In a first, Airbnb to go after California party-thrower after shooting at Sacramento rental

Airbnb will pursue legal claims and damages against a booking guest who held a party at a Sacramento-area rental earlier this month where three people were shot after a late night party devolved into chaos.

The short-term rental company told The Sacramento Bee that it was the first time it’s initiated legal proceedings against a booking guest for throwing an unauthorized party. While it’s unclear what specifically the company will do, the move marks a significant change in how it deals with renters who break the rules.

Airbnb notified the guest on Monday of its intent to bring legal action, alleging negligence and violation of local health orders, violation of the company’s community standards, and that the guest booked the listing under false pretenses. The company has since removed the guest, whom they did not name, from the platform.

It comes just weeks before Airbnb is expected to file for an initial public offering — even as its revenue took a major hit due to the coronavirus pandemic, prompting the San Francisco-based company to lay off 25 percent of its staff. The Wall Street Journal reported Tuesday the company is targeting a potential IPO before year’s end.

Sunday’s incident served as a reminder of a problem that has put Airbnb at odds with local governments and neighboring homeowners in recent years: violent shootings taking place at unsanctioned, often disruptive, “party houses.”

The shooting at the rental near Howe Avenue and Delma Way in Arden Arcade ended with three people in their 20s wounded. Sacramento County Sheriff’s Office spokeswoman Lacey Nelson said that when officers arrived, partygoers “took off in different directions,” limiting the witness statements authorities were able to gather. The incident remains under investigation and no suspects have been named, the Sheriff’s Office said.

“We are outraged by the reported behavior and violence, which goes against everything our community stands for,” said Ben Breit, an Airbnb spokesman.

Under the company’s terms of service, the dispute will go to arbitration if a settlement can’t be reached.

Any monetary damages would be donated to a Sacramento nonprofit group fighting gun violence, Breit said. The nonprofit will be chosen in consultation with leaders of the Airbnb host community in Sacramento, he said.

The coronavirus has added an additional layer of incentive to strictly regulate parties — and Airbnb cited a violation of local health orders as a reason to pursue legal action here — as public health officials have linked outbreaks to indoor gatherings and officials in Los Angeles threaten to cut utilities to homes hosting large gatherings.

‘Party house’ rules

Violence at illicit Airbnb parties hasn’t gone unnoticed in the Sacramento region and across the nation. In the second half of 2019, 42 people were shot inside or just outside short-term rental properties nationwide, with 17 people left dead.

Over two summer months last year, one person was killed and at least three others were injured after Airbnb parties scattered in Elk Grove and Fair Oaks ended in shootings.

The city of Rocklin took steps to limit short-term vacation rentals after a shooting broke out at an Airbnb rental in a residential neighborhood and left two injured not long after.

“I’m not concerned about families coming to town and enjoying the amenities we have in Rocklin, but how do we grapple with people having parties there that jeopardize the safety of residents or the attendees of such functions?” Joe Patterson, then-mayor of Rocklin told The Bee at the time. “It’s a public safety issue.”

Rocklin adopted a city ordinance limiting the use of short-term vacation rentals to 90 days per year, and placing a maximum occupancy on properties. Owners must be on-site within 30 minutes in the event of a complaint and people under 21 are prohibited from making reservations, according to meeting documents. Similar rules are in place across the capital region.

Later that same year, Airbnb banned “party houses” after a shooting at a Halloween party hosted in a rental home in Orinda left five dead. The company then put forth new initiatives: restricting some guests under 25 years old from renting out entire homes, a 24/7 neighborhood support hotline, and expanded screenings of listings.

The state has also considered new initiates to deter short-term renters from hosting “disruptive and unsafe” house parties. The state Senate approved a bill that would authorize a city and county to impose a fine of up to $5,000 for a violation of a short-term rental ordinance.

“Short-term rentals offer a way to improve tourism and earn owners extra money, but unfortunately, there have been some bad actors that have used the platform to host large parties,” said the bill’s author, Sen. Steve Glazer, D-Orinda. “These large gatherings have made some short-term rental properties the site of underage drinking, brawls, and noise complaints. Hopefully, my bill will act as a deterrent to such behavior.”

The bill passed 32-7 in June and is being taken up by the Assembly.

Efforts to polish image

Daniel Guttentag, assistant professor in hospitality and tourism management at the College of Charleston, said Airbnb’s crackdown is logical from both a moral and business standpoint.

“I think it probably reflects growing frustration on the part of the company that these parties are still happening. And a growing recognition that they need to do everything to make these parties stop,” Guttentag said.

Guttentag noted that the shootings can negatively affect the company’s standing. The effort could be a way both to heal public relations and deter guests from throwing parties in the future, he said.

“Beyond any obvious humanitarian reasons not to have these tragedies occurring — it just reflects very poorly on the business. It’s terrible PR and media. And I would imagine that some homeowners who might consider listing on Airbnb, this could potentially give them pause.”

Guttentag also noted that it’s difficult to divorce the parties from the reality of the coronavirus pandemic.

“These desires to crack down are only accentuated by the current situation of the pandemic, where large parties are a bad look even if they’re perfectly nice and peaceful, in the eyes of many people in the country right now,” he said.

Airbnb has exploded in popularity since its founding in 2008, becoming the largest home-sharing platform in the U.S. Before the pandemic, the company had more than 7 million listings worldwide and 150 million users. The company raked in $4.8 billion in 2019, and was valued at more than $30 billion three years ago, making it one of Silicon Valley’s most highly prized startups.

Despite the ongoing global outbreak, Airbnb users have still sought rentals even if they were staying close to home. The company said in July that guests booked more than one million nights of future stays around the world using the site, the first time that had happened since the crisis took hold in early March.

“While Airbnb has still been affected undoubtedly by the current situation, they’ve in many ways weathered the storm very well compared to other lodging providers, namely hotels. All the data seems to suggest that Airbnb, and short-term vacation rentals more generally, are fairing relatively well given the circumstances.”

This story was originally published August 12, 2020 at 10:42 AM.