The "Sharing" Economy: Issues Facing Platforms, Participants, and Regulators A Federal Trade Commission Workshop #01100

Submission Number:
Richard Sylvester, J.D., Ph.D.
Initiative Name:
The "Sharing" Economy: Issues Facing Platforms, Participants, and Regulators A Federal Trade Commission Workshop
New federal statutes and regulations appear to be required to prevent cities and states from passing new laws and regulations which would contradict Federal statutes and the US Constitution. For example, a new law passed by the City of Santa Monica, as shown the the attached PDF file. The new law affects interstate commerce and allows the City to take property rights without compensation, and converts ordinary commercial property rental practices ( short-term rentals) into criminal conduct. The effect is a clear violation of the Robinson-Patman act as a form of discriminatory pricing (disguised as a hotel tax, zoning regulations,and protection of low-income rentals. Also, the Santa Monica law appears to violate the Sherman Antitrust Act, by effectively allowing and supporting large hotel chains in their intent to monopolize short term rentals. The required new Federal laws should prohibit cities and states from taxation of short term rentals with unfair and discriminatory procedures and rules which hotels can ignore but which effectively prevent short-term rentals from operating. For example, unusually frequent and prompt reporting of gross rental revenue, disclosure of the names of hosts, guests, pricing, and other private information. Failure to comply with the unusual Santa Monica regulations are made into criminal conduct. It is noted that the short-term rental requirements do not apply to hotels, put only to small private property owners who are hosts for guests who stay less than 30 days. Federal investigation is required to determine whether contributions by hotels to City Council re-election funds were a major factor in the Santa Monica law. Constitutional issues, such as freedom of association, and required compensation for taking of property rights (the right to rent, sent, or buy property, without unreasonable regulations) without compensation. My background includes a Ph.D., MBA, and J.D. I am qualified as an expert witness on economic and financial issues in Federal Court and California Superior Court. I am the author of 14 published books on mathematical economics and tax law, many of which are sold on I am qualified to testify in form of an opinion on matters such as antitrust violations, violations of Federal statutes, and the limits of city and state authority on issues of taxation and regulation of economic activity. I have read and analyzed the short-term rental regulations for several cities in Southern California. There are significant differences is the procedures for passing the laws, such as whether the local residents had the right to VOTE on the proposed regulation, whether there was expert testimony, expert option, independent consulting studies, or other ordinary investigation and review prior to passing new laws. It is noted that when cities. such as Del Mar, put the issues to a vote, the proposed regulations were rejected. However, as in Santa Monica, where there were mere hearings before a City Council, highly unusual and probably unconstitutional regulations were passed by the City Council, without approval by the voters. I have reviewed the local economic effect of short-term rentals. The results of my in-depth review show the following: 1. There is substantial economic benefit to the property owner and the City. 2. There is NO injury to the hotels In summary, new federal laws appear necessary to prevent cities and states from writing conflicting and unreasonable laws which interfere with the ability of private property owners to rent their property to persons of their choice, for long or short terms, without taxes and rules designed to protect the monopoly position of large hotels. I would be pleased to meet with the FTC and Senate Staff specials to discuss the underlying facts and circumstances, and the reasons why Federal actions are necessary. Richard R. Sylvester, J.D, Ph.D. [REDACTED]