rentals each. In New York City, just 6,000 of the city’s 50,000 hosts earn 30% of the revenue.
Inherently these statistics don’t sound harmful, but the downstream effects are extremely palpable. Entire homes and apartment blocks are now listed full time as short-term rentals. Huge swaths of cities that were once available for middle class or middle-income residents to live in permanently have been revamped and tailored solely towards the vacation rental marketplace.
In effect, hundreds of cities across the world have seen rising rents, rising home prices, economic and social disruption, a decrease in affordable housing, and the impacts of gentrification on urban neighborhoods.
Response of Local Governments
Responses by city governments around the world have been harsh. Hosts in Amsterdam can now only rent their listings for 30 days per year, Mallorca (Spain) and Charleston (South Carolina) have tried to implement outright bans. Meanwhile, San Francisco and Washington D.C. have cracked down on Airbnb with hefty taxes and registration laws.
However, these regulations have been messy and they’ve varied in success rates. Implementation hasn’t always been swift, and true oversight has been tough to tackle. What’s more, the revenue generated from taxes and registration goes straight to government agencies that aren’t always transparent about how those funds are getting redistributed.
Introducing Fairbnb: Transparency and Legality
Enter Fairbnb — the company looking to create an alternative to Airbnb. In knowing that government crackdowns are often controversial and ineffective, Fairbnb offers a market-based ethical alternative for local communities. The company is looking to revamp the vacation rental industry in three main areas: transparency, co-ownership, and added value for neighborhoods.
In terms of transparency, Fairbnb plans to strictly enforce the ‘one host, one home’ policy. Hosts will be heavily vetted prior to listing their site, and taxes will be paid at local levels. Fairbnb hopes these policies will disincentivize people from investing in buy-to-let real estate.
Cooperative Rather Than Corporate
The second factor that sets Fairbnb apart is the fact that it will be owned and operated by people in local communities. Salaries in the co-op style business will be limited, and it will essentially exist as a platform for community members to come together to collectively decide how they want to operate. When it comes to combating the higher rates of gentrification and empowering poorer residents, this aspect of Fairbnb could potentially instill change.
Commission-Funded Community Projects
Lastly, perhaps the most powerful impact from Fairbnb will come from its commission-funded community projects. Starting in 2019, 50% of the commission generated by Fairbnb will be redirected towards local projects that range from building green spaces and playgrounds to affordable food co-ops and community cafes. Fairbnb is thus equal parts a revenue stream and a philanthropy tool.
Current Status and How to Get Involved
Fairbnb is scheduled to launch in January of 2019 in the four pilot cities of Amsterdam, Barcelona, Bologna, and Venice. These cities presented themselves as good candidates because they’ve been hit hard by recent waves of gentrification and also because local residents have expressed an overwhelming interest in finding an alternative. If you’d like to get involved, pre-register your home or apartment on Fairbnb, consider funding the effort, and keep your ears open for when Fairbnb comes to your city.