San Francisco has been known for many things. From the Golden Gate bridge to the rapid gentrification brought on by the technology boom, San Fransisco is known for its beauty and its social strife. While the deluge of technology startups and web developers have brought wealth to the region, the poor residents of the city have not seen the same success. This article describes the showdown between one tech startup and the city that gave birth to it.
Airbnb is a very successful startup that allows people to put their private residences up for short-term rentals. They pitch it as another benefit of the gig economy. Purportedly, this application allows people to rent out their space, and is marketed at individual homeowners. However, this is a big business, and many hawkish investors have taken to buying homes to rent out full-time, without actually living in the homes themselves. This causes real estate and available housing to be pulled off the market. In San Fransisco, this is seen as a huge problem. Rents are already sky-high in the city, and housing is in short supply. The city doesn’t want the artificial scarcity created by this app removing even more housing stock in a already-tight market. Airbnb has faced regulatory showdowns in many cities, so this challenge doesn’t come as a surprise. Last month, regulators in Seattle proposed a variety of rules to regulate the industry, and many west coast cities are following suit.