Strangers Next Door: The Future of Airbnb

When the gunshots shattered Halloween’s festival feeling, leaving five dead on a sheltered Orinda street, the rush to judgment began before the echoes died away.

Surely, there must be someone to blame. Surely, such tragedies can be avoided. Surely, there’s a simple solution.

But as emotions cooled and facts emerged, the responses to the out-of-control party on Lucille Way became much more nuanced. Yes, it was an Airbnb one-night rental in a home without a permanent resident. And yes, it had been advertised on social media as an all-are-welcome party and attracted some 100 young revelers from across the region. And of course, Orinda’s residents, police, and city government were left to clean up the mess.

However, should that cleanup include sweeping Airbnb out of the city entirely? And should other cities follow suit in the wake of revelations about violent incidents at Airbnb rentals all over the country?

Or does Airbnb provide an invaluable service to homeowners, travelers, and local businesses? And could its platform be modified to limit the dangers of having a rotating cast of strangers living next door?

Tanya Caragol, who lives on Knickerbocker Lane just up the street from where the shootings took place, was shaken by the tragedy. "The bubble is burst," she says of her prior feelings of suburban safety. "I went through minor PTSD, to be honest. It was very traumatic. There were still bloodstains on the door the next day."

Although five arrests were made two weeks later, charges were eventually dropped—despite a crime scene described by one investigator as a "bloodbath." The Contra Costa County District Attorney’s Office, however, could not justify going to trial because no clear picture has emerged of what actually happened.

The Contra Costa County Sheriff’s Department, which made the arrests in cooperation with other law enforcement agencies, is still continuing its investigation, and a sheen of normalcy has returned to Lucille Way.

In fact, the Caragol family expects to keep finding vacation rentals through Airbnb. "We use them all the time," Caragol says. "They’re cheaper than a hotel, and there’s a kitchen. Sometimes you just like to have breakfast."

"It’s one of those tough ones," says Sandra Tarasow, who lives in neighboring Moraga. There are 19 Moraga homes listed on Airbnb and HomeAway, according to AirDNA, a website that tracks short-term rental data. Naturally, Tarasow would not want one of those next door.

"To be selfish, which I am about my family, I wouldn’t like it," she says. "It’s denial that something like what happened in Orinda couldn’t happen here. But as the consumer, I like it. I’ll continue to use it."

Pleasant Hill’s Michaela Jarvis and her family are also short-term rental customers. "When we were traveling with a teen, we were either all in the same hotel room or renting two rooms," says Jarvis, a longtime Diablo contributor. "Airbnb fit our needs really well. I do like this way of traveling, but it could be regulated more. It’s one thing to stay in someone’s house to visit an area; it’s another to have a massive rager. Regulation has to catch up."

 

Is Regulation the Answer?

Ironically, Orinda was and is one of the East Bay cities that does have some regulation for short-term rentals. "We require hosts to register with the city," vice mayor Darlene Gee says, referring to a 2017 rule, which doesn’t seem like much but is a lot more than most cities require. "We do have information; we know where they are, and we can set standards."

After the shooting, immediate emotional reactions criticized Orinda for not having done enough to prevent the incident. But Orinda was singled out while other cities, such as Moraga, have no regulations for short-term rentals (though the Moraga Town Council plans to discuss it this year, according to council member Renata Sos).

In Pleasanton, where 86 short-term rentals are available, they are officially prohibited. But mayor Jerry Thorne isn’t too concerned. "If we have a complaint, we send out a code enforcement officer," he says. "But we haven’t had any requests from the public to have any regulations." In Walnut Creek, with 186 rentals (per AirDNA), plans call to manage them as if they were bed and breakfasts, though the discussion has just begun.

In short, there has been a wide range of responses to the Orinda shooting and short-term rentals, but no consensus has emerged on the best way to handle the issue.

"The kneejerk reaction [to ban short-term rentals] doesn’t stop the behavior," Gee says. She is looking at modifying the regulations to perhaps require guests to stay a minimum number of nights (thus making it harder to rent out a "party house") and only allowing primary residences to host short-term rentals. "There’s a lot on the table between what we have right now and an outright ban," she says.

But why should understaffed cities have to police these rentals? Shouldn’t Airbnb be doing the work?

"Every company has a duty of care," says Christine Chalmers, who, like Caragol, lives on Knickerbocker Lane in Orinda. "You have to do what you can do to keep people safe."

 

Strangers Next Door: The Future of Airbnb

Untangling Liability

At least 25 shootings occurred at Airbnb rentals in the United States in the six months before the Orinda violence, and robberies of both guests and hosts have also been an issue.

As a $38 billion company, it would seem Airbnb has the resources to better control its rentals, and indeed, the company unveiled a $150 million plan to improve safety in the wake of the Halloween shootings. A "neighbor hotline" for complaints, staffed 24/7; better verification of its property listings; and more focused screening of rentals will presumably make it more difficult for out-of-control parties and troublesome guests to plague the system.

But naturally, as a profit-making company, Airbnb has to balance its bottom line with its regulatory responsibilities—and one result is that Airbnb is shrinking its footprint in the United States, according to Nadia Michelidaki of Keybee Hosting, a Berkeley business that manages short-term rentals for property owners.

The greater the regulation, after all, the greater the expense and paperwork required to keep up with the regulation, and the harder it is to do business. And like Uber and Lyft, Airbnb created and occupied a commercial niche that hadn’t existed before, so its growth was largely unhampered by any kind of official supervision. Now that there’s more supervision, expansion becomes more difficult.

Still, it’s tricky for governmental agencies to restrict Airbnb, as the Communications Decency Act of 1996 shields "information providers" such as Airbnb from responsibility for publishing false information from other sources. In short, even if a host (or guest) lies about his or her name, background, or intent, Airbnb cannot be held liable.

Because of that federal law, among others, states have been wary about passing legislation regulating short-term rentals, which means that it falls upon cities to do the dirty work—though there is some logic in that approach.

"I see this as a local choice," says State Assemblymember Rebecca Bauer-Kahan, who represents Orinda in Sacramento. "The same thing won’t work for Orinda the way it does in Fresno or San Francisco."

On the other hand, that means cities like Orinda—or Moraga or Walnut Creek—are negotiating with a huge company that does business in more than 220 countries and regions and 100,000 cities, and has an on-staff legal team to handle regulatory discussions.

Chalmers believes this to be a problem. "On the enforcement side, the state needs to be involved," she says.

There is an ongoing attempt by San Diego County Assemblymember Tasha Boerner Horvath to regulate short-term rentals throughout the state. Last year, AB 1731 survived several committee hearings in the California Assembly but was withdrawn. It will likely be reintroduced this year with modifications. The previous version would have created two categories of short-term rentals: one for those who live in their homes at least 270 days per year (an on-site property owner) and another for those who don’t. On-site property owners would be able to rent out rooms or separate units as much as they like; off-site property owners would be limited to 30 rental days per year. In addition, it would require short-term rentals to pay the various tourist taxes many cities impose on hotels, something that happens only sporadically now.

Still, even without more regulation and widespread tax revenue, Airbnb brings a lot of value to cities and surrounding areas. "It’s a revenue source, and it has all kinds of benefits," says Steve Reiser, an Airbnb host in Walnut Creek. "It’s been wonderful," he says of his four-and-a-half years as a host. "It’s allowed me to slow down a bit."

But also, Reiser points out, "It certainly benefits the city and the businesses of the city," as Airbnb guests spend more than just time in the cities they visit.

"More money is going into the community," says Michelidaki. "It’s going to housekeepers, Uber drivers, and grocery stores."

Matt Middlebrook, Airbnb’s head of policy in California, notes that the company spreads out the tourist dollars that are so important to the state’s economy. "Airbnb has allowed people to stay in all parts of San Francisco," he says. "In West Portal, for example, merchants did not benefit from tourism before Airbnb."

And suburbs like Orinda, Moraga, and Walnut Creek now also grab a portion of those tourist dollars, as visitors sometimes prefer to base their vacation stay some distance from the hustle and bustle of a big city.

 

Homeowners’ Rights

Then there’s the obvious: "People are now able to use their homes to pay the bills," Middlebrook says. There is a certain resonance in the argument that homeowners should, within limits, be able to do what they like with their properties.

This leads back to one of the original attractions of Airbnb, and one that makes too much sense to disappear: seasonal rentals.

A homeowner takes off for Lake Tahoe for a month of skiing—shouldn’t she be able to rent out her house while she’s gone? And where is she staying in Tahoe? Maybe at an Airbnb owned by someone who wants to spend a few weeks away from the snow?

Let’s not forget that, even if Airbnb were to vanish tomorrow, there would still be short-term rentals. Craigslist, for example, would be an easy Plan B for homeowners, and that makes Airbnb’s issues with identity checks seem staid in comparison to the risks in the unvetted country of Craigslist.

Verification is one of the most contentious issues, with Airbnb and its critics battling heatedly over this topic, as neither guests nor hosts have any way of knowing whom they’re really dealing with. Airbnb’s registration is far from airtight, relying on cell phones and social media rather than social security numbers, but the company digs in its heels when asked to upgrade its procedures. The company’s claim is that many Airbnb users lack government identification and requiring social security numbers or similar IDs would limit access.

Walnut Creek host Reiser adds his own layers of verification for potential renters, and any host can do the same. "If you don’t feel comfortable, just say no," he says.

Both guests and hosts can also use Airbnb’s rating system, which theoretically makes it easier to see which guests, and which places, could cause problems. Still, even that system isn’t as efficient as critics would like, and the push continues for Airbnb to be more transparent and more responsive.

The fact that many people’s most valuable resource is their home—and that generating income from that resource can make a difference in their lives—means short-term rentals are clearly here for the long term.

The question, though, is how to balance the dangers and the opportunities, and the nuisance and the income, to maximize the benefits and minimize the problems.

"It’s very hard to make laws about every aspect of human behavior," Gee says, as she and the Orinda City Council continue to grapple with the issue. But after the death of five people amid blood and bullets on a secluded suburban street, the search for that elusive simple solution has just begun.

In the meantime, many people who would be upset with an Airbnb next door will still be logging onto the website when vacation time rolls around.