AirBnb

New York City has an Office of Special Enforcement that spends 95% of its time investigating rentals for possible violation of state and local laws — many of which are arranged on websites like AirBnb, Bloomberg reports. And the hotel industry and labor groups are only too eager to help, hiring their own private investigators to rat out AirBnb hosts who flout a ban on short-term sublets.

Why it matters: These self-styled rental vigilantes are just one example of how incumbent industries are leveraging state and local regulators to resist competition from online upstarts and emergent technologies. In other cases, taxi interests have helped ban Uber in places like Nevada, and utilities have worked to stop the spread of rooftop solar panels for residential real estate.

Are these tactics legitimate? The anti-solar campaigns by utilities appear to be naked attempts to buy protection from competition from regulators, but other such efforts seem to have more merit. As the Yale Law & Policy Review puts it, "The short-term rental sector, for example, thrives in the shadow of land-use regulation that . . . restricts supply, drives up costs, and segregates housing from employment and amenities."

  • In other words, a company like Airbnb profits by offering suppliers and customers a way to avoid onerous regulation. In some cases, they force a public discussion about the legitimacy of commercial regulations.

All politics is local: There will be no uniform solution. Along with other hot-button issues like police reform and educational access, this debate will unfold differently in different corners of the U.S. and the world.

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