Caught off guard by the surging popularity of the “sharing economy,” governments have struggled in recent years to adapt the rules they developed for taxi and limousine services to ride-sharing outfits such as Uber and Lyft. Now a new front is opening in the regulatory battle, as the state Legislature and numerous cities train their sights on room-sharing services such as Airbnb and Vacation Rentals by Owner. Arguing that local governments don’t have the resources to stop illegal short-term rentals, proposals in the Legislature and a handful of cities around the state would require Airbnb and its rivals to become de facto code enforcers. There’s a role for room-sharing services to play in helping cities manage the problems posed by short-term rentals, but that’s not it.
That’s one way to deter landlords from depriving the city of much-needed permanent housing by converting apartments into unregulated hotels. Where the proposal goes off the rails, though, is in requiring the room-sharing companies to regularly report to city officials who’s listing properties at what addresses, along with the number of days each property has been rented out and the price paid. That would set a dangerous precedent for forcing private companies to monitor the behavior of their customers on behalf of the government. If it’s good for Airbnb, why not require automakers to have their cars generate reports for the police whenever they’re driven faster than 70 mph in California, the highest possible legal speed? Or require contractors to alert the city when they’re asked to build an addition that’s too large?
Online rental services can and should do more to help cities collect the transient occupancy taxes that hosts should be paying, as Airbnb has agreed to do in three California cities. And they can make it easier for local governments to use their sites to track down units that aren’t legal. But if lawmakers try to turn them into arms of the government, people will quickly shift their rentals to other sites such as Craigslist that aren’t equipped to collect their data. Such a move won’t make these rentals any less popular, it will just make them harder to regulate.