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Platform economies and urban planning: Airbnb and regulated deregulation in London

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Abstract

The ‘sharing economy’ has become a new buzzword in urban life as digital technology companies set up online platforms to link together people and un- or underutilised assets with those seeking to rent them for short periods of time. While cloaked under the rhetoric of ‘sharing’, the exchanges they foster are usually profit-driven. These economic activities are having profound impacts on urban environments as they disrupt traditional forms of hospitality, transport, service industry and housing. While critical debates have focused on the challenges that sharing economy activities bring to existing labour and economic practices, it is necessary to acknowledge that they also have increasingly significant impacts on planning policy and urban governance. Using the case of Airbnb in London, this article looks at how these sharing or platform economy companies are involved in encouraging governments to change existing regulations, in this case by deregulating short-term letting. This has important implications for planning enforcement. We examine how the challenges around obtaining data to enforce new regulations are being addressed by local councils who struggle to balance corporate interests with public good. Finally, we address proposals for using algorithms and big data as means of urban governance and argue that the schism between regulation and enforcement is opening up new digitally mediated spaces of informal practices in cities.
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February 28, 2018, https://doi.org/10.1177/0042098017751982 )
Platform economies and urban planning: Airbnb and regulated
deregulation in London
Abstract
The ‘sharing economy’ has become a new buzzword in urban life as digital technology companies
set up online platforms to link together people and un- or underutilised assets with those seeking
to rent them for short periods of time. While cloaked under the rhetoric of ‘sharing’, the exchanges
they foster are usually profit-driven. These economic activities are having profound impacts on
urban environments as they disrupt traditional forms of hospitality, transport, service industry and
housing. While critical debates have focused on the challenges that sharing economy activities
bring to existing labour and economic practices, it is necessary to acknowledge that they also have
increasingly significant impacts on planning policy and urban governance. Using the case of
Airbnb in London, this article looks at how these sharing or platform economy companies are
involved in encouraging governments to change existing regulations, in this case by deregulating
short-term letting. This has important implications for planning enforcement. We examine how
the challenges around obtaining data to enforce new regulations are being addressed by local
councils who struggle to balance corporate interests with public good. Finally, we address
proposals for using algorithms and big data as means of urban governance and argue that the
schism between regulation and enforcement is opening up new digitally mediated spaces of
informal practices in cities.
Keywords
Data, governance, housing, planning, sharing economy, technology/smart cities
Introduction
In London, as well as other major Airbnb cities, rather than arriving to a home-cooked
meal served up by a hospitable individual, you could well find yourself renting a flat
run by a third-party management company, and collecting your keys from an agent who
lets out hundreds of other properties for hosts who are less interested in cross-cultural
connections and more concerned with collecting their money at the end of the month.
(Coldwell, 2016)
The sharing economy has gained popularity in a number of cities across the world and has opened
up new avenues of living and working, particularly since the global economic recession of 2008
(Killick, 2015). Digital technology companies, often backed by venture capital, have created
platforms through which people can share unused or underused goods and services with those
seeking to use them for short periods of time. It has been argued that this is part of a wider set of
seismic changes to the ways in which economic activities take place in cities across the globe
towards more flexible and on-demand forms of work and living (Riley, 2012).The claim of
facilitating more collective and convivial ways of accessing and utilising assets and services is
beginning to have an impact on policy-making. Local and national governments have been keen
to engage with the sharing economy to not only harness its potential, but also to be seen to
embrace new ways of living and working. While appealing in theory, critics have noted that this
benign veneer hides more complex workings of digitally mediated ‘sharing’ that replicate and
reinforce existing dynamics of property ownership and capitalist relations (Killick, 2015).
Cities have become key sites for the development of digitally mediated sharing, and particularly
of short-term letting which straddles the divide between housing and hospitality. Airbnb, one of
the most wellknown and controversial of these platforms, has rapidly gained a monopolistic
position in many cities around the globe (Jefferson-Jones, 2014). In its publicity campaigns, the
company has repeatedly emphasised how it enables sharing the home of a local resident and
enjoying an ‘authentic’ experience of place; yet it does so through a profit-driven foundational
logic as compared with a socially driven one. It claims to offer property owners the ability to
maximise the utility of their underused assets such as rooms, entire flats or other properties. As
such, critical commentators have argued that it is not part of the ‘pure’ sharing economy as much
as the corporate-driven process that involves increased utilisation of durable assets (Finck and
Ranchordas, 2016; Schor, 2014). Thanks to the visibility of such critique, the question of
regulating ‘sharing economy’ letting platforms has increasingly become a topic of debate,
particularly in cities facing pressure on space due to tourism on the one hand and affordable
housing needs on the other (van der Zee, 2016).
While scholarly debates have mainly focused on the economics of short-term letting and on the
challenges it poses to established hospitality industries and forms of labour (Cockayne, 2016;
Edelman and Geradin, 2015; Schor, 2014), less emphasis has been placed on how the activities
and uses facilitated by ‘sharing’ platforms are remaking spaces and territorial governance. This
paper aims to address this gap by focusing on the under-examined impact of the sharing economy
on urban governance, and particularly on planning. Against an imaginary of deterritorialised
global uses, the new economic practices mediated by digital platforms are met with
geographically specific pre-existing planning policies and practices of regulation and
enforcement. Drawing on secondary sources, policy documents and qualitative interviews with
planning officers about the regulation of Airbnb in London, UK, we analyse policy shifts and
practices of enforcement at local government level and examine how emerging digitally mediated
uses of space usher in both new urban regulations and unexpected challenges to their enforcement,
raising wider questions about the role of information technology companies in transforming city
governance across the globe.
Urban planning policy and the challenges of the sharing economy
The Sharing Economy is a movement: it is a movement for deregulation.
(Slee, 2016: 26)
Since the ‘sharing economy’ entered wider public discourse in 2011, it has been celebrated as the
new frontier of economic innovation and as capable of disrupting existing industries as well as
ways of life. Within its ‘contrasting and contradictory framings’ (Martin, 2016), the narrative of
economic opportunity has become increasingly dominant. The growth of the sector has been
presented as desirable and necessary as it fosters the micro-entrepreneurialism of individual
monetising underutilised assets alongside being ‘a major commercial opportunity for
entrepreneurs, companies, industries and/or countries’ (Martin, 2016: 153). This celebration has
found fertile ground in the established ‘enterprise discourse’ and attempts at regulating the sector
were initially portrayed by advocates as unnecessary ‘red tape’. The strong binary opposition
between innovation and control has been argued to be central to neoliberal discourse: ‘on the side
of freedom and prosperity are the qualities of enterprise, initiative, self-reliance and their outward
manifestation: entrepreneurship. Ranged against them, but about to be swept aside, are the evils
of progressive taxation, government control and welfarism’ (Armstrong, 2005: 41). In the
establishment of the neoliberal project of entrepreneurialism, the transformation of the role of
central and local governments has been seen as pivotal (Harvey, 1989;Ward, 2003), and as
particularly visible in planning policy deregulation.
Critical literature on the impact of neoliberal discourse on urbanism has examined the complicity
of governments in shifting and suspending laws and regulation in an attempt to encourage private
enterprise and court global corporate investment. Scholars have noted how neoliberalism has been
allowed to expand through tactics such as creating zones of exception (Ong, 2006), suspending
rules and regulations (Roy, 2009), selectively enforcing them (McFarlane and Waibel, 2012) or
replacing them with new policies, legislations and regulators. Rather than the rolling out of a
coherent and all-encompassing urban paradigm, however, urban neoliberalism is better thought
of as developing in geographically and temporally uneven and variegated ways (Brenner et al.,
2010) and as a heterogeneous and non-linear process of neoliberalisation (Peck, 2010),
challenging and adapting to but also being resisted through different locally specific socio-
economic and political relations (Holman et al., 2017). In this context, it is important to qualify
that neoliberal ‘deregulation’ does not equate to the withdrawal or absence of regulation, but
should rather be understood in terms of practices of reregulation or ‘regulated deregulation’
(Aalbers, 2016). The notion of regulated deregulation is suggested by Aalbers to clarify and better
conceptualise the role of deregulation under neoliberalism as the process by which ‘some
economic agents are given greater freedom from state control but the market framework itself is
regulated’ (2016: 3). Recent moves by cities around the globe to reshape market rules to enable
the proliferation of large digital-led platform economies such as Airbnb could be seen as a prime
example of regulated deregulation in planning.
Since its founding, Airbnb has developed as rapidly as it has attracted calls for regulation. A key
critique of the platform and its ‘sharing’ rhetoric has been that it actually encourages the
professional use of the platform and the accumulation of additional property in order to acquire
rents. Higher income from short lets encouraged by Airbnb have also incentivized property
owners to shift to renting on the platform rather than putting it on the long-term rental market
where they would earn less. It has been suggested that these shifts have significant impact on local
rental and property markets (Cocola-Gant, 2016) while also circumventing local regulations
around safety and taxation (Finck and Ranchordás 2016: 46-7; Levin 2016). Moreover, the use of
the platform for vacation rental impinges on the existing hospitality industry, ‘disrupting’
traditional forms of hosting travellers (Guttentag, 2015). Concern around running 'illegal hotels'
that circumvent rules and regulations protecting consumers around issues of safety, security and
discrimination (Edelman and Luca, 2014) has been used by the established hospitality sector to
demand regulation of the presence and expansion of the service. Blurring the boundaries between
hospitality and housing, the platform has been affecting urban regulations around both.
Governments’ attempts to develop regulatory frameworks to govern the activities of Airbnb have
differed across cities and at various scales, in approaches and aims. As Finck and Ranchordás
(2016) have noted, at one end of the spectrum are those urban governments that engage in a
laissez-faire or minimalist approach. Some of these have attempted to experiment with the process
of producing new regulations, collaborating with the platforms, piloting policies, allowing these
services to operate temporarily in an attempt to remake their regulatory environments. At the other
end are those governments that have used existing planning regulation to restrict or reject the
operations of ‘sharing economy’ platforms. As governments engage with the activities mediated
by these platforms, they produce and implement changes in urban planning policy and practice
that can often reveal contradictory priorities at different levels of government. Regulation and its
implementation can become a particular issue for local authorities and planning enforcement
officers, who attempt to address the questions of ‘public good’ against a central government that
may be more interested in short-term economic gains than longer term attention to social needs
(Lord and Tewdwr-Jones, 2014). With the celebration of the sharing economy being dominated
by the neoliberal language of entrepreneurship, the question of balancing short-term gains and the
wider public good is particularly crucial for the understanding the challenges posed by digital
platform economies to planning frameworks and practice.
In this paper we analyse the regulatory challenges generated at the level of local planning
enforcement by the activities of Airbnb in London as a case of shifting regulations and competing
priorities and practices around encouraging ‘sharingin cities. To develop our argument, we first
analyse the discourse deployed by corporate and state actors to discuss regulation in the ‘sharing
economy’, how it informed specific national policy strategies and how these strategies were then
embedded into practice at lower levels of urban governance. We argue that the discourse is
informed by a ‘flattening’ vision of digitally led social innovation and technocratic governance,
as evidenced by secondary sources such as published first-hand accounts, newspaper articles and
reports from industry and third sector organisations. We continue by discussing the specific
regulatory framework around short-term letting in London and the conditions of operations of
Airbnb in the capital, drawing on the analysis of publicly available data gleaned from Airbnb and
from the independent online data platform Inside Airbnb. To address different responses to the
regulatory challenges of Airbnb in London, we analyse shifts in planning policy and examine
their implications through selected qualitative interviews with planning enforcement officers from
the four inner city boroughs in London where the issue of short-term letting through digital
platforms, and particularly Airbnb, was more acute at the time of the study (2016): Islington,
Camden, Royal Borough of Kensington and Chelsea (RBKC) and Westminster.
The four boroughs presented key differences. In terms of political alignment, Camden and
Islington were Labour-controlled whilst Westminster and RBKC were Conservative-controlled.
Although the local housing rental markets differed in absolute terms, they presented similarities
in relative terms, for example when comparing the average letting value through a standard
tenancy to that of a similar property through a short-term let. For a 1-bedroom flat, the difference
was £49 to £150 per day in Islington, while at the highest end, in RBKC, it was £67 to £178 per
day. Finally, while all four boroughs showed the highest numbers of properties listed on Airbnb
in London, the total amount ranged from 3288 offers in Islington, of which 1831 were entire
homes, to over 4700 in Westminster, of which 3284 were entire homes (Inside Airbnb, October
2016). These corresponded to 1.8% and 2.7%, respectively, of the total number of dwellings in
each borough (DCLG, 2016). In the latter part of the paper we outline how different planning
departments responded to short-term letting through Airbnb and look at how the challenges of
enforcing regulations around platform economies reveal the increasing incorporation of digital
companies into the management and planning of cities, further developing neoliberal practices of
urban governance. We end by examining how ideas of technology-led governance have emerged
in response to the discrepancy between data generated by platform economies and the data
required to enact and enforce new regulatory frameworks. In the conclusions, industry calls for
algorithmic regulations are examined to raise wider question about the implications of sharing
economy platforms for urban planning and policy-making.
In the latter part of the paper we outline how different planning departments responded to short-
term letting through Airbnb and look at how the challenges of enforcing regulations around
platform economies reveal the increasing incorporation of digital companies into the management
and planning of cities, further developing neoliberal practices of urban governance. We end by
examining how ideas of technology-led governance have emerged in response to the discrepancy
between data generated by platform economies and the data required to enact and enforce new
regulatory frameworks. In the conclusions, industry calls for algorithmic regulations are
examined to raise wider question about the implications of sharing economy platforms for urban
planning and policy-making.
Airbnb and visions of regulatory ‘flattening’
What began as somewhat revolutionary ideas of sharing assets, goods and services, has shifted
away from these more convivial exchanges1 to increasingly monetized ones as venture capital
firms come to intervene and influence these processes (Slee, 2016). As the aim has shifted away
from sharing to profit-making, companies have also sought to scale up their global operations
through influencing urban governance structures. The challenge of on-demand provision of
services and spaces has been shown to affect labour relations (for example, Deliveroo,
TaskRabbit, Butler etc), transport (such as the controversial taxi application Uber) and ways of
using urban spaces (for example, JustParking). Platform economy companies position themselves
discursively and practically at the forefront of a social and economic revolution. The celebration
of web-based sharing technologies as a source of social innovation is often presented as a value-
neutral question of connectivity between users and assets through personal ‘empowerment’
(Rachel Botsman, quoted in Slee, 2016). The roots of this narrative can be found in the discourse
of informationism emerging in the 1990s around the so-called ‘Internet Revolution’ (Neubauer,
2011).
The key claim of informationism was that technological development would decentralise power,
making existing nation-state and civil society institutions obsolete and unnecessary. The kernel
of this discourse was a prescriptive, celebratory narrative that contrasted ideas of personal
empowerment with purported anachronistic state institutions, presenting them as antithetical. As
stated by the American conservative commentator Lawrence Kudlow in 1999, “the internet
empowers ordinary people and disempowers government” (Kudlow quoted in Neubauer, 2011:
215). An important element of this decentralisation of power through technology was the
‘flattening’ of existing place-based specificities (Friedman, 2005; Neubauer, 2011) and the end
of “the tyranny of geography” (Slee, 2016). Contrary to Kudlow’s forecast, the exponential
development of Information and Communication Technologies and its impact on everyday life
has on the contrary opened up an unprecedented degree of incorporation of technology and place-
based urban activities. The technological utopianism of Silicon Valley’s digital companies has in
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1 Many of these sites such as couchsurfing.com began as websites where people would host others in their
homes through reputational economies free from monetary exchange.
fact informed calls to greater government intervention and collaboration, a further instance of the
unprecedented role of IT companies in influencing and shaping city governance (Kitchin, 2014).
The latest rethinking of the relationship between digital technological innovation and urbanism,
often discussed under the rubric of the ‘smart city’, have moreover strongly positioned states and
urban government as key institutional actors within the wider digital revolution (Deakin, 2013;
Hollands, 2008; Kitchin, 2014).
The global ‘scaling up’ of platforms such as Airbnb has crucially raised the question of the role
of existing urban policy frameworks and their multiple geographically specific manifestations.
On the issue of engaging with specific local policies, the position of platform economy companies
is at times expressed publicly with candour. In a 2015 radio show, spokespersons from a range of
platform economy companies including Airbnb lamented the ‘patchwork of cities’ regulations’
that they face when they scale up their sharing applications across transport labour and spatial
activities.2 Airbnb’s staff in particular identified the existence of place-specific urban governance,
both in terms of taxation and in terms of qualification, as the main barrier to implementing their
vision. Their wish was for a top-down strategy of ‘model legislation’ transferrable from one city
to the next: ‘if we could take one city and do it right there, Portland is our best example in the US,
and replicate that, ideally top down […] basically create a model and then scale it. What would
be challenging is if every city wants to behave differently’.3 Evident in this approach is a dismissal
of geographical specificities through the proposal of a ‘flattening’ vision in which a pilot
legislation is scaled up, ‘ideally top down’ to all cities. Appealing to urban units of governance is
discussed as a solution to the territorial fragmentation of taxation and planning legislation. The
answer for Airbnb has been to encourage mayors and national governments to rethink urban
regulation to re-inscribe emerging short-let practices within existing legislations, or to change
legislations to accommodate them where they lay outside formal uses. Lobbying work by
Airbnb’s Shared Cities Network was launched in fall 2013, leading to the adoption of a ‘Shareable
Cities Resolution’ in 2013 (US Conference of Mayors, 2013) and more recently, to the
establishment of an Airbnb Mayoral Advisory Board with the aim of helping “other cities embrace
home sharing” in the words of its chair and former mayor of Philadelphia, Michael Nutter
(reported in Andrews, 2016).
Speakers to the radio program also discussed how the situation is different in Europe, where
lobbying yielded more unified legislative responses. While in the US ‘every city wants to behave
differently’ posing a challenge to their aspiration, “abroad we've seen a lot more progress on this
front”, for instance in France and in the United Kingdom, where “the national legislation sets a
national policy, but then allows cities to customise it.” In 2013, the British government set up a
Round Table on the Sharing Economy with attendees from all the major commercial sharing
economy platforms, including Airbnb. As reported by sharing economy entrepreneur attendee
Alex Stephany the approach of the government could be encapsulated by the introductory speech
by the then Chancellor of the Exchequer, who addressed participants with the encouragement “tell
us what we can do to help you break down barriers” (quoted in Stephany, 2015: 151). Among
attendees was Patrick Robinson, Head of European Public Policy for Airbnb. A few months later,
in January 2014, the Deregulation Bill had its first reading in the House of Commons. Among the
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2 ‘Regulation and the Sharing Economy’ radio podcast a16z, with speakers from Airbnb, Instacart,
LocalMotion, Lyft, Teespring and Tilt, 15 April 2015. Available https://soundcloud.com/a16z/a16z-
podcast-regulation-and-the-sharing-economy [accessed 22 March 2016].
3 It is worth noting that Portland, Oregon, was heralded by Airbnb CEO Brian Chesky as Airbnb’s first
‘shared city’ in his visual essay “Shared City” (Chesky, 2014).
changes introduced by the bill was the ‘deregulation’ of short-term letting in London, which
involved the removal of city-specific limits and the introduction of new regulations designed to
address and support the online-mediated use of residential properties for hospitality. The
transformation of existing legislation and the introduction of new enforcement procedures and the
rationale for these raise important questions about the role of local governments and planning
officers in the city, but also about the practice of implementing such changes, as will be discussed
in further detail in the following section.
Short-term letting in London
Local governments such as local councils within the United Kingdom have a long history of
addressing private and commercial interests, balancing between encouraging industry and
implementing the welfare state. Among their various responsibilities is the provision of social
services, housing and the licensing of economic opportunities. The provision and regulation of
affordable housing by the government, for example, has seen shifts over time. While this is a
complex discussion, it is worthwhile noting a few historical points here to trace key elements of
affordable housing provision. In the post war period, there was considerable expansion of state-
subsidized council housing which eventually gave way to a decline in municipal and national
house building, the privatisation of existing stock through Right to Buy schemes and its overall
residualisation (Murie, 2016). This shift was met with a system of direct tenant subsidies for both
social rented and private rented tenants. This too has come under assault in the recent years as the
costs of subsidies have increased, particularly in the capital where housing costs are extremely
high (Hamnett, 2010).
In London, the stress on affordable housing supply was exacerbated by more lucrative practices
of short-term letting, both for tourism and for low-income residents. In an effort to balance both
the affordable housing shortages in the capital and the demands of tourism, national legislation
was implemented in 1973 that made London an exception within the country. This legislation,
titled the Greater London Council (General Powers) Act of 1973 prohibited short-term lets
defined as less than 90 days in the calendar year for properties or parts of properties in the city.
Those wishing to let properties for short periods would have to apply for planning permission for
a change of use.4 5One of the rationales behind this was a consideration that the change of a space
from long-term residential to short-term vacation rental would lead to the concomitant increase
in traffic, noise, nuisance in a neighbourhood or building, affecting the security of residents and
the character of neighbourhoods.
On the basis of this policy, London boroughs have attempted, in varying degrees, to monitor and
enforce regulation against short-term lets that take place without change of use permission. In
Westminster council for example, a team of six officers has previously deployed a strategy of
door-to-door inspections to detect infractions. Landlords found renting their properties illegally
have been issued with warnings and fines. While this system has been far from perfect, it has
helped to construct a semblance of control over unsanctioned short-term letting within the council
boundaries (Holman et al., 2017). In less-resourced councils, the ability to enforce the law with
regards to short-term lets has been even more limited as will be discussed in greater detail below.
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4 The change of use would be from residential use (C3 in UK planning law) to use as a hotel (C1).
5 Change of use may also be prohibited or limited by tenancy agreements.
With the advent of the platform economy, and particularly Airbnb, local councils have continued
their regulatory oversight of such activities as well, in line with their mandate. In addition to
reasons outlined above, council officers have also offered arguments for regulating illegal or
informal use of residential property in order to protect an already overstretched rental property
supply, particularly in areas characterised by high living costs.
On the basis of this policy, London boroughs have attempted, in varying degrees, to monitor and
enforce regulation against short-term lets that take place without change of use permission. In
Westminster council, for example, a team of six officers has previously deployed a strategy of
door-to-door inspections to detect infractions. Landlords found renting their properties illegally
have been issued with warnings and fines. While this system has been far from perfect, it has
helped to construct a semblance of control over unsanctioned short-term letting within the council
boundaries (Holman et al., 2017). In less-resourced councils, the ability to enforce the law with
regards to short-term lets has been even more limited, as will be discussed in greater detail below.
With the advent of the platform economy, and particularly Airbnb, local councils have continued
their regulatory oversight of such activities as well, in line with their mandate. In addition to the
reasons outlined above, council officers have also offered arguments for regulating illegal or
informal use of residential property in order to protect an already overstretched rental property
supply, particularly in areas characterised by high living costs.
Deregulating short-term letting
This is an opportunity for the Capital to catch up with the 21st Century way of living.
(Department for Communities and Local Government, 2015)
Since 2012, when Airbnb first entered the London market, it has gathered strength at increasing
pace, from an estimate of 14,000 listings in June 2015 (Quattrone et al., 2016) to over 49,000 in
October 2016 (Inside Airbnb London), with greater concentration and impact in inner London
boroughs. Faced with this growth, in 2014, the central government began consulting on the issue
with local authorities and platform economy companies. In September 2014, it commissioned
Debbie Wosskow, CEO of the home-sharing online platform Love Home Swap, to write a review
of the sharing economy and to make recommendations on ‘how the UK can become the global
centre for the sharing economy’. In recognizing London’s chronic undersupply of long-term
residential properties, and referring to the regulation of Airbnb and other short-term let platforms,
one of the key recommendations of the report was that “egregious breaches of regulation for
example, letting out a large number of rooms through sharing economy platforms, but not
complying with tax and regulatory requirements must be dealt with firmly” (Wosskow, 2014:
28).
In March 2015 the Department for Business, Innovation & Skills responded to the report by
outlining a point by point response to the recommendations. In terms of Airbnb hosts breaching
planning regulation, the response stated that change of use would continue requiring planning
permission and that ‘[i]f a change of use occurs without planning permission, the local planning
authority can consider taking enforcement action’ (ibid: 13). Later in the paragraph, the
recommendation about firm action against breaches is evaded, as the response continues:
Enforcement action is discretionary, and local planning authorities should act proportionately in
responding to suspected breaches of planning control […] and take action where it is appropriate
to do so’ (Department for Business, Innovation and Skills, 2015: 13, emphasis added). The stress
on the discretionary dimension and appropriateness of enforcement action seem to indicate a
desire to leave ample margin for negotiations. Here, as in the opening quote, the vision of
regulatory flattening brought about by digital companies is accepted and promoted by the
Department for Business, Innovation and Skills in the name of progress and interurban
competition.
In the Deregulation Act passed in March 2015, the government proposed and implemented the
removal of ‘red tape’ by enabling short-term letting without change of use if under 90 cumulative
days in a calendar year. In doing so, it disregarded objections raised by local councils and MPs to
relaxing the safeguards that had thus far been put in place (Holman et al., 2017). The rationale for
remaking regulations on the question of short-term letting is evident in the Department for
Communities and Local Government’s report ‘Promoting the sharing economy in London’
(February 2015). In it, deregulation is argued to ‘enable Londoners to participate in the sharing
economy and benefit from recent innovations in information technology by letting out either a
spare room or their whole house in the same way as other residents across the country’
(Department for Communities and Local Government, 2015). The official rhetoric in favour of
sharing economy platforms expressed here draws on the discourse of individual empowerment
(Martin, 2016) while neglecting the role played by corporate players and businesses (Slee, 2016).
While the report claims that the policy is “aimed at helping residents, and not providing
opportunities for the commercial sector” (DCLG, 2015), data published by the independent
website Inside Airbnb in 2015 and 2016 revealed a different picture on the ground. Contrary to
the benign discourse of Londoners using Airbnb to earn income from spare rooms, the data
showed that 51.3% of all listings in the capital6 were entire homes, and that 41.3% were multi-
listings - that is multiple listings for a single host.7 In London as in other European cities (Sans
and Quaglieri, 2016), multi-listings have been taken as an indication of the encroachment of
professional letting into the short-term let platform economy (Finck and Ranchordas, 2016; Slee,
2016) with potential wider implications for the rental housing market (McCoy and Sigee, 2016).
The expansion of sharing platforms and particularly of the situation in which some propertied
individuals and organizations amass increasing numbers of properties to put on the short-term let
market for high profits have given rise to concern among planning enforcement officers across
the four boroughs studied. Corroborating the data noted above, officers in the inner-city borough
of Westminster for instance have commented that, contrary to the rhetoric of empowering
individual property owners, their own evidence revealed a large proportion of business and profit-
making uses of properties. This created a friction with the duties and responsibilities of local
councils to regulate commercial uses as well as to preserve and maintain supply of housing for
long-term residential use. In other global cities, such concerns have given rise to the
implementation of strict regulations or the outright banning of entire homes listings.8 With the
Deregulation Act 2015, we see instead the emergence of regulated deregulation, with significant
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6 Inside Airbnb London, http://insideairbnb.com/london/ [accessed 24th August 2016].
7 Lower estimates have been stated in the Supplementary Written Evidence from the British Hospitality
Association 1 that in London at least 40% of all listings are “professional hosts running pseudo-hotels”
(British Hospitality Federation, 2016).
8 In Berlin, for instance, concerns by citizens and the local government about the decrease of supply of
long-term rental properties through short-term letting has led to a wholesale ban on entire home listing on
Airbnb and other property sharing platforms in 2016 (Scally, 2016).
impact on conditions of enforcement and local governance, as will be examined in more detail in
the following section.
Practices of enforcement and the quest for data
Despite its name, the Deregulation Act 2015 has not entirely deregulated London’s legislation on
short-term letting policies. Short-term lettings that occur beyond the 90-day rule are subjected to
fines that are set out in previous legislation. As was succinctly put by a planning officer from
Westminster Council, the Act ‘didn't abolish the 1973 Greater London General Powers Act, it
simply amended it. It doesn't say that you can't do [short-term letting] at all: it now says that you
can do it under [new] terms’. The new Act should therefore not be understood as an example of
deregulation as liberalisation, but as a form of re-regulation or ‘regulated deregulation’ (Aalbers,
2016) in which new forms of regulation and new terms of enforcement are established to create a
variegated playing field where some market actors are privileged over others, leading to the
generation of socio-economic inequalities.
Since the Act only came into effect in October 2015, at the time of the study planning officers
across the four inner city boroughs substantially agreed that they had not ‘seen the full impacts of
this latest deregulation of short-term lets’.9 However, all of them raised concerns about the
difficulties of enforcing the 90-days rule in the absence of a formal notification process that would
enable officers to monitor the length of time a specific property, in part or its entirety, is let for
the short-term. The issue had been previously raised in conversations with the Department for
Communities and Local Government, with planners from inner London boroughs discussing the
possibility of an official registry, as has been the case in other European cities, such as Barcelona
and Berlin.10 The suggestion to have a formal notification process was resisted by central
government as “unnecessary red tape”11 leaving enforcement officers in a difficult position as
‘people can just do [short-term letting] legally without having to notify anybody’ (ibid). As put
by a RBKC officer:
our concern is about the practicality of enforcing it and actually having evidence that a
planning inspector, or alternatively a judge, would take seriously. So it is a real practical
problem. We have not had any cases yet, but I'm sure that some will come up over time
and we will have to look at this. So, for us, our main problem with the legislation […]
[is] about the practicality of how do we actually implement this?
Two separate issues are raised by officers in their responses. The first concerns the ability to detect
a breach of the legislation, which a formal notification process would have enabled. The second,
following from that, is their ability to produce planning evidence for potential prosecution.
To date, the question of detecting a breach of the 90-day-per-year rule has been addressed through
ad-hoc combinations of online data mining and triangulation with official information sources.
Westminster is the inner-city borough historically most affected by short-term letting and the
experience of its planning enforcement officers can thus be seen as indicative of the lengths to
which a well-resourced enforcement team needs to go to generate evidence about an issue that is
)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))
9 Islington’s planning enforcement officer B.
10 In Barcelona, for instance, Airbnb hosts are required to register their properties with the Tourism
Registry of Catalonia, the breach of which has been prosecuted in a display of “one of the most
prohibitive approaches” (Finck and Ranchordas, 2016; Sans and Quaglieri, 2016).
11 Islington’s planning enforcement officer A.
considered politically important. A common desk-based strategy enacted by its officers to find
breaches is to filter online data for multi-listings: the effort that is now required to establish that
someone is now doing it for more than 90 nights a year is considerable, but it is not impossible’12.
Searching for hosts who have more than one property on the platform, for instance, often ‘implies
that it is an agent or that they are in business’. The analysis of data available publicly online on
Airbnb, such as the number of reviews left on a host’s profile, is combined with door-to-door
inspections and corroborating witness accounts from local residents to build up a case.
Triangulating different sources of information, however, is not always straightforward as the
publicly available data is partially obscured, as explained by the same Westminster officer:
Airbnb […] only give you dates for the reviews going back a certain length of time […]
you can get postcodes, but even then, if you look at their map they don't always
correspond to where the properties actually are. So, I might recognise a photo and it
doesn't actually correlate with the postcode given. So quite often I have to use [Google]
Street View and then match up from there.
Such a procedure is evidently elaborate and resource-intensive in a context in which a lot of
councils don't have the resources’ (ibid). In Camden, officers have made use of the open access
data scraping platform Inside Airbnb to detect multi-listings, and the data amassed by the platform
has been used as a partial database to scope the extent of the issue and to build evidence for
regulators to prosecute breaches.
Algorithmic regulation and ‘liberalising with technology’
In the absence of an official registry and notification process, access to detailed, geo-referenced
and non-anonymised Airbnb data thus becomes key element to monitor and enforce regulations
about both multi-listings and the 90-days exception. The amount of data that an enforcement
officer can gather and analyse, however, is highly limited, raising the key issue of accessing
information about digital platform economic exchanges. In London, as in other global cities,
gaining access to platform-led short-term letting and particularly Airbnb data has become key for
city officers concerned with potential breaches in planning regulation but requests are often
resisted by companies. In Islington, for instance, attempts to set up data sharing with commercial
short-term letting platforms, such as One Fine Stay, have proven unfruitful because of client
confidentiality agreements. Moreover, as observed by legal scholars, ‘many sharing economy
companies operate in a manner contrary to law, [so] their resistance to efforts to obtain
information about their practices is not surprisin’ (Miller, 2016). The resistance to share
information vital to urban regulatory practices has led some local governments to take
antagonistic stances, and legally enforce data requests, as exemplified by a high-profile case in
New York in 2014.13
In response to the issue of access to data for public enforcement, proposals for further digital
intermediation have been put forward towards a radically different approach to regulation (Miller,
)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))
12 Westminster’s planning enforcement officer A.
13 Concerns with the potential violations by Airbnb hosts of a New York City law that bans renting out an
apartment in a multiple-dwelling building for periods of less than thirty days, Attorney General Eric
Schneiderman requested Airbnb to disclose names and addresses of all 15,000 hosts in the city (Attorney
General Schneiderman, 2014). After an initial refusal, Airbnb finally agreed to disclose to NYC
authorities internal data concerning nearly half a million transactions over a four year period (Slee, 2016).
The result of this inspection led to the publication of the report Airbnb in the city, which substantially
supported the initial hypothesis (Office of the NY State Attorney General Eric T. Schneiderman, 2014).
2016). Advocates for platform economies have called for government to ‘liberalise with
technology’ towards a ‘light-touch framework’ (Stephany, 2015: 178). Within this framework,
governments are encouraged to rely on the vast amounts of data generated through these
platforms, which surpass the amount of data at the disposal of local regulators and planning
enforcers. Effective mining of real-time data through appropriate algorithms, it is argued, can
allow regulators to take ‘a more hands-off approach – until the data tells them to act’ (Stephany,
2015: 178). In a further consolidation of the role of digital platforms in urban governance, this is
the idea at the core of ‘algorithmic regulation’ (Miller, 2016; Quattrone et al., 2016) applied to
new platform economies: to establish real-time mining of large sets of data that enable detection
of ‘anomalous behaviours’, such as are implemented by retail banking and other sectors. This
detection process is envisioned to produce regulations that are ‘responsive to real-time demands’
(Quattrone et al., 2016).
The idea of a ‘real time city’, in which governance is radically transformed by continuous access
to big data has been debated by critical ‘smart cities’ scholars (Batty, 2013; Kitchin, 2014) and
concerns have been raised about the tendency towards a technocratic mode of governance via
information and analysis systems which ‘presumes that all aspects of a city can be measured and
monitored and treated as technical problems which can be addressed through technical solutions’
(Kitchin, 2014: 9). The question of regulation is again central, but with an additional concern
about its corporatisation. With digital technology increasingly affecting the governance of
physical spaces, concerns have been raised about the power shift from regulation by law to a new
paradigm of ‘governance by code’ dominated by private companies (Schulz and Dankert, 2016)
towards what critics have called ‘algorithmic states of exception’ (McQuillan, 2015).
Conclusions
The sharing economy has posed a set of unique challenges to urban planning and governance that
requires careful analysis. The discourse of ‘sharing’, connoting a convivial aspect to these
practices, highlighting the opportunity for average families to make use of un- or underutilised
assets to supplement their income, not only seeks to maximise the appeal of these companies to
ordinary citizens, but mask more complex arrangements that mark their profits. The aim of this
paper has not been to act as an indictment against digital platform for short-term letting such as
Airbnb. Rather, it has been to highlight the ways in which the challenges associated with the
corporate-led ‘sharing economy’ move beyond economic policies to reshaping regulation of
everyday urban spaces. As this article has argued, the challenge of regulating these activities has
met with central government policies for economic ‘deregulation’ while raising concerns for those
institutions tasked with managing and enforcing regulation at the local level, such as planners and
local councils. As the case of the four London inner boroughs has shown, by not putting in place
adequate resources to enforce new regulations, regulated deregulation that claimed to support
micro-entrepreneurialism is likely to contribute, in practice, to a further entrenchment of asset-
based inequalities, with significant implications for the safeguarding of public interest at the local
and city level.
The relationship between platform economy companies and urban regulation raises some
important issues for the role of the state in relation to the ‘regulatory flattening’ imagined and
implemented by companies such as Airbnb. Marginal and informal practices of short-term urban
sharing have long existed, but it is now through a combination of intermediary digital platforms
and the role of the state in pushing for regulated deregulation that they are able to expand at an
unprecedented pace and scale, often to the benefit of a particular set of people, such as asset
owners, as also evidenced by the high proportion of multi-listings. While legal scholars have
argued that platform economies are ‘forcing regulators to rethink what the public interest means
in the digital age and how to update this notion’ (Finck and Ranchordás, 2016: 48), the inability
to know the extent of the practices and of potential breaches makes it difficult for regulators to
properly assess what public interest might mean in this context. As the case of short-term letting
in inner London has shown, local officers and governments face two main possible courses of
action: either to enforce regulation through slow and obsolete methods of data gathering, or to
hand regulation and governance over to digital companies altogether, allowing the latter to
actively intervene in the very definition of regulation. The refusal of platform economies to share
vital data thus contributes to enabling the expansion of speculative practices in cities and the
further entrenchment of neoliberal practices of regulated deregulation.
What is particularly problematic here is how this may lead to practices of enforcement becoming
more reliant on processes of corporatisation. Technocratic governance through corporate-led big
data can pose the danger of a ‘technological lock-in’ in which city government would be beholden
‘to particular technological platforms and vendors over a long period of time creating monopoly
positions’ (Kitchin, 2014) that risk leading to ‘a corporate path dependency that cannot easily be
undone or diverted’ (Kitchin, 2014). In other words, it is not just that the change of regulations
through deregulation are likely to privilege corporate and elite interests (Aalbers, 2016), but also
that corporate and elite interests are becoming fundamental to the remaking of regulations as a
tool of corporate urban governance through digitisation and big data. If the corporate-led ‘sharing
economy’ is a movement that challenges existing ways of working and living in cities, it is also,
importantly, a movement to reregulate and consolidate the role of digital corporate powers in
transforming and embedding themselves into urban societies and their governance, directly,
through lobbying, or indirectly, through maintaining control over data. The rise of platform
economies thus not only shows the way in which digital companies become increasingly
incorporated into the management and planning of cities and gain further control of everyday
lives, but also reveals how the opacity of their activities and relationship to state institutions usher
in new spatial uses. The challenges brought about by digital-led short-term sharing of space need
to be taken more seriously within urban scholarship as we see the proliferation of such activities,
and their powerful corporate intermediaries, in cities across the globe.
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