T E C H N O L O G Y
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Bloomberg Businessweek September 23, 201921Edited by
Jeff Muskus and
GETTY IMAGES Rebecca Penty
● The company’s campaign
against City Hall has
backfired, and investors
are growing nervousthe addresses of more than 17,000 hosts it says are
operating illegal rentals. And talks between Airbnb’s
chief negotiator and his principal adversary have
been at a standstill for years.
Investors want Airbnb to sort things out with New
York before it goes public in 2020, according to three
people familiar with the discussions who spoke on
condition of anonymity because the matter is pri-
vate. The company is working hard to come to terms
with the city, one of them says. Failure could cast
doubt on Airbnb’s valuation and also lead other cit-
ies to tighten laws or otherwise push to renegotiate
terms on which companies like Airbnb do business.
“The more legal Airbnb can be, the more confi-
dent investors will be in the IPO. New York is obvi-
ously a kind of bellwether market for them,” says
Andrew Rasiej, chairman emeritus of New York
Tech Alliance, a nonprofit industry advocacy group.
“They are doing all they can to legalize.”
Airbnb is still pushing for changes that would
open the market, but with its listing looming, it’s
willing to compromise on regulation, such as agree-
ing to a ban in rent-controlled buildings. Airbnb’s
global head of policy, Chris Lehane, says the com-
pany will outlive its opponents to eventually suc-
ceed in New York. “Who’s going to be around theAirbnb Inc. is used to mostly coming out on top.
Despite fierce opposition from traditional hoteliers,
the home-rental startup has negotiated regulations
that have allowed it to operate in more than 500 cit-
ies, from San Francisco to Tokyo. Now the company,
last privately valued at $31 billion, is gearing up to go
public. But it’s hit a wall in New York City, where the
rules are stricter and Airbnb’s often aggressive tac-
tics appear to have backfired.
The city forbids short-term rentals of most entire
apartments—exactly the arrangement of greatest
value to Airbnb and the people, known as hosts,
who use its platform to rent their homes. New York
boosted its budget to hunt down these illegal listings
to about $8 million this year, a tenfold increase in
four years, according to documents from the city’s
Office of Special Enforcement viewed by Bloomberg
Businessweek. The city has subpoenaed Airbnb forNot so fast,
Airbnb