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SEIU and Airbnb, Revisited

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The proposed agreement between SEIU and Airbnb collapsed under withering attack from other unions and the San Francisco left.

In a statement obtained by the Guardian on Thursday afternoon, SEIU said it does not have an agreement or deal with Airbnb and that it plans to work with Unite Here, a separate union that represents hotel workers and has strongly criticized the potential SEIU-Airbnb partnership.

“Representatives from SEIU and [Unite Here] met and have agreed to find a common approach to protect and expand the stock of affordable housing in all communities across the country and to protect and preserve standards for workers in residential and hotel cleaning while also growing opportunities for these cleaners to improve their lives,” SEIU’s statement said.

Unite Here welcomed SEIU’s decision to back away from a deal with Airbnb. “It is our clear understanding that SEIU will not have a deal with Airbnb to represent housekeeping services,” said Unite Here spokeswoman Annemarie Strassel.

Strassel continued: “[Unite Here] will continue to vigorously oppose any efforts by Airbnb to expand and push for commonsense laws to mitigate the devastating impact this company has had on our communities.”

Under the terms of the proposed deal, Airbnb reportedly would have endorsed a $15-an-hour minimum wage effort backed by the SEIU, directing hosts to use cleaners who were paid the minimum rate and trained and certified in “green home cleaning services”.

I still struggle to see the big problem with such an agreement. Airbnb is not going away, it’s not a major factor in rising housing prices, and it hasn’t led to hotels having vacant rooms. That’s not to say there’s not problems with Airbnb, including minor contributions to the above problems, customer safety, and the outsourcing of risk to independent contractors. But moving Airbnb toward promoting something like union work is not a terrible thing. Airbnb or similar companies are not going away and unions will need to figure out what to do about it. There may well have been problems with the proposed deal, but I’m not really seeing it.

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  • LeeEsq

    It seems to be a classic case of letting the perfect be the enemy of the good. AirBnB like services existed before AirBnB. The last time I was in France, I stayed in a person who was out of the country’s apartment that was arranged through a broker. People who are going to be away for long time would like to monetize an asset like a Parisian apartment. What AirBnB does is make things easier to organize and arrange and actually provides a better guarantee of reliability I guess.

    • Davebo

      Agreed. AirBnB is nothing new, it’s just better, more efficient. It and other organizations like VRBO are just streamlining a system that’s existed for decades and bringing more value to both the owner and the temp tenant.

      Supporting a $15 minimum wage for support help and fostering environmentally friendly practices in housekeeping seems to be a substantial offer.

    • Honoré De Ballsack

      That’s not to say there’s not problems with Airbnb, including minor contributions to the above problems, customer safety, and the outsourcing of risk to independent contractors.

      AirBnB’s entire business model is based on doing an end-run around existing laws governing hotels and sublets. It’s not being paranoid to consider that–when it benefits their bottom line to do so–they might be equally opportunistic in relations with their workforce.

      • LeeEsq

        The previous system wasn’t exactly legal either many times.

      • Well, sure. That’s why bringing unions into the mix would be a positive thing, even if it is just suggesting housekeeping services.

      • djw

        That’s not wrong, but there’s always been a short-term rental market that in many cities didn’t fit well with regulatory structures and operated informally. LeeEsq is right that the actual economic activity Airbnb is facilitating is not new.

        • Juicy_Joel

          Sorry, but I don’t remember people trying to rent public recreational land to tourists on the internet before AirBnb.

          http://www.civilbeat.com/2016/04/we-cant-let-airbnb-commercialize-hawaiis-beaches/

          • Sebastian_h

            Really? The old “I’ve got a bridge I can sell you” line goes back to the 1800s. And that was sell, not rent. I’d love to see the reviews on those sleeping bag rentals…

          • djw

            Well, no, the scam of renting out something you don’t actually own isn’t wholly new to airbnb; I know of one case of a fake landlord renting out an abandoned home he didn’t actually own back in college. To state the obvious, the particular portal used to perpetuate the scam isn’t the issue here, it’s the scam itself. The rentals could just as easily have been done through craiglist or whatever.

            • The Temporary Name

              I have a vague recollection of travel arrangements made via Usenet.

            • Juicy_Joel

              Craigslist doesn’t collect and distribute revenue from illegal rentals like how AirBnB does, that’s a pretty big difference!

              Everyone has heard of people renting houses they don’t own on craigslist, craigslist isn’t making $ taking a cut of such listings!

              • The Temporary Name

                Craigslist does in NYC, and I imagine that’ll spread to other cities just as charging for job postings has.

                • Juicy_Joel

                  So you have no problem with AirBnB (or craigslist) facilitating and profiting off “hosts” renting public beaches and campsites because “people used to do it before”.

                  Awesome!

                • The Temporary Name

                  So you have no problem

                  It’s likely I’d remember writing something like what you’re going on about, and if someone were to gently remind me, taking note of my sometimes faulty memory, I might be able to scroll up and find myself enlightened. It doesn’t seem to be the case this time, fuckface.

                • Juicy_Joel

                  Fuckface? lol Come at me bro.

                • The Temporary Name

                  I thought it was funny, so an LOL is fine by me.

                • djw

                  Speaking for myself, I’m entirely open to considering an argument that airbnb should do more to prevent con-artists from using their platform, and perhaps that legislation to compel action in that regard might be justified. (With the caveat, of course, that compelling companies to turn over information about clients to authorities without a warrant has real costs for privacy, so we really should proceed with caution.) But it’s silly to pretend the fraud is really about airbnb–they’re just a tool. I don’t expect anyone would have held, say, a newspaper as the primary responsible party for a fraud advertised through its classified ads. There’s no good reason I can see to make that story fundamentally about airbnb, rather than the fraudsters themselves.

  • My initial concern was the possibility of Airbnb using divide and conquer tactics, as I trust any of these companies about as far as they can be thrown, but perhaps Unite Here had legitimate concerns that were not being addressed by the SEIU agreement.

    • Sebastian_h

      Divide who from whom? Conquer what? I understand that the company isn’t well liked (though for things like housing prices it is functioning as a scapegoat). I don’t understand the nature of the threat. It looks like they were branded “too evil to talk to” but then why talk to GM or Exxon?

      • I dunno. I admit to some System 1 thinking there, just my gut feeling without having dug too deeply into the story.

  • Brett

    It did appear to be unpopular with a lot of the progressive activist groups that UNITE and SEIU are trying to ally with, so I guess that’s reason in of itself. Both of them need ground support and allies.

    • djw

      I think in the Bay Area, part of the story is probably just anti-tech sentiment on the left broadly; they make a convenient and often legitimately unlikable scapegoat for a lot of problems that are actually a whole lot bigger.

      • DocAmazing

        Oh, Jesus, this again.

        AirBnB takes rental units off the (long-term) market in non-trival numbers. It’s not “anti-tech sentiment” to object to scumbag landlords evicting long-term tenants in search of quick profits and dodging legitimate hotel taxes and innkeeping regulations.

  • Whidby

    I’m not sure why you think that AirBnB is not a major factor in rising housing prices.

    I searched for whole house rentals in SF in a random week this summer. AirBnB responded with 214 listings and said that only 9% of listings were available that week, so I should book soon.

    There may be some b.s. in that statement but if its true, that means that there are over 2,000 empty houses in SF listed on AirBnB. Remember, these aren’t spare rooms where somebody is picking up a little extra money. These are entire houses/flats that are empty.

    Right now Zillow lists 804 houses for sale in SF.

    Certainly there are a certain number of people who own houses in SF who would still have a vacant house in SF for occasional use or whatever even without AirBnB, but the number of houses kept off the market because of AirBnB would appear to be significant, especially relative to the number of houses available for sale.

    • Lost Left Coaster

      There some something like 3,000 listings on AirBnB in my city of Vancouver. And our rental vacancy rate is close to 0%. Rents are rising through the roof. There are a lot of reasons for this, but the ease of taking units out of the market to put on AirBnB sure as hell isn’t helping.

    • AstroBio

      I’m don’t think I deserve an opinion on the union deal but I’m pretty sure that housing prices are affected by AirBnB in my tourist-economy town. Does anyone here have data? Or can someone point me toward data that would refute what seems obvious. I have only seen one Forbes article that argues that lack of permitting is the real issue. It is not relevant to my town where development continued right through the recession.
      Before AirBnB, you could rent your property as a vacation short-term but it typically required an agent was not straightforward. Now that it is so easy, everyone does it. My neighbors are all building tiny homes in their backyards to cash in.

      • Sebastian_h

        Building lots of tiny homes will tend to lower housing costs on average which is a good thing. And if 100% of them are building for ABnB exclusively, that still doesn’t negatively effect the housing market unless you believe they would have built those tiny houses to rent to full time people without ABnB. So I’m not understanding the question you want to get at.

    • Sebastian_h

      The yearly shortfall in building units to stay even in housing costs since the mid 1990s is estimated in the 5,000-10,000 (in the city of SF proper, outlying areas need a bunch too). In order to make a dent in the housing costs you need to be well into the upper end of that range. So even if we are giving you every single of the 2,000 houses, it isn’t even at half of the YEARLY shortfall in building. That yearly shortfall in building has been going on 15-20 years, so you are talking 75,000-200,000 units at this point. That isn’t even to get it to actually affordable, that is to get it to 1990s affordable which was already ridiculous.

      So even if we give your argument every single one of those 2,000 listings as people who purchased a house in SF to rent it out like a hotel, or people who would sell/long term rent it if they couldn’t rent it out on ABnB, you are talking about 1-2% of the shortfall. On that alone it looks like enough evidence that ABnB isn’t a major factor.

      But it is almost certain that you can’t take all those listings.

      First, ABnB has people who are out of town on vacation renting out their residence as a large portion of their business. Maybe SF is dramatically different, but even in SF it is likely to be a large portion unless you have statistics suggesting otherwise.

      Second, the history is all wrong. We are at the highest point of ABnB exposure in the last year. It wasn’t even half that 5 years ago. The crisis was already well under way 15 years ago and a disaster 10 years ago.

      Third, there is very little evidence of wholesale ABnB abuse in the sense of renting out your place full or near full time. (The only troubling case). The SF Chronicle investigated in 2015 and found that about 2/3 of the listings only had one review, strongly suggesting that they had only be rented out a very few times. They found about 300 that looked like they were being rented very frequently. Even if we tripled that in a year (which seems unlikely to me) we are at under 1,000 out of a shortfall in the 100,000-200,000 range. So 0.5%-1% if we give the ABnB is causing a problem argument maximum leeway.

      That just isn’t a big deal compared to the housing restrictions.

      Edit, SF Chronicle link

      • djw

        Also it seems to me some non-trivial portion of Airbnb rentals seem to be a spare bedroom in a home currently occupied; some people might be willing to rent that room out occasionally, but not interested in a permanent full time roommate.

        • The Temporary Name

          In areas where real estate value is high (and rent is high) people set up secondary suites to pay the mortgage. Steady payments are a big deal and reliance on AirBNB isn’t always helpful unless your property is fucking awesome.

          • The Lorax

            So in addition to taking housing stock that otherwise would be sold off the market because it’s turned into a hotel, it allows for higher prices because more people are able to pay more for a house because they always rent out a room? This looks doubly problematic.

            • Sebastian_h

              For about 300 units in San Francisco. Is this the progressive version of worrying about in person voter fraud and wanting voter ID laws to fix the problem?

        • Sebastian_h

          And in that respect, ABnB is essentially helping ease some of the housing crisis by making the residence more affordable.

  • Sebastian_h

    Each side has their own characteristic tics which irritate me, and this illustrates my frustration with progressives.

    If your beef with ABnB is that it doesn’t pay hotel taxes fine though you’re out of date with most major cities where it does pay taxes) fine, work to get it to pay hotel taxes.

    If your beef with ABnB is that it is causing housing to be too expensive in SF and NYC, you are focusing on a sliver instead of something real like building more or dealing with the style of rent control which interferes with investment.

    If your beef with ABnB is that it is stealing from hotels in SF and NYC, you’re effectively suggesting that poor people not be able to travel there, you’re subsidizing hotels that don’t have enough capacity to fulfill the needs already, and you’re attacking a platform not the underlying practice.

    None of those explanations make sense when the question is “should a labor union be in negotiations with them?”.

    The only explanation appears to be something like “they are uniquely odious and even talking to them is bad”. But that can’t be it, because almost any other major company I can think of is at least as bad. Is ABnB worse then any of the oil companies, car companies, mining companies, or even hotels? And we would be happy for unions to be deeply engaged with any of them right?

    So what’s the deal? (Other than UNITE likes to screw with SEIU every chance they can because the leadership hates each other).

    • Lost Left Coaster

      Heads you’re wrong, tails AirBnB is right. Got it.

      • Sebastian_h

        Well then make the case. Why is ABnB a company so bad that unions can’t deal with it? What makes it worse than Monsanto or Exxon, or Haliburton?

        • Lost Left Coaster

          If the SEIU was organizing AirBnB’s employees, I would be 100% in favour of it, as I am always in favour of organizing workers. But that is not what was happening here. Rather, they had some vague deal that AirBnB would recommend unionized cleaners to the people who list on AirBnB who, if most of the comments in this thread are to be believed, are merely all grandpas and grandmas who have a spare room to let every once in a while and surely are not hiring cleaners anyway.

          For all of their faults as a company, it seemed that SEIU was providing some positive PR to the company (“see, we care about the workers!” to distract from the fact that they throw their weight around to ensure that they are not fairly taxed, thus depriving municipalities of revenues) without getting much in return.

          • d.ahkiam

            This is my problem with the deal, which Erik and most commenters seem to ignore. No one is being organized. SEIU was getting no new members.The main benefit was a Fight for Fifteen endorsement, which achieves???

    • djw

      If your beef with ABnB is that it is causing housing to be too expensive in SF and NYC, you are focusing on a sliver instead of something real like building more or dealing with the style of rent control which interferes with investment.

      As an addendum to this, it’s noteworthy that many of the same people who seem confident Airbnb is a major factor in screwing up the housing market are the same people who are deeply skeptical of the “make it easier to build a lot more housing” proposal to the housing shortage, because supply/demand is just econ 101 BS and it doesn’t work here for the following 17 reasons, with surprisingly little cognitive dissonance.

      • UserGoogol

        I feel like one factor is that people on the left often have a rather pessimistic attitude towards markets: supply and demand has an impact only when it hurts the working class, not when it could help them. So reducing supply leads to evictions, but increasing supply just gets taken by speculators. Which has a grain of truth to it, (I mean yeah, of course the powerful take advantage of asymmetries in marketplaces) but it’s also a great way to just shoot down all possible options.

        • djw

          That’s true. The speculation problem is sometimes exaggerated, as it’s a convenient way for people on the left to avoid admitting letting developers build more really is more progressive than not letting them, but there’s no denying it’s a real problem in a handful of markets. There’s a relatively easy policy fix–large enough to hurt tax penalties on vacant units; which lets people buy property as an investment but penalizes them if they take it off the rental market. IIRC there was a proposal along these lines for NYC, but Albany wouldn’t grant the authority.

        • Ronan

          But are these two separate questions (1) more affordable housing for those on low incomes in urban areas (2) more affordable housing in general. You could solve 2 by letting developers build more, but it doesn’t necessarily solve 1.

          What’s the solution in the US to 1? My impression is that relying on markets to provide houses to low income groups leads to greater eviction rates, rent hiking etc, so do you just build govt run social housing and reinvest income from rents into upkeep?

          • djw

            (1) more affordable housing for those on low incomes in urban areas (2) more affordable housing in general. You could solve 2 by letting developers build more, but it doesn’t necessarily solve 1.

            What’s the solution in the US to 1?

            A policy tool some US cities are starting to look to is to allow developers a density “bonus” (say, 6 stories instead of 4) in exchange for setting aside X% of units as affordable housing at some designated level. It’s far from perfect, but can do both.

            If your hope is to solve (1) through public affordable housing development, though, you need lots of (2) for a big enough tax base to do it, and to decrease the percent of the population who needs assistance. (In the US, most affordable housing programs are designed for people at 80% of AMI or less, but in the cities where the shortage is the worst, people between 80-120 or more are effectively priced out too)

            • Ronan

              “A policy tool some US cities are starting to look to is to allow developers a density “bonus” (say, 6 stories instead of 4) in exchange for setting aside X% of units as affordable housing at some designated level. It’s far from perfect, but can do both.”

              Is there a guarantee that they be rented at a below market price for the entire tenancy/for good across tendencies, do you know? My (admittedly at this stage quite unsophisticated) impression is that it’s relatively easy to skirt around affordable housing regulations in the medium /long term, that landlords are initially meant to provide affordable housing but eventually the units revert to general market prices and the low income families are moved on.

              Do you see problems with large scale social housing ?(imaging a context whee funding suburban issues would it be your solution for that problem?)

              • Sebastian_h

                It is usually a fixed term (like 10 or 15 years) which seems like a reasonable accommodation. SF has some of the strongest (or harshest depending on your point of view) rent control laws in the country with a very strong enforcement arm. It wouldn’t be easy to skirt around it in SF.

                • Ronan

                  But unless you have continual development with x amount of affordable units you’ll just get to a period in 15-20 years where the same problems arise again, and an entire demographic is priced out of the city.

              • djw

                Is there a guarantee that they be rented at a below market price for the entire tenancy/for good across tendencies, do you know?

                I think that’s the standard approach, yes. They don’t revert to market rate just because the initial tenant moves out. I think one of the Seattle proposals had a 25 year sunset and another was indefinite.

                I’m not quite what you’re asking because I’m not sure what you mean by “funding suburban issues” here. In general, affordability crises in US cities aren’t likely to be solved by public/social housing alone because it’s very expensive to build, and the political will and/or taxing authority to raise enough money to build what’s needed don’t currently exist in most cities. If your suggestion is to build large scale public housing in the suburbs to save money on land costs and stretch the dollar, two obvious problems present themselves: 1) sticking poor people in the suburbs where they’re forced to get a car is going to cut against the goal of affordable living, and 2) I’m not sure how you think you’re going to get the necessary permissions and zoning changes to do that, given the politics of your typical suburban community in the US.

                • Ronan

                  Sorry that was an autocorrect I missed . “Suburban issues ” should be “funding wasn’t an issue” ie above you seemed to.imply that a problem with large scale social housing is there’s not enough of a tax base to fund it. What I was meaning to ask was without that problem would it be a good policy or do you see a better one for providing affordable housing for low income groups specifically .
                  So perhaps clearer, are there problems you see with govt run social housing outside of the problem of paying for it

      • d.ahkiam

        I think a common thread is leftist opposition to developers profits. Or to developers as people. And it’s hard to get people to accept policy solutions that both create affordable housing and allow developers to walk away with a bundle.

        Supply/demand is a bad pitch though without engaging with how it works in housing markets. Developers excessively concentrate on luxury markets, with overly optimistic expectations for the value of their properties. They tolerate long term vacancy to preserve the paper value of their rentals. And it takes a long long time for units to trickle down to create more supply.

        Airbnb reduces supply small amounts, but it takes from affordable or rent stabilized units and upsells them as essentially luxury units when the daily rates are extrapolated.

        So…saying supply/demand is overly simplistic.

  • Gwen

    To me Airbnb seems less evil than Uber, at least they are trying to work with SEIU.

    Whereas, from an Austin proggie voter perspective, it seems like Uber’s motto is “KNEEL BEFORE ZOD.”

    (Vote no on Proposition 1!)

  • AlexRobinson

    Don’t people who rent out all or part of their homes via AirBnB break local zoning laws?

    If so, and some think that is OK “because”…I have a few laws I may want to break “because.”

    • AstroBio

      That really depends on the local zoning laws. In many places, “taking in boarders” is allowed without licensing. As soon as my son moves out, it will be completely legal for me to rent the spare room through AirBnB but only because I live in the home. Your local ordinances may be different.

    • Juicy_Joel

      Good thing AirBNB helps with zoning enforcement by refusing to provide a list of who is using the service!

  • Ronan

    I’ve Been waiting for a lead in to ask a question on a relevant topic, so I hope this isn’t too much off topic (I don’t think it is, necessarily). But since this “affordable housing” crisis seems to be hitting major urban areas across the developed world, what’s the solution ? If it’s “build more houses ” is that primarily build more social housing or remove restrictions on urban development ?
    I’ve a link to follow in the next comment (it’s not about the US but I think the position is generalisable) about the pros and cons of incentivising/encouraging people to buy their council house. What are the thoughts on the policies described ?

  • Trivial offering

    We stayed at a vrbo in Paris three years ago and the owner of the place we stayed at owned 22 apartments that were being rented short term. It’s not much of of a leap to think that airbnb like services will drive up the cost of housing in desirable tourist areas. This may have been occurring previously on a local level but it has been commoditized by the one stop shopping that airbnb and vrbo have facilitated.

    • Juicy_Joel

      In my small state 17,000+ residential properties/rooms which could house an estimated 117,000 people are being used as illegal vacation rentals. But totally not affecting the housing market at all!

      • Sebastian_h

        Would you mind naming the state? And is that 17,000+ full time or near full time rentals? It isn’t impossible I suppose, but you realize that is more than the number of listings in NYC and SF combined, and those are some of the densest ABnB places in the US. SF is estimated at having about 300 or so full time rentals as of 2015, so I’m wondering what your source is.

        • Juicy_Joel

          Hawaii. AirBnB alone had 10,000 active listings in April. Note that illegal vacation rentals aren’t limited to just AirBnB.

          http://www.bizjournals.com/pacific/news/2016/04/12/airbnb-reveals-the-total-number-of-its-hawaii.html

          • Juicy_Joel

            786,262 visitors arrived here last month, its really not so hard to believe that there are 17,000 illegal vacation rental units operating around the state at any one time.

            • Sebastian_h

              So I looked at the housing prices in Hawaii, [you can see a representative sample here] and there doesn’t seem to be a noticeable difference anywhere that could be attributed to ABnB. I see huge jumps in the late 80s, that can’t be ABnB. I see pretty steady gains after that with a huge jump 2000-2007, none of that can be ABnB. I see pretty steady gains 2012-2015 with the smallest gains in 2015. That last period is the only period where ABnB is likely to be a potential issue, with it get stronger and stronger in the last 3 years. But the smallest gains were in 2015 which would be odd if ABnB was a major factor in the market because that would be the year it had the most listings.

              Also, as discussed above, listings aren’t full time rentals. Something can be listed and not rented. So you are talking about number of people seeking to rent using ABnB.

              Further, I couldn’t find anything that said more than 10,000 listings (as of April 2016).

              Further still, there wasn’t any indication that all or even most of those listings are illegal.

              Also, vacation renting in Hawaii is practically legendary from well before ABnB. You may be attributing a common practice to the platform without recognizing the common practice.

              Your housing prices are high because it is an island state with desirable property. Lots of people seem to want to mitigate that with ABnB vacation renting. I think you might be confusing a small effect (ABnB rentals) with a totally different cause.

            • Juicy_Joel
    • The Temporary Name

      A unit in our building (which is owned by a cooperative) was rented on AirBNB. We put a stop to it (we are not a hotel and exist for people who need housing). The disturbing part for us that that the listed renter of the unit was nobody we’d ever seen before. Our member was letting out to a middleman.

  • AirBnB has made it profitable for speculators to take 6000 units off the housing market in San Francisco, pricing yet more working class residents out of the city, and has bought half the lousy politicians in town. Meanwhile it refuses to accept ordinary regulation, concealing the identity of owners who use it. It’s a scoff law company, out to only for its billionaire owners with no concept of any responsibility for the common good of the town where it makes its profits. Isn’t that just about the definition of the sort of company that needs to be tied down by democratic Lilleputians?

    Any union that hooks up with such an outfit doesn’t give a shit about working people — it too is just another racket, screwing the suckers who thought labor was on their side against the bosses.

  • d.ahkiam

    So Airbnb “suggests” union housekeepers is good enough? How is that not a capitulation to our new mass subcontracting overlords? Where’s angry unionist Erik?

    A hypothetical Airbnb and SEIU/HERE should require union housekeeping contracts for hosts with more than one rental. Or a similar compromise that pushes this in the right direction. Making a ‘deal’ that doesn’t create new members isn’t a deal any union should make!

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