CryptocurrencyLeadershipInvestingClimate ChangeMost Powerful Women

Airbnb cozies up to cities

March 26, 2014, 9:01 PM UTC
Fortune

The “sharing economy” pioneer launches an ambitious new partnership with Portland, Ore. — and a new model for enriching the cities in which it operates. (Think philanthropy, free smoke detectors, and … a way to collect taxes.)

Portland, Oregon

FORTUNE — For all of Airbnb’s rapid growth, reports of its latest mega-valuation and its pioneering place in the sharing economy zeitgeist, the company’s reception in — and relationship with — the cities in which it operates has been less than smooth. Some municipalities say it should pay taxes. Others say its dwelling-sharing practice is illegal. To address some of these issues, and to try to become more of an asset to the municipalities it serves, Airbnb today will unveil a new ambitious plan for a concept it calls “Shared City,” a multi-faceted collaboration designed to give back to the communities it serves — beginning with the city of Portland, Ore. and expected to be rolled out to cities around the world.

“Imagine if you could build a city that is shared,” Chesky writes in an in-depth post on Medium laying out the new plan that feels somewhere between Jane Jacobs meets Richard Florida with a 2014, shareable-economy twist. “Where people become micro-entrepreneurs, and local mom and pops flourish once again. Imagine a city that fosters community. Where space isn’t wasted, but shared with others.” In the post, Chesky describes his vision for “Shared City,” a new initiative from the company to “help civic leaders and our community create more shareable, more livable cities through relevant, concrete actions and partnerships.”

So, what does that mean exactly?

MORE: Rahm Emanuel: Given a choice, Americans want cities over burbs

For Portland, Ore., it means a plan to leverage the Airbnb community to contribute economic, social, and environmental improvements to the city. The multi-pronged arrangement is as ambitious as it is specific: For starters, under the new deal, Airbnb will make it possible for hosts to donate a percentage of the money they earn on Airbnb to a local cause — to determined by its hosts and the city of Portland — and it will match the donations through a percentage of its fees.

Part of the deal is connected to the company’s new companywide push on home safety: Airbnb will also make free smoke and carbon monoxide detectors available to every host who requests one in Portland. (The company now requires that all hosts install smoke and carbon monoxide detectors by the end of 2014.) The company has also started working with the city’s Bureau of Emergency Management to establish training programs to help its hosts respond to crises like natural disasters or other local emergencies.

Airbnb is also working with the city’s tourism bureau, Visit Portland, on joint campaigns to promote the city and its small businesses — and it says it will work to weed out “corporate property managers who abuse our platform, hurt the city’s housing stock, and give guests a bad experience,” according to Chesky’s manifesto.

Perhaps most notably, the company says it is finalizing a plan with Portland to collect and remit taxes to the city on behalf of its hosts. Under the new proposal (yet to be approved by Portland’s City Council), Airbnb would collect an 11.5% tax based on what guests pay to hosts (the 11.5% representing the City of Portland’s 6% and Multnomah County’s 5.5% transient lodging taxes). The tax would be collected by Airbnb out of guests’ payment and sent quarterly to the city of Portland.

The partnership represents months of discussions with Portland Mayor Charlie Hales. “We get a lot of questions about, ‘What is going to be the fate of Airbnb and cities?’” Chesky tells Fortune. “I wanted to proactively put together a vision for how we can work with cities.”

MORE: Brian Chesky and John Donahoe on the best advice they ever got

The proposal to collect taxes also marks the first official attempt to address some of the company’s vexing tax issues.

Last October, Chesky publicly said that Airbnb believes its hosts should be paying local taxes. But he says it’s complicated to mandate that they do; coming to any agreement, the company has found, involves partnerships, complicated red tape, and in some cases changing laws to make it possible. “It’s shockingly complicated and takes a lot of work on both sides,” he says.

Under the current Portland proposal, it will be up to hosts to decide whether to charge the tax — and whether to raise their prices to account for it. “I think they’ll have to make the decision of what they do with the pricing,” he says. “It’s not a huge amount.” ‘

But the Portland deal is the first of a new model Chesky hopes to export to other cities — a handful at first, then dozens, then perhaps “a lot more in a long-term scalable way.”

A key element to the Shared City initiative is that its concepts and principles can be adapted and molded to each city’s specific needs. Some cities might need help with homelessness, for example, while others’ priorities may be attracting tourism or drawing funding for the arts or, yes, collecting taxes — all goals Airbnb is prepared to leverage its community and footprint to help with.

Chesky says the company has had discussions with a half-dozen cities already and hopes to sign up “a handful” more by this summer.

MORE: One more reason not to spend your bitcoin

Many tech companies have become enamored with urbanism of late — witness Tony Hsieh’s redevelopment of downtown Las Vegas, the new social network for neighborhoods, Nextdoor (“neighborhoods were the original social network,” the startup says) or the carefully designed urban elements of Facebook’s campus. But with this new array of public-private partnerships, Airbnb is getting deeper into the weeds. The Shared City program comes out of the company’s civics team, a division headed by Molly Turner, Harvard-educated urban planner (see the essay Turner wrote about being an urban planner in the tech world).

In May, Airbnb will be a main sponsor of Jane’s Walk NYC, a weekend-long festival of guided walks that celebrate the legacy of the urban activist Jane Jacobs. Chesky himself has been reading up on urban planning books; his manifesto explaining the concept goes back to the origin of cities and calls them the “original sharing platforms:” “They formed at ancient crossroads of trade, and grew through collaboration and sharing resources.”

The Shared City venture is also the result of Chesky talking to hosts and holding meet-ups in various cities over the past year asking members of the Airbnb community what they cared about. “The idea kind of came out of real life,” he says. He penned the Medium post over the New Year holiday this year while traveling through Asia.

“I really, really want to have a great relationship with cities,” he says. “The last thing I want to be is in an antagonistic place with them,” he says. “We want to enrich the cities and neighborhoods we serve.”

Chesky says he first thought about calling the program “Model City” but thought “Shared City” was a better representation of the company’s overall mission.

“We wanted to do something proactive in a city to show what’s possible,” he says. “I hope this shows what more is possible.”