Airbnb cuts ties with vacation-rental firms in Los Angeles

Mark Lipman, with People Organized for Westside Renewel, left, argues with Sebastian de Kleer, owner of Globe Homes and Condos, at a protest in Venice on Wednesday. The firm had many of its L.A. Airbnb listings removed this week.

April 3, 2015 5:41 PM PT

Amid mounting pressure from housing advocates and community groups, Airbnb is cutting ties with some of its biggest money-makers.

Two of the home-sharing giant’s largest Los Angeles-area hosts — vacation-rental firms with dozens of apartments apiece — said Friday that Airbnb had dropped them from its site this week, canceling upcoming bookings and scrubbing their listings. A number of other large hosts in the region have also disappeared from the site.

The San Francisco-based company had little to say about the moves, issuing a brief statement that said its “mission is to connect hosts with guests and provide a quality, local and authentic experience. We routinely review our platform for market quality and adherence to this mission.” A spokesman said he couldn’t comment on specific hosts. There is no sign of similar moves in other big Airbnb markets, such as San Francisco and New York.

But the presidents of Globe Homes and Condos in Venice and AE Hospitality in downtown L.A. both said they received phone calls from Airbnb on Tuesday, telling them that their listings would be removed from the site and bookings after April 15 would be canceled.

“The rep who called us mentioned the growth plans of Airbnb conflicts with us listing on their website,” AE Hospitality president Ari Eryorulmaz wrote in an email. “No explicit reason was given.”

And he wasn’t the only one. An analysis of Airbnb listings for The Times by Tom Slee, an independent researcher working on a book on the sharing economy, found that 10 of the 13 hosts with the most local listings on the site in October no longer had any on Friday. Globe Homes, the biggest, had only a handful of houses listed in Palm Springs, instead of the dozens of units it typically lists in tourist-friendly parts of L.A.

Just like Eryorulmaz, Globe Homes owner Sebastian de Kleer said he got a call on Tuesday.

“We had about 50 listings removed,” he said. “They told us on the 31st” of March.

The move comes as Airbnb faces growing scrutiny at L.A. City Hall. City officials are meeting to try to determine how to better regulate the booming short-term rental industry, which is technically illegal in much of the city, though critics say those rules are rarely enforced and hotel taxes often not collected.

Last month, the Los Angeles Alliance for a New Economy, an influential research group with labor ties, issued a report saying that short-term rentals are exacerbating housing shortages in some neighborhoods.

The report named Globe, which at times listed more than 70 units, as a main culprit. Earlier this week, Venice residents protested outside Globe’s office.

The episode highlights the tension between Airbnb’s “sharing economy” ethos of regular people renting out spare rooms, and the professional operators who are attracted to it, said Ian McHenry, president of Beyond Pricing, a firm that provides market data to Airbnb hosts. He notes that Airbnb cracked down on some landlords in New York a few years ago after protests there.

“They’ve always had the tenuous relationship with property managers and vacation rentals in general,” said McHenry said. “Whenever there’s kind of an outrage, they’ll retreat to a position of, ‘Hey, we’re just trying to help people pay the rent.’ Professional property managers fly in the face of that.”

It also comes as many analysts expect Airbnb, whose most recent round of investment valued the company at $13 billion, to launch an initial public offering, perhaps later this year. If it plans to do so, the company needs to make sure it’s in the clear with local regulations and not triggering protests in the streets, said Sam Hamedah, managing director at PrivCo, a research firm that tracks private companies.

“One of the things that IPO investors hate most is legal and regulatory risk,” he said. “There’s no question that Airbnb has to clean up those issues if it’s going to go public. But doing that is not going to be easy.”

In L.A., big hosts such as de Kleer and Eryorulmaz, who are co-founders of the Los Angeles Short-Term Rental Alliance, have also played a big role in the discussions, pitching City Council members and defending their business model.

But on Friday, both said that they were around long before Airbnb, and could well be around long after. For a while, though, de Kleer said, Airbnb made a lot of money off of them.

“But it doesn’t match their PR story to have professionals on their platform,” he said. “Their goal is to go public, so they took this drastic step.”

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