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Airbnb Fights Its ‘Party House Problem’

The luxury cabin in Incline Village, Nev., just north of Lake Tahoe, has a hot tub, sauna, pool table, fire pit, two patios and a backyard full of towering pine trees. It sleeps 14, according to its listing on Airbnb. And it has been a nightmare for Sara Schmitz, a retiree who lives next door.

The home is frequently the site of raucous bachelor parties and weddings, Ms. Schmitz said. Recently, a crew of college students stayed there, blowing weed smoke into her house. When she asked them to stop, they threw trash in her yard.

“It’s a constant party house,” said Ms. Schmitz, 57. She has called the police a dozen times about the property and joined the Incline Village STR Advisory Group, an organization that fights short-term rentals — for which the largest source is Airbnb.

What Ms. Schmitz encountered is part of the “party house problem” facing Airbnb. That’s when guests who book its properties hold parties in them, something that appears to be happening more frequently in the coronavirus pandemic, as people look for places to socialize with bars closed and hotels appearing risky. In July, New Jersey police broke up a party at an Airbnb with more than 700 people in attendance.

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Credit…Max Whittaker for The New York Times

The party houses pose a risk to Airbnb’s reputation and business as the $18 billion company prepares to go public this year. In many neighborhoods, people have been turned off by the rentals’ noise and annoyances. Complaints about party houses across sites like Airbnb and Vrbo soared 250 percent between July and September compared to last year, according to Host Compliance, which provides local neighborhood hotlines across the United States and Canada.

Worse, the party houses raise safety issues. Between March and October, at least 27 shootings were connected to Airbnb rentals in the United States and Canada, according to a tally of local news reports by Jessica Black, an activist fighting short-term rentals. The tally was verified by The New York Times.

Over the years, Airbnb employees have pushed executives to do more to address the party houses, said six people who worked on safety issues at the company. But they said the start-up largely prioritized growth until a deadly shooting last Halloween at an Airbnb made national headlines. Five people died.

The issues are now fueling Airbnb’s many fights with communities over how to regulate home rentals. Groups like the one in Incline Village are becoming more vocal and are sharing their strategies for fighting short-term rentals. Cities including Chicago, San Diego, Ann Arbor and Atlanta have recently proposed or enacted stricter rules or bans on the properties.

“Airbnb’s long-run viability and profitability is going to have a big question mark” if the party issue is not resolved, said Karen Xie, a professor at the University of Denver who researches the short-term rental industry.

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Credit…Max Whittaker for The New York Times

Christopher Nulty, an Airbnb spokesman, said the company is combating the party houses with “robust new policies, products and technologies to stop large gatherings, which far exceeds measures taken by others.” He said Airbnb has made changes even though the moves “knowingly impacted growth and nights booked.”

Airbnb began rolling out new rules against party houses around the same time that it was preparing to file to go public. In July, it said guests under the age of 25 with less than three positive reviews on the site could not book entire homes near where they live. In August, the same month it filed for a public listing, it placed a 16-person cap on reservations, banned parties and sued guests who were responsible for the events.

Last month, it started testing technology to block suspicious last-minute bookings and suspended some party houses from its listings. And ahead of Halloween — the one-year anniversary of the shooting at the Airbnb in Orinda, Calif. — it banned one-night rentals on Halloween.

Some said the measures were too little, too late.

“The damage has really been done to the neighborhoods during that time,” said Austin Mao, an Airbnb host in Las Vegas. He said the costs of repairing damages from parties at his properties, which host as many as 2,000 guests a month, have been tremendous. Neighbors complained so much about parties over the summer that he converted a third of the listings to long-term rentals.

In 2016, Christopher Thorpe, an entrepreneur in Lincoln, Mass., said he faced $28,000 in damages after an Airbnb guest threw an 80-person rave, complete with ticket sales, at his home. Mr. Thorpe later learned that other hosts had reported that guest for parties, but Airbnb had not removed the renter from the platform.

“Airbnb put up as many roadblocks as they could to avoid dealing with this,” Mr. Thorpe said.

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Credit…Kyle Oster/Fox5

Airbnb has long grappled with safety issues, said the six former employees who worked on trust and safety and who asked to remain anonymous.

Two of them said they asked Airbnb to sue people who frequently threw parties at the rentals for the damages, but executives feared that would draw attention to the events. Several also said they pushed to limit or remove the “Instant Book” option, which confirms bookings immediately without requiring approval from the host. But the feature, which was used by almost 70 percent of listings in 2019, boosted convenience and made Airbnb more competitive with hotels. So Airbnb did nothing, they said.

Mr. Nulty said Airbnb promoted Instant Book so hosts could not discriminate against guests by denying some of them a booking, adding that hosts can turn off the feature. He denied that executives had been urged to sue party promoters and said its legal team did not reject proposals because of concerns over public attention.

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Credit…Max Whittaker for The New York Times

In Incline Village, which has a population of around 9,000, the Airbnb party houses have increasingly grated on residents. Shortly after Joe and Edie Farrell, retired physical therapists, moved permanently into their vacation home there last year, the house next door became an Airbnb. Blasting music and drunk people created “10 days of anxiety” around July 4, said Ms. Farrell, 70.

“Airbnb is basically helping people set up a hotel in our neighborhood,” Mr. Farrell, 68, said. “Now you have to worry about your safety and peace and quiet.”

Then came last year’s fatal shooting at the Airbnb in Orinda. A Vice news article that outlined Airbnb’s fraudulent listings and fake host accounts also went viral, raising questions about trust.

In response, Airbnb said it would ban parties thrown by professional organizers that were promoted on social media. It also said it would verify that all seven million of its listings were as advertised by Dec. 15, 2020, and announced a global hotline for neighbors to report parties. And it promoted its head of policy, Margaret Richardson, to be vice president of trust. (She has since left.)

But when the pandemic hit in March, executives scrambled to keep the company afloat. Verification stalled. (Airbnb said 40 percent of listings have “begun the verification process.”) The neighborhood hotline, which was supposed to be available globally, is only accessible in the United States, Canada and the Netherlands.

In May, Airbnb cut a quarter of its staff, including a large chunk of its safety team. In an internal Q. and A. with Brian Chesky, Airbnb’s chief executive, employees protested the layoffs. One said the decision would leave guests without support for weeks, according to a list of the questions viewed by The Times. Another wrote that he would feel unsafe staying in an Airbnb or renting his home on the site because of the lack of a safety plan.

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Credit…Ray Chavez/The Mercury News, via Getty Images

In the first week after the layoffs, safety cases piled up, said former employees. Airbnb asked many of those it had laid off to return temporarily to work through the cases; many of those workers have since remained, said current and former employees. In Dublin, the layoff plans were rescinded altogether, they said. Airbnb said the team that manages user safety is now the size it was before layoffs.

In August, Airbnb introduced more changes to improve safety. It sued a guest who held a party in Sacramento that resulted in three people getting shot. It then sued another guest who hosted a party in Cincinnati, where a property manager was shot in the back while trying to break up the event.

On Oct. 19, the company sued Davante Bell, a party promoter in Los Angeles who threw parties at Airbnb mansions. “Airbnb has suffered and continues to suffer reputational harm and potential liability to third parties as a direct result of Bell’s actions,” the company’s lawsuit said.

Mr. Bell, who declined to comment on Airbnb’s suit, has been selling tickets to a new party called “Nightmare on King Bell Street Halloween Mansion Party” on social media. This week, he continued posting fliers for the event. When asked if the party would be held at an Airbnb, Mr. Bell did not answer.

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Labor Department Curbs Announcements of Company Violations

For years, the Labor Department has made a practice of issuing sternly worded news releases calling out companies deemed by its enforcement staff to have violated the law, including rules governing discrimination, worker safety, the minimum wage and overtime.

But the department’s appetite for using that spotlight appears to have waned.

In a Sept. 24 memo, a copy of which was obtained by The New York Times, Deputy Secretary Patrick Pizzella instructed the heads of the department’s enforcement agencies that “absent extraordinary circumstances,” the findings of their agencies “generally should not be the basis” for news releases.

Mr. Pizzella argued that such releases tend to linger prominently in search results about companies and can prove misleading if a citation or other enforcement action “is ultimately found to be unjustified.” He instructed officials responsible for enforcing labor and employment laws to generally refrain from issuing releases until after a matter has reached its conclusion — for example, once a court has issued a judgment or an employer has reached a settlement with the department.

Citations are often issued at roughly the same point in the enforcement process that a prosecutor would bring an indictment in a criminal matter.

The memo may be having some effect already. Since its flurry of releases about citations in mid-September, the Occupational Safety and Health Administration has not issued discrete news releases about particular companies for Covid-related violations, instead providing a weekly summary of proposed penalties with a table listing up to three dozen companies that have recently been cited.

The summaries include little detail about what violations the companies may have committed and no comments from department officials.

News of the memo alarmed some experts in workplace regulation, who see publicizing violations as one of the most cost-effective tools the department has for ensuring compliance with regulations, such as those enforced by OSHA.

“OSHA is a tiny agency, and if it doesn’t amplify the impact of its inspections it will have very little effect on almost every workplace in the United States,” said David Michaels, an epidemiologist who headed the agency under President Barack Obama. “The basis of every inspection is to increase deterrence.”

A Labor Department spokeswoman said, “The departmental memo is part of an effort to take a more thoughtful and deliberative approach that informs the public about bad actors while allowing accused labor unions and employers the opportunity to defend themselves.”

She added that the recent, consolidated announcements of Covid-related violations were a response to the rising number of such citations — “to make it easier for the public to see all of the establishments.”

Dr. Michaels, who now teaches at the George Washington University School of Public Health, is credited for increasing the practice of issuing news releases when he was at the department.

In 2009, he helped make it OSHA policy to put out a news release in any case where the agency had proposed a fine of roughly $40,000 or more. At the time, Dr. Michaels said the purpose was to discourage other employers from running afoul of OSHA rules. Borrowing from an academic literature on the subject, he called the approach “regulation by shaming.”

An article by the Duke University economist Matthew S. Johnson, published this year in The American Economic Review, concluded that the policy had largely achieved its goals. Mr. Johnson found that an OSHA news release led to a more than 70 percent reduction in violations at facilities in the same sector within roughly three miles of the company cited, and a 30 percent reduction in violations at facilities within 30 miles.

According to Mr. Johnson’s analysis, the releases created negative publicity in the local press, mobilizing workers at other companies to increase pressure on employers.

To have the same impact as a single news release through inspections alone, Mr. Johnson estimated, OSHA would need to perform more than 200 additional safety inspections.

After President Trump’s inauguration in 2017, it was unclear if his administration would continue the practice. But after Alexander Acosta, Mr. Trump’s first labor secretary, was sworn in that April, the department largely resumed its publicity strategy, albeit with less frequency.

Under the Obama administration, the news releases “tended to be scathing, inflammatory, embarrassing for the company,” said Eric J. Conn, a lawyer who represents employers in OSHA enforcement actions and follows the department’s releases closely. “There was a lot of, ‘This company made employees choose between their lives and a paycheck, that sort of tone.’”

“What was really surprising to us was when the Trump administration started issuing press releases again, they maintained those D.O.L. and OSHA official quotations,” Mr. Conn added. “They were maybe marginally less inflammatory, but they still followed that same pattern.”

That appeared to continue through the pandemic. In the second week of September, the department issued a series of news releases citing employers for Covid-related violations. Among them was a release about a plant owned by the pork producer Smithfield Foods and a separate release about a plant owned by its fellow meatpacking giant JBS, both of which were cited for “failing to protect employees from exposure to the coronavirus.”

“Employers need to take appropriate actions to protect their workers from the coronavirus,” OSHA’s Denver-area director said in the release about JBS.

Arthur G. Sapper, a lawyer at Ogletree Deakins who represents employers in such matters, said such releases undermined the rule of law.

“Employers spend decades and resources, often in the millions of dollars, to ensure their good name, and they treat their customers well, and they believe they treat employees well,” Mr. Sapper said. “But with one press release issued by a prosecution-minded agency without any review by an impartial observer, all that can be destroyed. And it stays destroyed even if the employer is later vindicated.”

Mr. Sapper said that he was aware of several instances in which citations were thrown out but the employer could not undo the damage caused by OSHA’s news releases. Mr. Conn argued that the department could just as easily wait until the cases were fully resolved before issuing a news release and still have a steady flow of enforcement actions to publicize.

But M. Patricia Smith, the Labor Department’s top lawyer under President Obama from 2010 to 2017, said publicizing the findings of enforcement actions was standard practice across government, including at the Justice Department, where prosecutors routinely publicize charges before any trial or settlement.

“Press releases are good compliance tools,” Ms. Smith said. “You want the general public, the regulated public, to know what you’re doing.”

She said it was relatively simple for the department to update a news release on its website if the case status changed.

Dr. Michaels said waiting until the legal process runs its course could take years, as deep-pocketed companies contest and appeal. “It will have no effect if it will occur long after the inspection occurs,” he said.