After months of “investigation and study” with veiled threats coming from the office of Mayor Marty Walsh, Boston voted this week to impose strict limits and fees on people choosing to rent out a room using Airbnb to make some extra money. Everyone knew this was coming because Boston Democrats had made no secret of their agenda. Still, the limits they are putting in place to thwart the growth of the gig economy are every bit as bad as most had feared. (Boston Globe)
After months of debate, the Boston City Council on Wednesday passed rules that are designed to sharply rein in Boston’s fast-growing short-term rental business and help ease the tight housing market.
The rules, which passed on an 11-to-2 vote, are among the most stringent efforts in the nation to regulate the burgeoning industry. The rules would bar investors and tenants from renting their homes by the night through popular websites such as Airbnb, while allowing homeowners and owner-occupants of two- and three-family houses to continue to do so.
Mayor Martin J. Walsh, who first proposed the bill in January, said he will sign it into law.
For lower income renters, this outcome represents pretty much the worst case scenario. Some earlier proposals under discussion spoke of perhaps limiting the number of nights per year they could rent a room or perhaps even impose some sort of annual fee. But Boston has flat-out banned anyone who doesn’t own the property from earning extra money this way, regardless of what sort of arrangement they may have with their landlord. Similarly, if you are an investor who has a rental property you will not be allowed to rent it out on a nightly basis through the popular gig economy app. Only those who own and reside in a residence will be able to do so, and even then they will be charged an annual fee and have limits placed on rentals.
The city government still laughably claims this is a solution to a housing crisis problem. They say that there isn’t enough rental property available in the city because of all the Airbnb traffic. In reality, too much housing demand is a pretty good problem to have because it means that a lot of people are visiting your city and spending money there. Perhaps you could start issuing permits to build new housing? Naw… that would just be crazy, right?
The other complaint is that there are “too many strangers” staying for only a few nights and wandering around the streets. Of course, when those strangers stay in hotels they’re called “tourists” and that’s also a good thing for your city.
What’s really behind this move is the same thing we’ve discussed here in the past. It all comes down to the actions of lobbying groups like the American Hotel and Lodging Association (AHLA). They don’t like the competition from Airbnb and they’ve had a plan in place to try to thwart the gig economy for a while now. In 2017 the New York Times went inside the AHLA and exposed documents which described their long-term plan to crush Airbnb. The plan was described as “a multipronged, national campaign approach at the local, state and federal level targeting key markets, including Los Angeles, San Francisco, Boston, Washington and Miami.” It detailed the best way to get local government officials on their side and arguments being made by Walsh and the City Council can be found almost word for word in the AHLA documents.
Plus, it doesn’t hurt that hotel and real estate lobbyist groups like the Massachusettes Association of Realtors have been very generous in terms of campaign contributions to Boston Democrats, including Mayor Walsh. And now, once the new law goes into effect next year, they will have basically succeeded in shutting down Airbnb in Boston and stifling the competition. Isn’t democracy just swell?