September 8, 2013

Renting out rooms generates backlash

The growing online peer-to-peer marketplace runs into opposition from business owners, city officials and neighbors.

By WALTER HAMILTON Los Angeles Times

Despite working 18-hour days, including part-time as a waitress at a strip club, Hope Arnold was on the verge of losing her Los Angeles home.

homeowners with rooms to rent
click image to enlarge

Hope Arnold prepares her bedroom in her home in the Silver Lake neighborhood of Los Angeles for a paying guest. She says renting out the bedroom through the website Airbnb has “been a financial savior for me.”

Photos by Anne Cusack/Los Angeles Times

homeowners with rooms to rent
click image to enlarge

Arnold set up a patio area outside the room she rents out for guests to enjoy. Critics in her neighborhood say some Airbnb hosts are running virtual hotels that alter the community feel.

Then she discovered Airbnb, a website that links vacationers seeking an alternative to hotels and homeowners with rooms to rent.

Billing her place as an "artsy and rustic 1927 treehouse," she started renting out her master bedroom, while she slept in the den. It paid off. Arnold has made $39,000 on Airbnb in the past 12 months, and the site now accounts for as much as 70 percent of her monthly income.

"It has been a financial savior for me," said Arnold, 39.

Originally conceived as a way to make a few extra bucks, Airbnb has emerged as an unexpected lifeline for struggling homeowners -- but one they are now trying to preserve in the face of a growing backlash.

Echoing concerns in other cities, officials in Los Angeles' Silver Lake neighborhood, where Arnold lives, complain that Airbnb has taken over their community. The neighborhood council is contemplating a crackdown to reduce noise, traffic and parking problems.

Airbnb proponents say many homeowners rely on the site to help them cover living expenses in a sluggish economy that's still rutted with high unemployment.

Growth has been driven by the lingering effects of the 2008 global financial crisis, as people who can't land full-time work stitch together part-time gigs.

Advocates liken Airbnb to homeowners who took in boarders during the Great Depression.

"These people depend on this additional income," said Lisa Gansky, who wrote a book on what's known as the sharing economy. "It's supplementing essentials, allowing them to pay medical bills or allowing them to stay in their homes."

According to a study by Airbnb last year, 56 percent of hosts in San Francisco use their earnings to help pay their mortgage or rent. The company is doing a similar analysis in Los Angeles.

Proponents say it's part of a broader shift in the economy being propelled by an emerging peer-to-peer marketplace.

Websites such as Lyft, RelayRides and TaskRabbit enable people to cobble together a living by renting their cars, their couches or their own time and expertise.

"This is the first stage of something more profound, which is the ability of people to structure their lives around doing multiple sharing-economy activities as a choice in lieu of a 9-to-5, five-day-a-week job," said Arun Sundararajan, a professor at New York University.

"This is technology-driven progress," he said. "This is what it's all about."

OPPOSITION FROM THREE SIDES

But opposition is rising from neighbors, business rivals and city officials.

Web-based transportation services such as Uber, Lyft and SideCar have drawn howls of protest from taxicab companies decrying what they say is unregulated competition. The sites pair riders with car owners willing to ferry them around in their own vehicles for fees or "donations" lower than those charged by cabs.

Likewise, plumbers and other tradesmen bristle at what they contend are unlicensed rivals undercutting them on TaskRabbit, a help-for-hire site listing people who will happily walk a dog or fix a leaky faucet.

Airbnb is among the most prominent sites to encounter opposition.

Critics in Silver Lake say some Airbnb hosts are running virtual hotels, packing homes with throngs of visitors whose sheer presence alters the community feel.

"They're popping up everywhere," said Scott Plante, a neighborhood councilman. "They're all over Silver Lake, and it's the volume of these things. There has to be some sort of balance."

Airbnb rentals violate zoning laws, which prohibit rentals shorter than 30 days, except for licensed hotels and bed-and-breakfasts, council member Anne-Marie Johnson said.

(Continued on page 2)

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