Monday, July 18, 2016

MoCo Council crackdown on airbnb reinforces County's anti-business, "fight-the-future" reputation

Anti-business Montgomery County
Councilmember Hans Riemer
When Montgomery County Councilmember Hans Riemer declares he has found a new sector of the economy to fix, businesspeople are justified in heading for the hills. After chasing 96% of food trucks out of the County (or out of business altogether), running 9 bars and a 24-hour restaurant out of business in Bethesda with his "nighttime economy" initiative, and spearheading a "get government of the liquor business" drive - that ended with Riemer endorsing the County government monopoly on liquor, where to next for Hans Riemer?

Well, after Riemer and his Council colleagues finished raising your Uber fares in Montgomery County, they're now fighting another modern upstart in the cutting-edge "sharing economy" sweeping the nation: airbnb.

County residents found a wonderful business opportunity in offering their properties for short-term rental on airbnb. They dared to have some success and make money, without help or involvement from Montgomery County Government. And that's sure to run you afoul of the Montgomery County political cartel.

As with Uber, Lyft and other ride-sharing services, the Council has their Communist China-style doublespeak ready to deploy. They are actually "legalizing airbnb," if you read their taxpayer-funded propaganda regarding the bill and zoning text amendment. Most people struggling to pay the bills and get the kids to school on time will hear that, shrug, and keep going.

Here's what they're really doing:

First, folks in the County have found a relatively simple and easy source of revenue through airbnb. So the MoCo cartel has to figure out A) how to eliminate this business opportunity, or at least make it difficult and complicated enough that "the masses" (a.k.a. the little guy) will be discouraged from engaging in it; and B) how does the MoCo cartel get a cut of the money?

The answer is very similar to their agenda with Uber. Apply a new tax. Make Uber more expensive to use. Make doing business here more costly for Uber, thereby driving up Uber fares and driving down another new economic opportunity, driving for Uber. Less drivers adds to the pressure for higher fares, and Uber becomes less appealing to use for those with less money. And "the little guy (or gal)" who thinks of a way to disrupt Uber with his or her own ride-sharing innovation now can't get into the market, because the entry cost is higher than it was when Uber and Lyft got in. Mission accomplished, and they sold it as "legalizing Uber."

Now, it's airbnb's turn. A public meeting will be held tonight to seek feedback on the airbnb crackdown. You can RSVP online.

Riemer, et al, have pointed out with glee that they are so inept (the County government was found to run on Windows 2000 four years after Riemer took office), that they passed a zoning code in 2014 that made airbnb "illegal."

Montgomery County is not enforcing the supposed rules that "banned" airbnb. In fact, a search on the airbnb website for rentals available for this coming weekend in Bethesda and Chevy Chase alone shows 26 listings. Those include a bargain $38 airbed available on Westbard Avenue. There are 30 listings in Silver Spring, including a "cheerful, serene" room near Forest Glen for $39.

Those prices are for check-in Friday through check-out Sunday. For the traveler who can't afford an overpriced hotel room, that's a huge deal. That also ticks off the County political cartel.

So, if successful, the Council will double-tax airbnb "landlords" by forcing them to pay both income tax and a hotel tax, a law already passed by the Council last year. Now they'll add a new "tax," which they're calling a license, and which must be renewed annually.

In addition, airbnb entrepreneurs would only be able to rent their primary residence. The bill also contains a stipulation that "County officials" (and the language leaves open that it could be any County official, if designated by one of three officials named in the bill) have the right to enter your property at any time for any inspection "they may deem necessary." Finally, the bill demands that the property owner maintain a guest register like a hotel, with personal information on each airbnb guest, that the County can review at any time.

With the hotel tax and register, once again the Council is treating one type of business as another. They successfully forced ride-sharing services under the same rules as taxicabs, a completely different business model. Here, they're attempting to reclassify airbnb rentals as hotel rooms, or bed-and-breakfasts.

And once again, the cutting edge of business and technology is going to be blunted by our "Fight the Future" County Council. Across the country, entrepreneurs, venture capitalists, and other businesspeople seeking to launch start-ups are paying attention to the follies of our elected officials.

They're finding Montgomery County to be an expensive and complicated place to do business. That hurts businesspeople, and it hurts consumers. We get less choices. Prices go up. Opportunities and jobs continue to go elsewhere.

What are we missing out on under the "leadership" of Riemer and our current Council?

Global revenue from the "sharing economy" is forecast to reach $335 billion by 2025, according to PricewaterhouseCoopers. Even the famously-liberal City of Takoma Park isn't cracking down on airbnb.

Message? If you want to start a disruptive tech company, don't start it in Montgomery County. With an already-moribund private sector economy, and billions in wealth fleeing to neighboring jurisdictions, that's a message we literally cannot afford to send.


Anonymous said...

If Dyer's neighbors rented their house under AirBNB, Dyer would be the first to sue.

Anonymous said...

Dyer, please explain why Uber and Lyft are "not taxicabs" and AirBNB is "not a hotel".

Anonymous said...

Dyer = Trump. I don't know what the hell I'm talking about, but it sounds good. CROOKED HANZ! CROOKED HANZ!

Robert Dyer said...

6:50: Any reasonably-educated person who has read the above article is laughing at you right now.

6:47: Riddle me this - can you hail an Uber by waving at it on the street like you do a taxi? (Hint: no) Have you ever heard of a corrupt city controlling "Uber medallions"? (Hint: also no) Probably the easiest way to tell the difference, is that if you summon an Uber sedan, it actually shows up.

If you don't know the difference between a Marriott hotel and somebody's private condo in downtown Bethesda, I'm afraid I can't help you.

Anonymous said...

"Reasonably-educated persons" stopped reading after the second paragraph.

Anonymous said...

That graph got my interest.

Why do Reamer and like minded folk hate Uber and airbnb?

Anonymous said...

I agree @650.

#MakeBethesdaSafeAgain #PriceDyerOuttaBethesda

Anonymous said...

It's the future. The only way to get enough money is to tax. They'll tax everything eventually.
Encourage more public transportation
Then they'll be less cars on the road
But that means less income from gasoline tax
Blah, blah, blah

Just start taxing us now for the air we breathe and the steps we take.

Anonymous said...

AirBNB violates zoning rules in residential areas, and is a covenant villain in just about every HOA.

Anonymous said...

If someone wants to rent a room out, that is already happening.
What's the big deal?

Anonymous said...

Ha ha... That should be "violation", not "villain".

Anonymous said...

People do lots of things "already". That doesn't make them legal.

Anonymous said...

Go Hans! The comments above are probably from high paid County officials, who make significantly more than private sector equals. The MOCO County Council LOVES taxes and control. Witness the recent 9% increase in the property tax (4+ times the rate of inflation, yes seriously!) and as housing prices go up the 9% yields even more cash from property owners. I say "cash" because the tax gets paid every year and the value of the house is only realized when it is sold. Not easy for cash strapped households!

When challenged by members of the MOCO Chamber of Commerce Council members had the gumption to call them "anti-student". Well the 4X rate of inflation increase in taxes is Anti: retired homeowners on fixed income, anti young people trying to get their first home, anti lower income people, anti small businesses who often have leases that pass on tax increases to their business.

I have lived here a long time, and have never been able to figure why these people keep getting re-elected!

GO Hans! You are on the right side!!!

Robert Dyer said...

10:27: You are correct in your comments - except you probably don't want to say "Go Hans!" because Hans voted for the tax increases you spoke of.

Anonymous said...

10:27AM They get re-elected because people really don't care about local politics until they're pissed about something. Seriously.

Everyone reading this:
Have you ever just voted for "whoever" because you didn't know anything about the candidates? Pick a name that sounds good? Do the 1st, 3rd, and 5th choices? Pick an incumbent just because?

I'm guilty, most of us probably are guilty.
Until the county comes clean about why they're so cash-strapped, nothing changes.
Reminds me of when the Redskins had traded away all their future draft choices.

Anonymous said...

"In addition, airbnb entrepreneurs would only be able to rent their primary residence."

Makes sense to me. If you want to rent out your place where you live great. We don't need people reducing the housing supply so they can avoid being a real landlord and being quasi hotel managers instead.

Anonymous said...

Barwood's cabs can be "hailed" by making a phone call. Does this make them "not taxicabs", too?

Anonymous said...

@ Robert, meant to say "GO ROBERT"!!! Got a little caught up.

Robert Dyer said...

12:34: No, I'm talking about the ability to physically hail a cab by gesture or voice on the street. You cannot legally hail an Uber sedan that way, but you can hail a cab. One of several legal distinctions between taxis and ride sharing services.

Barwood Sucks said...

Does Reamer actually think I'm going to delete my Uber app and try to hail a Barwood cab instead?
No thanks Hans!

Barry Cohen said...

Seems to me, a lot of places are cracking down on Airbnb, not every city and town wants to embrace it. MOCO is no different. Personally, I want it legal in Montgomery County as an option to use my property to make money. That said, I hope they regulate it and allow it in the County. My guess is, they want the fee's, big shock there! So lets get it inputed.

Anonymous said...

Robert I read your blog often and appreciate your reporting on the issues. I wouldn't have noticed this issue otherwise. Thanks for your work.