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Airbnb: Past, Present, Future

Brian Chesky was born in the summer of 1981. He was raised in the community of Niskayuna, New York. After high school, he attended the Rhode Island School of Design in Providence. Before earning a Bachelor of Fine Arts (BFA), Chesky helped run the school's hockey team, which goes by the nickname NADS. That's right, when fans cheer they shout, “Go NADS!”

You can't make this stuff up. The school's basketball team is known as the BALLS.

In 2001 the hockey team was on the brink of being canceled from the rink, so Chesky, being an enterprising young fellow, decided the team needed a sort of re-branding, an attention grabbing logo or mascot. And what better mascot for a team known as the NADS than “Scrotie.” Scrotie's upper body resembles something like a penile version of Gumby with a double barreled sack hanging below. On ice skates this Scrotie is something else! Google “Scrotie on ice” to view him skating down an opposing mascot.


Along his merry way at the Rhode Island School of Design Chesky met Joe Gebbia. Both eventually moved west to the Bay Area. In 2008 they became roommates in San Francisco. Unemployed and cash poor, Gebbia and Chesky saw opportunity knocking when an industrial design conference was about to open. Most of The City's hotels and motels were booked to the limit at the time, so Chesky and Gebbia purchased three air mattresses and quickly put up a website called Air Bed and Breakfast, advertising short term rental space in their loft.

The duo made enough money to entice Harvard grad and technical architect Nathan Blecharczyk to join them as a third partner. More importantly the new trio of entrepreneurs gained the backing of Y Combinator. Y Combinator was founded in 2005 by Viaweb partners Paul Graham, Robert Morris, and Trevor Blackwell, along with Jessica Livingston (she later married Graham). Y Combinator gives seed money to start up companies. Along with dollars and business advice, Y Combinator also helps the selected start-ups make invaluable connections in the financial world.

Whether it was the acumen of Chesky, Gebbia and Blecharczyk or the backing of Y Combinator, Air Bed and Breakfast transformed into Airbnb and took off to the tune of offices worldwide and more than 50,000 users daily. A report in the Irish Independent claims that one man in Dublin has made 15,000 Euros in less than a year from part-time rental of his apartment in Ireland's capital city. He sleeps in a friend's spare room when paying visitors take over his place.

Don't think for minute that Airbnb is confined to large cities like San Francisco or Dublin, Ireland. There are at least 15 Airbnb rental locations already in Mendocino County. Prices range from $40 per night for a “bungalow futon” in a Fort Bragg residence to $250 for the run of an expansive home on the coast. With the local economy is in the doldrums, or worse, Airbnb seems like a nice way for somebody to augment their income.

Not so fast. City governments from San Francisco to Fort Bragg have figured out that Airbnb rentals are often subverting local business, zoning, and taxation laws and regulations. San Francisco has clearly written Transient Occupancy Tax (TOT) regulations, commonly referred to as a hotel tax for anyone who rents out a guest room(s). In San Francisco that TOT is 15%. The City of Fort Bragg has recently been made aware of some of its Airbnb locations, each of which may face problems with TOT as well as zoning ordinances. Standard hotels, motels and inns, besides paying a percentage of their profit for every room they rent, generally have some sort of business zoning requirement. In other words, you can't start a hotel in a residential area without first getting a zoning change permit from the local planning commission. At least one Airbnb in Fort Bragg is situated in a Harold Street locale that has been zoned residential for decades. In addition, some Mendocino County Airbnb practitioners are completely devoid of any business licensing. Those who are renting cottages and/or rooms outside of the confines of our county’s few cities may soon find the County of Mendocino coming after them for all sorts of taxes and regulation violations. When that happens, you may want to seek legal advice from someone other than a graduate of the Rhode Island School of Design. Go NADS!

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