Airbnb to Work With Cities Amid Efforts to Regulate Home Sharing

The Airbnb app is displayed on a mobile device.

The Airbnb app is displayed on a mobile device.

Photographer: Andrew Harrer/Bloomberg
  • Company promises it will `pay its fair share of taxes'
  • Startup says it contributes almost $6 billion in 5 top cities

Airbnb Inc. pledged to join with local governments and improve transparency as it faces scrutiny from hotels and policy makers who argue the home-sharing startup is driving up rental prices and failing to pay taxes like the hotel industry.

The company on Wednesday released the “Airbnb Community Compact,” a statement outlining its plan to cooperate with cities, and defending the positive economic impacts of its business.

“We will partner with individual cities to address their policy needs, and work with cities to help ensure the efficient collection of tourist and hotel taxes,” the company said in its statement. “We will also release regular economic activity reports in key markets.”

Airbnb said its short-stay home rental service has contributed $5.82 billion in economic benefits in five of its most-active cities: $1.96 billion in New York, $1.95 billion in London, $890 million in Los Angeles, $510 million in Berlin and $510 million in San Francisco. The company said those calculations include money that hosts make on Airbnb and its estimates for guest daytime spending during their visits.

Hosts’ Benefits

The San Francisco-based business, founded in 2008 and now operating in more than 34,000 cities globally, said it is “expanding the economic pie” for ordinary Americans by allowing the average host to generate the equivalent of a 14 percent annual raise.

The startup said it will release economic data to demonstrate the value of its home-sharing model. The annual reports will include information such as the company’s total economic activity, the average income earned by hosts and the geographic distribution of listings.

Airbnb defeated a San Francisco ballot measure last week to limit its service as a surge in highly paid technology workers has driven up housing prices and sparked protests over income inequality and evictions. The legislation would have imposed a 75-day-per-year limit on Airbnb rentals and forced hosts to register with the city. The company spent $8.4 million to defeat the measure and hired Chris Lehane, a former White House crisis manager, to spearhead efforts to block regulations that could impede its business.

The startup has mostly gotten along with municipal officials. Airbnb has struck deals with Paris, Chicago, San Francisco and others to collect taxes on behalf of the hosts using its platform. In the community compact, the company said it will share more data with cities, prevent some hosts from renting out multiple units and make sure taxes are paid.

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