The free market — to the extent that the market is actually free — has generally always been several steps ahead of government in offering solutions to problems people face and products people need. Two clear contemporary examples are Uber and AirBnB. With Uber, an individual’s personal property (vehicle) is used and competes with public transportation and other transit providers such as taxis. With Airbnb, an individual’s real property is offered as lodging to consumers. The primary competitor in this market is the hotel industry.
Success in the marketplace shifts power and money, and attracts regulations and taxes. Where there is money, there is government. This involvement almost always creates more harm than good to the people involved and eliminates true competition in the marketplace. Take, for example, the municipal warnings, notices, and fines AirBnB providers face. These constant threats and actions by government against property owners whose business activities have no victim create additional burdens on individuals. Airbnb properties, like most all properties, require satisfaction of property taxes, mortgages, utilities, rents, etc.. These costs must be kept up with to maintain a property. Airbnb offers individuals the opportunity to offset these costs.
For almost all Airbnb providers, offering lodging has helped them maintain their homes or properties; in some cases, it’s helped owners to avoid losing those properties altogether. You might assume that governments would welcome the possibility of property owners being able to pay their mortgages, taxes, and expenses (and, more importantly, being able to keep their homes), but the opposite is true. In Miami-Dade County, one of the top five Airbnb destinations in the U.S., some incorporated municipalities such as the City of Miami Beach have imposed fines of $20,000 on “illegal short-term” rental hosts and the City of Miami recently reaffirmed its commitment against short-term rentals by ramping up zoning enforcement in the city and pushing tighter regulations where it is legal. The county and other cities have taken or have plans to take similar action.
Many Airbnb providers have had to deal with government action. Navigating bureaucratic processes and dealing with fines or lawsuits has not made it easier for these individuals to satisfy their economic obligations. These realities not only deter individuals from participating in this new market but also create additional burdens on those who participate. Eliminating and limiting competition also benefits traditional lodging. It would be disingenuous to ignore that there exists a strong lobby against Airbnb from the hotel industry.
According to the Miami Herald, Miami-Dade County Commissioner Javier Souto once lamented the supposed dangers of short-term rentals saying, “This is something that looks good but in the end, it might kill us,” adding that the growth of the industry (dominated by players like Airbnb) would repel “good tourism” and spur “drug and sex tourism.”
One wonders what is “good tourism” is and what evidence exists that would support such a prediction, particularly when areas where Airbnb is allowed do not show an issue with “drug and sex tourism.”
Government all too often ignores the nation’s founding principles found in the Declaration of Independence, “... that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness.” These words, written by Thomas Jefferson, are said to have been influenced by philosopher John Locke, who held the trinity of rights comprises life, liberty, and property. While there is debate as to why Jefferson chose to refer to “the pursuit of Happiness” and not specifically to property, there is no doubt that one of the pillars of American society and culture is the right to property, which is established by law and tradition.
Today, true and full ownership of land is not possible. For example, a fully paid off piece of land is subject to property taxes, which are fountains of revenue for local jurisdictions. Simply put, if you do not pay your taxes, the government can take away your land. Fines and government penalties create possible liens on property. The American idea that you truly own your land is a myth.
History has shown that established special interests and governments resist change. Natural free-market solutions are beyond their control. Eventually marketplace solutions triumph to some degree after having navigated through the rough waters of government. For government to cast a negative blanket on all property owners without respect for fundamental individual property rights is a complete abdication of a pillar of our American heritage and tradition. While there are some areas where governments have embraced the positive aspects of products such as Airbnb, most governments have not reached that point. We should all remember that behind every property is a real individual struggling to achieve the “American Dream.” For the person who was on the brink of losing their property or was able to sleep at night more comfortably due to the extra income that Airbnb provided, it was and is the free marketplace, not the government, that aided in their pursuit of happiness.
Ricky is a Miami-Dade County native and the managing member attorney of the Rodriguez Vacas Law Firm. His law practice focuses on family law, immigration, and general civil matters. He is the son of a Cuban exile and Spanish immigrant, brother to a genius engineer, husband to a beautiful Argentine from the Patagonia, and father of two children more intense and sweet than the strongest "cafecito" you have ever had. When not in the court room or attending clients, Ricky enjoys writing, editing, filming, and producing Miami themed social satire comedy skits and films. He also claims to be the king of the flat footed people.