Rachel Barnhart was a reporter in Rochester. She’s now a county legislator. She’s smart, and a graduate of an inner-city high school whose parents were teachers in the inner city. She’s a Rochesterian through and through, and really knows the city. After a couple of political false starts, she’s been elected to the Monroe County Legislature.
That body has a really mixed record that she’s been exposing on her Substack. Her latest three-parter is about how AirBnb got a sweetheart deal pushed through the leg at the last minute.
This is a little in the weeds but it shows how regulatory capture works.
Let’s start with this: the son of Rochester’s Congressman, Joe Morelle was the AirBnb lobbyist.
Then let’s move on to what AirBnb wanted: to opt out of the state requirement that AirBnb report data to a state registry. Because the legislation was introduced as a “matter of urgency” around Thanksgiving, and legislators didn’t fully understand what they were voting for, it passed. AirBnb also got a continuation of a Voluntary Contribution Agreement, which means that AirBnb collects taxes on behalf of its hosts, and can only be audited every four years. Note that the neighboring counties around Rochester all make AirBnb report to the state registry.
After the legislation passed, Barnhart asked the County Executive, Adam Bello, who’s a Democrat from the same suburb as Rep Morelle and tied to Morelle’s political fortunes, to release all the documents related to AirBnb’s lobbying. She got 179 pages, but because the documents trail off before the vote, she thinks that some documents weren’t released.
One of her interesting discoveries is the disconnect between AirBnb’s efforts to portray itself as a way for regular folks to casually rent out a spare room and the reality of modern AirBnb. Ayone who uses the platform knows that it’s dominated by “superhosts” who are basically property management companies that manage a bunch of properties.
As Part 1 showed, this is a significant industry, not a marginal one. Airbnb told the county there are roughly 740 hosts and that a “typical” host rents about 60 nights per year. But occupancy tax receipts suggest more than 131,000 booked nights annually, far more than 60 nights a year per host. Last year, Airbnb accounted for 12% of Monroe County’s hotel occupancy tax revenue, a big share in a county with 7,000 hotel rooms. Airbnb also told the county that about 150 hosts operate more than one unit and more than 500 units are rented frequently. Without transaction-level data, the county has no way to verify the remittances or market impact.
That is by design.
The whole three-part piece is worth reading, but the important point as far as I’m concerned is the housing shortage in Rochester. During and after COVID, the rise in remote work caused the formerly staid Rochester real estate market to take off. And, COVID also mean that there was less construction going on. Housing became unaffordable in just a few short years.
If you do the math on Barnhart’s numbers above, the average host rents their place for 177 nights a year. This means a lot of housing stock is sitting empty as the hosts hope for bookings. AirBnb is a scourge, as far as I’m concerned, and the extremely light regulation that they’re getting in Rochester is a scandal. Better regulation of AirBnb starts with better understanding of their impact on the community, which is big and negative.
Barnhart knocked on my door when I lived in Rochester as she canvassed for a campaign for State Legislature. I supported her because I thought it would be really damn interesting to have a reporter inside that corrupt body. She ended up in a different corrupt body, but it’s clear that her presence there is better informing the public.
