In recent years, the sharing economy has made headlines throughout the country. At the same time, lawmakers at the local and state level have been debating how and whether to regulate the growing industry, with far reaching consequences for those who now depend on it for their livelihood. Ridesharing in particular has faced a notoriously bumpy ride thanks to the work of special interests, but now the short-term rental industry is facing an uphill battle as well. For the millions of Hispanics who rely on the sharing economy for work, transportation, and accommodation every year, it is vital that policymakers embrace a growth-friendly, pro-innovation platform in the battles to come. In the city of Albuquerque, one such fight is already underway.
Firms like Airbnb and HomeAway are considered ‘short-term rental’ companies, which is to say they allow homeowners to rent out a room, multiple rooms, or an entire house on a short-term basis using peer-to-peer technology. These companies conduct background checks to ensure safety for the homeowner and customer. Recently, the Greater Albuquerque Innkeepers Association has planned to push for a local ordinance that will tax short-term rentals, just like hotels and motels. Special interest groups, like the association, hope that short-term rentals will be taxed the same as hotels, just to “keep things fair.” There’s just one problem: Airbnb is not a hotel.
Airbnb is just a website. You can’t find it on a map. It has no lobby, no rooms, no keys, no disappointing continental breakfast, and none of the things a hotel could be expected to have. It’s simply a service that connects people with spare rooms to people in need of a place to sleep, like a social network. Your upstairs guest room is not a hotel; so why do regulators want to tax it like one?
The answer is clear if you follow the money. Short-term rentals are a hot commodity right now, and competitors like hotels and motels are taking a hit to their bottom line. It makes sense that special interests would try to use the government to crush their competitors – after all, Airbnb is offering a fantastic service, and customers love it. Not to be outdone, these special interest groups are now expanding their regulatory reach outside of Albuquerque. Efforts to crush the sharing economy are now being proposed in Santa Fe and Taos as well.
Over-reaching regulations, like the one proposed, would only keep vacationers from visiting Albuquerque and homeowners from making an extra income. According to Airbnb, 57,000 people used their service in New Mexico in 2015. These proposed regulations would hinder Hispanics – and others – from attaining an additional income. Albuquerque is the most-populated city in New Mexico, and Hispanics account for 48.5 percent of the city’s population – the largest share of any demographic. For the majority of 2016, the state of New Mexico has faced high unemployment rates. Recent reports have shown that the state’s unemployment rate has remained at 6.2 percent for the fourth month in a row, and ranks among the highest in the country. In these troubling times, families are currently trying to provide food for their families, keep a roof over their heads or pay down debt. Industry giants shouldn’t be interfering with a homeowner’s opportunity to find additional income due to fear of competition.
Technology is advancing quickly, and lawmakers are now left with the daunting task of protecting our free market system from special interests and standing up for consumers and workers alike. Although the city of Albuquerque is still in the early stages of discussing this ordinance, they must move quickly to consider the impact it will have on homeowners, tourists, and the local economy. The economic freedom of the people of New Mexico depends on it.