Airbnb is a well-known example of a company that promotes the sharing economy. This platform markets itself as a company that enables house owners to share their house, make money and meet new people. Sounds very promising, right? But things might be less auspicious than it seems…
I have to admit: the founders of Airbnb did a great job, they disrupted the hotel industry within a few years. But the founders probably didn’t expect that the social structure of a city would change dramatically due to a growing number of Airbnb stays. An example of such a city is Amsterdam, the documentary ‘Slapend Rijk’ of VPRO Tegenlicht gives an excellent overview of the situation in this city.
The popularity of Airbnb caused huge problems in the city center, the property prices increased with an average amount of €100,000. The consequence is that Chinese and Russians are buying these properties as an investment, their only intention is to rent the property on Airbnb. The balance between tourism and residents is disturbed and also nuisance is increasing (think about screaming tourists and clanging trolleys). In order to reduce nuisance, Airbnb signed an agreement with the municipality of Amsterdam in 2014. This agreement should reduce illegal rentals (limited to 60 days/year) and would force Airbnb to pay taxes (5%), but Airbnb didn’t want to share the data of their 18,000 owners.
The agreement didn’t solve the problems, so the residents and municipality are seeking other ways of reducing nuisance of Airbnb renters. They are e.g. hiring detective agencies to catch owners who rent their property illegally. Furthermore, GroenLinks Amsterdam (a political party) started a website called ‘Fairbnb’. This website pays attention to the problems in Amsterdam regarding Airbnb. It’s also possible to report a complaint or to come up with possible solutions to solve these problems.
The easiest solution for tourists, residents and investors is: go to Rotterdam! Another idea is that Airbnb changes their way of doing business. They need to take the social structures of a city into account by monitoring the rentals and by adhering the agreements with important Airbnb cities. The municipalities could improve the situation by forcing owners to register their house if they want to rent it (on Airbnb). There is nothing wrong with renting or sharing your house, but it should be done correctly.
Sources:
http://www.vpro.nl/programmas/tegenlicht/kijk/afleveringen/2016-2017/slapend-rijk.html
http://www.vpro.nl/programmas/tegenlicht/lees/bijlagen/2016-2017/slapend-rijk/airbnb-in-nederland.html
https://www.groene.nl/artikel/een-luchtbedje-met-ontbijt
https://www.fairbnb.amsterdam/
Government measures are needed!
A huge advantage for Amsterdam is that Airbnb has a strong positive effect on the tourism’s economic benefits. Studies have shown that tourists staying in AirBnB homes spend more money during their visit and stay for a longer period of time compared to tourists staying at hotels. Airbnb guests stay an average of 3.9 nights compared to the average hotel guest that stays 1.9 nights. Airbnb guests spends an average of €792 while hotel guests spend €521.
However, there are some serious downsides for the city of Amsterdam (partially) caused by Airbnb as mentioned in the original blog post. I propose two measures that can reduce the problems in Amsterdam due to Airbnb and potentially even solve them.
The municipality of Amsterdam and Airbnb came to an agreement that resulted in allowing 60 days of illegal renting per year. Why would the Dutch government even allow illegal renting at all and at the same time hire detective agencies to catch home owners that illegally rent out their home? Quite the contradiction. In my opinion the government should prohibit every form of illegal renting.
As to the problem of Chinese and Russian investors, it is crucial for the government to obtain data of the 18,000 home owners registerd to Airbnb in Amsterdam. By doing this, the government can get insight in the percentage of foreign investors buying homes solely intending to rent them out on Airbnb. Then the government must set a maximum percentage/amount of foreign home owners renting out their property on Airbnb. By doing so, the municipality of Amsterdam can protect the accessibility of Amsterdam for Dutch people.
Finding a place to live in Amsterdam is becoming harder and more expensive nowadays. This is partially the result of Chinese and Russian investors buying up properties in Amsterdam. So, in my opinion the government must set a maximum to this amount.
It is clear that Airbnb brings in a lot of money for the city of Amsterdam through tourism which is a great thing. But the disadvantages Airbnb brings along must be dealt with rather sooner than later. The government must take firm action that forces Airbnb to change the way they do business in Amsterdam.
http://blog.airbnb.com/economic-impact-airbnb/
http://www.vpro.nl/programmas/tegenlicht/kijk/afleveringen/2016-2017/slapend-rijk.html
https://www.fairbnb.amsterdam/
Interesting article Vishal! Personally, I also love and hate Airbnb at the same time. The idea of a sharing economy is great: you meet nice people and save some money. In case of car sharing (etc.) it is also great for the environment which is of course even better. However, I noticed that many apartment or even hotel owners pretend on Airbnb that their rooms are spare rooms at the homes of locals while they are just normal hotels. I also noticed that the prices of rooms keep rising because of this. I think this ruins the whole idea and is just misleading. Improved and compulsory registration could indeed be an idea. Still, I don’t think that the situation is already as bad that whole cities are crowded with Airbnb’s. At least not as bad that you actually notice a change over the past years.
Great article! As a resident of Amsterdam, I can say that tourist nuisance indeed is a big problem in Amsterdam, and is only getting worse. This is not only visible in the coffee shops and other touristic areas in Amsterdam, but also in the outskirts. It is an easy and great idea of temporarily renting someone’s house, for an affordable price. This is also a great way of accommodation, because if you get your hand on a nice place, you can stay in a big house in a perfect location.
It is understandable that Airbnb does not want to share their owners’ data. Knowing the Dutch government, they might use this data and come up with new tax payment laws and so on. If Airbnb decides to share their platform user’s information, the users will lose their trust in Airbnb. Once owners lose their trust in the platform, the platform might even stop existing. Thus, sharing their information might kill their business. The alternatives you gave are good ones, but I think that this will be very complicated due to different (weak) legislations which platform often can outrun.