In many ways, Chris Butler was the stereotypical San Franciscan: a tech startup founder who lived with his dog in a rent-controlled apartment.
Then, like an increasing number of renters in the city, he was evicted. According to Butler, his landlord told him to leave so that her husband could move into the place – an acceptable reason for eviction under the city's strict rental laws. But instead, Butler says, another tenant in the building moved into his former home, and the newly vacant apartment was listed on Airbnb, the popular web service that lets anyone rent out extra living space by the night.
As a result, Butler is now suing for wrongful eviction, claiming his landlord pushed him out of the building solely to make some extra money. According to Butler, his landlord is listing the apartment on Airbnb at $145 a night. If the place is booked at that rate each and every day, the return is more than $4000 a month, or well over twice what Butler says he was paying. "I have nothing against Airbnb. I think Airbnb is a revolutionary product," Butler says. "[But] there's always the opportunity for people to take advantage."
‘I have nothing against Airbnb. I think Airbnb is a revolutionary product. But there’s always the opportunity for people to take advantage.’ Chris Butler
An attorney for Butler's landlord didn't immediately respond to messages seeking comment. But he has told the San Francisco Chronicle that his client did nothing illegal, asserting that a family member did move into Butler's unit.
Regardless of who prevails in Butler's case, his story shows the dark side of "the sharing economy," a place where sharing is more likely to mean conflict than cooperation. Services like Airbnb and Uber can make the world more efficient, instantly matching people with available rooms and car rides. But the runaway success of such tools has unleashed waves of change in local economies, pitting not just businesses against regulators, but neighbors versus neighbors. As sharing becomes big business, it's also losing its innocence.
According to Airbnb, its service is primarily a way for people to rent out their empty homes when they take a vacation or go away for the weekend. The company says that 90 percent of its "hosts" rent out their homes only on an occasional basis, that much of the money they make goes to pay their basic living expenses, and that the spending from "guests" benefits local economies. But the rampant popularity of the service also means that some will use it as a way to become full-time innkeepers, something that can change economies in other ways. There's some serious profit potential there, and some people are going to take it.
Chris Butler's story is particularly charged because he's in San Francisco. Resentful that the influx of tech money has pushed up demand for housing in the city – and rents along with it – activists are venting their fury on the Google buses that ferry workers from San Francisco to Silicon Valley. Some also argue that Airbnb and similar short-term rental services only exacerbate the housing crunch, constricting the available supply of long-term rentals. In San Francisco, where a majority of residents are renters and the construction of new housing can be difficult, any threat to the vacancy rate can breed anger.
"It's the whole units taken off the rental market and being rented out full-time on Airbnb that's the real issue here," says Joe Tobener, a San Francisco tenants' rights lawyer representing Butler. "I don't have a problem with this happening in Kansas. But in a market with a housing shortage, that's a problem."
Tobener blames not just landlords but San Francisco leaders, including Mayor Ed Lee, who has aggressively positioned himself as a friend to the city's tech industry and thriving startup scene. Among the most prominent of those San Francisco startups is Airbnb, and Tobener claims the city is not enforcing its own laws restricting short-term rentals.
The mayor's office defends its stance on Airbnb and other services. "The growing ‘sharing economy’ in San Francisco has leveraged technology and innovation to create new jobs and income for San Franciscans at every income level," says Christine Falvey, a spokeswoman Lee, in an email to WIRED. "Under some conditions, homeowners renting out extra rooms and their property through Airbnb is appropriate, but not at the expense of tenants."
According to Airbnb, its main goal is to preserve its service for what it sees as its core users, the intermittent sharers seeking to make some extra cash by renting out their own homes – not landlords converting their residential rentals into de facto hotels. That's good politics in cities like San Francisco as well as New York, where the company has come under fire from authorities, including the attorney general, over the state's hotel laws.
At the same time, Airbnb says that because it operates in 35,000 different markets, it can't commit to a uniform policy on every issue, including the use of its service for year-round rentals. Such a practice might hurt the housing market in San Francisco. But in, say, a beach town, the ability to post a vacation home for rent could be a good thing.
Airbnb didn't offer a direct comment on Butler's case, but it did point to a study of the San Francisco market it commissioned from UC Berkeley real estate economist and consultant Ken Rosen. He says he has found only isolated cases of landlords converting apartments into full-time short-term rentals, arguing that the practice just isn't economical. "If you could rent it every day ... maybe it would make sense," Rosen tells WIRED. "But you can't."
He says that especially with rents as high as they are in San Francisco, landlords are better off renting their vacant properties the old-fashioned way.
Online room-sharing and ride-sharing services make certain common transactions so much easier that it’s already too late to believe that they’ll ever go away.
But conflicts over the economics of sharing aren't limited to room-sharing. Ride-sharing services like Uber also bring complications. Earlier this month, the San Francisco Business Times reported that San Francisco was experiencing a taxi driver shortage. Part of the reason, according to transit officials, was the city's decision to boost the number of taxi medallions available, which opened up more slots for the traditional taxi industry to fill. But regulators and the taxi industry itself also credited the rising popularity of ride-on-demand apps, including Uber and Lyft.
"There's more of these guys than there are taxicabs," San Francisco Cab Drivers Association President Barry Korengold told the Business Times.
The winner – with both Airbnb and Uber – is the customer. If you're looking for a room or a ride, you now have more choices than ever. In business, that kind of customer satisfaction has a way of turning into an irresistible force that sweeps any opposition from its path. Online room-sharing and ride-sharing services make certain common transactions so much easier, it's already too late to believe they'll ever go away. But as they grow to maturity, the idealistic notion of sharing taught in every kindergarten is giving way to the grown-up antagonisms of hardcore commerce.
