Visitors to Miami Beach come to party, Commissioner John Alemán says. They get wasted, they make noise, and, in the eyes of some residents, cause a nuisance.
For years, Miami Beach has had a law on the books that bans homeowners from renting a property for less than six months, known as a short-term rental, except in certain parts of the city. But since 2008, home-sharing platforms like Airbnb have created an enormous incentive to rent out homes, and, according to Alemán, families in once-quiet residential-zoned neighborhoods have recently been confronted with severe noise problems by homeowners flouting regulation and renting out their properties. Though she would not identify the company by name, Alemán says she met in her office with “the largest home-sharing platform” and offered to work with them to ensure only listings in permitted areas were advertised on the site. The company declined the offer, Alemán says. (Airbnb, the most likely candidate for “the largest home-sharing platform,” declined to comment on any specific interaction but says it works “with cities and governments around the world to develop and implement rules that allow people to share their homes.”)
Penalties jumped to $20,000
In 2016, the city of Miami Beach enacted rules that placed substantial fines on illegal short-term rentals. Penalties jumped from $1,500 to $20,000 for a first infraction, with an additional $10,000 for each subsequent infraction, up to a maximum of $100,000. The fines are reportedly the highest in the nation, although Alemán defends them: a beachside mansion might be rented for several thousand dollars per night, she argues, so the lower fines “became just a cost of doing business” for some operators. She says the penalty “was not irrational.”
The fine increase escalated into an outlandish fight between the Miami Beach government, the state, and Airbnb. The company ran an ad accusing the mayor of hurting middle-class families. The mayor personally paid for floating billboards accusing Airbnb of currying favor in Tallahassee, the state’s capital. The city moved to fine the platforms directly, rather than the property owners. State legislators, meanwhile, have been considering legislation that would restrict cities’ ability to regulate home-sharing and threaten the new rules passed by Miami Beach. “We feel attacked,” Alemán says.
In June, Miami Beach faced a new challenge to its rules. An Arizona-based think tank called the Goldwater Institute filed a lawsuit against the city on behalf of an Airbnb host, arguing that its fines were so high they violated the state’s protections against excessive punishments. The organization, which has long argued against the government in disputes over the use of private property, said that the “arbitrary restrictions” would hurt the community, and “Miami Beach is spending taxpayer money to drive away visitors and turn homeowners into outlaws.”
The war over home-sharing has produced strange bedfellows. The New York Times documented last year how the hotel industry tried to woo Democratic senators in an attempt to undermine home-sharing. Now, as local governments attempt to regulate Airbnb, the platform is finding allies on the right. Conservative and libertarian think tanks, supported by local Airbnb operators, have filed lawsuits against cities around the country to overturn ordinances on home-sharing. Some have also pushed legislation at the state level to restrict local regulations, and Goldwater has presented model legislation for states that would block cities from passing regulations.
“We feel attacked.”
In response to questions from The Verge about conservative and libertarian organizations that have pushed for laws, Airbnb acknowledged that it provided a small amount of one-time funding to two: the Goldwater Institute and the Beacon Center of Tennessee. In Goldwater’s case, it was six months after a 2016 law passed that blocked cities’ regulations; in Beacon’s, it was well after the group had expressed support for a pre-emption law but before legislation was signed in 2018.
Expedia, which owns home-sharing company HomeAway, did not respond to questions about whether it donates directly to any of those organizations, but it did issue a statement saying the company “works collaboratively” with various groups on policy, including organizations that work on property issues. “Our philosophy has been to bring all sides to the table to find common ground,” a spokesperson said. “In that pursuit, we’ve always found the Goldwater Institute, the Beacon Center, and the Texas Public Policy Foundation to be responsible and steadfast champions for their individual causes.”
Goldwater and Beacon say they do not make decisions based on funding, were active on home-sharing issues long before receiving any donations, and were involved with defending the private use of property before Airbnb even existed. But even small donations demonstrate how an unexpected alliance of interests has emerged between the home-sharing companies and groups battling government regulation of property.
“Airbnb is proud to work with dozens of organizations around the globe who share our belief that home sharing is an important economic tool for everyday people that should be recognized and fairly regulated by governments,” the spokesperson said. “We don’t always agree — the Goldwater Institute sued to overturn laws we support — but we believe in working with a broad range of groups, and we’ll continue to do just that.”
The Goldwater Institute, founded in 1988 and named for the conservative stalwart and presidential candidate Sen. Barry Goldwater, has supported a range of causes: creating funding models for charter schools, advancing legislation to limit the reach of the Affordable Care Act, and promoting “property rights,” which the institute describes as fighting back against government overreach. Executive vice president Christina Sandefur, who wrote a book on property rights, says the rights of property owners have reached “second-class status.”
Sandefur argues that home-sharing regulations, often passed by cities that say they are overwhelmed by the home-sharing industry, are a perfect example of a government intrusion into what should be a property owner’s call. “It’s really not an appropriate function of government to be able to make those decisions,” she says. A government deciding who is “desirable” in a certain home is “a pretty dangerous proposition.”
A government deciding who is “desirable” in a home is “dangerous,” Sandefur says
Cities’ home-sharing regulations are a new frontier on an issue Goldwater has already championed, Sandefur says. Before the rise of home-sharing platforms such as Airbnb, which was founded 10 years ago this month, the institute worked on a law that required compensation for property owners if the government caused their property to lose value, for example. As major metropolises from New York City to San Francisco have pushed for home-sharing regulations ranging from licensing ordinances to effective bans, Goldwater has taken the opposing side.
To combat some of these new rules, the institute has used a two-pronged approach. First, the organization has filed lawsuits against cities that have passed ordinances, including Sedona and Jerome in Arizona, as well as Chicago, Seattle, and California’s Pacific Grove. The institute has also written model state legislation that would block cities from barring home-sharing and has pressed for its adoption.
The organization started its fight in Arizona. Sandefur says the institute provided its model legislation to Debbie Lesko, a state lawmaker. Lesko, who sponsored a bill in the Arizona legislature that was also supported by home-sharing companies, “really embraced the concept,” Sandefur says. (Lesko, now a congresswoman, did not respond to a request for comment.) Arizona’s governor signed the legislation, which shares some language with Goldwater’s template, into law in 2016. The institute has also sued cities, including Sedona — a tourist destination known for its red sandstone and spiritualism — and Jerome, over short-term rental regulations.
A sister organization of Goldwater called the Beacon Center and its affiliated lobbying group Beacon Impact played a similar role in Tennessee. The organization sued the city of Nashville over its home-sharing ordinances and notched a narrow legal victory when a judge ruled the city’s ordinance was overly vague.
The Goldwater Institute provided its model home-sharing bill to Beacon, which advances similar causes related to the use of property, and Beacon worked with lawmakers to pass a home-sharing bill at the state level. Online versions suggest that, at one point, the bill included language similar to the model legislation and Arizona’s law, but it did not appear in the final version. A spokesperson said the organization “did not draft the bill but did regularly offer suggestions to legislators on language and policy.”
Airbnb donated to the Beacon Center
The legislation changed over time and was ultimately geared toward allowing current home-sharing operators to continue working even if cities pass new rules, rather than blocking future city ordinances entirely. Justin Owen, CEO of Beacon Center and Beacon Impact, said in an email that there were serious disputes with Airbnb over the bill. But the final result was amenable to home-sharing companies, and before it became law, Airbnb donated to Beacon what Owen says was a nominal amount that “represented well under one percent of our total annual budget.”
While the goals of the think tanks and home-sharing companies often align, they don’t always. One city where a schism appeared between the think tanks and the home-sharing industry was Seattle, which passed an ordinance on short-term rentals last year. Faced with the interests of different constituencies, the council came to a novel solution: their ordinance limited many short-term rental operators to two or three units, with broader exceptions to the rules based on geography and the amount of time a person had been operating. In a rare consensus, both Airbnb and the local hotel association threw their support behind the measure. Airbnb noted it would allow the majority of its operators to continue operating, calling it “a landmark win for Airbnb hosts and guests.”
But the good feelings were short-lived. A Seattle Times investigation reported that a “carve-out” allowed someone operating several properties to continue to do so in exchange for dropping a lawsuit appeal. Recently, Goldwater filed a lawsuit against Seattle, too, arguing that the regulations “make it difficult for someone to operate a home-sharing business, harming local entrepreneurs who have been operating in the city for years without incident.”
“It’s taken a while for us to get sued, so I was pleasantly surprised,” city councilman Rob Johnson says. “I thought we did a pretty good job.”
“It’s taken a while for us to get sued, so I was pleasantly surprised.”
The push against municipal home-sharing regulation goes beyond those two organizations. Both Goldwater and Beacon are part of an umbrella organization called the State Policy Network, a consortium of dozens of free-market think tanks around the country, many of which also argue against home-sharing ordinances in their own states. Members of the group, from Florida to Hawaii, have broadcast discontent with anti-home-sharing measures and pushed out statements and op-eds in favor of legislation preemptively blocking regulation. Proposed legislation with similar language to Goldwater’s model and Arizona’s law has also appeared in other states, including Georgia, which was considering a bill that would have pre-empted regulations in its cities.
An organization called the Institute for Justice filed a suit in Pennsylvania over the state’s license requirements for home-sharing operators, although the case was recently tossed. The Texas Public Policy Foundation, a member of the policy network, has made a legal and public relations push against the city of Austin, which has a strict home-sharing ordinance. A bill in the state legislature that would block cities’ ordinances has stalled, but the foundation has sued to overturn Austin’s rules. The suit, which is ongoing, has received supportive briefs from the Goldwater Institute and the Texas attorney general.
Sedona city attorney Robert Pickels, who defended the city’s ordinances, is sanguine, despite wrestling with the issue for years. Arizona’s pre-emption law and legal action by Goldwater prevented the city from enforcing even ordinances requiring hosts to register, but Pickels says the worst predictions about home-sharing in the city haven’t come to fruition. Unlike in Miami Beach, he says visitors “don’t typically come here to have raging parties.”
The worst predictions haven’t happened in Sedona
He says that officials in states like Arizona have made the case that opening themselves to the sharing economy will be a boon. But more recently, there’s been a shift in sentiment, and Pickels expects that some lawmakers will soon attempt to move authority back to the places that attempted to regulate home-sharing in the first place. “Some of the power that was stripped away from cities is maybe going to be restored back,” he says.
Sandefur envisions working with other sister organizations in the future to prevent that from happening, and she is looking ahead to more action, “hopefully in 2019.”
“We’re certainly doing our best to reach all of our sister organizations that want to protect private property rights and are interested in protecting home-sharing in their state to work with us on this,” she says. “Hopefully many more will step up.”