When innovation meets regulation
Why Sonder works with cities, and not against them.
It’s become commonplace for tech startups to bypass regulators in the name of innovation. New technologies and product categories seldom fit neatly within older regulatory frameworks, and seeking forgiveness from authorities rather than permission has become standard operating procedure for companies with a “grow at all costs” mindset. But at Sonder we take a different approach, because the cities where we operate are also the ones we call home.
The hospitality sector, which has seen the meteoric rise of homeshare platforms, has presented new challenges for local governments. Global spending on travel is on the rise and consumer preferences are rapidly evolving; visitors crave more authentic and diverse accommodations, like flexible living spaces and more variety in locations that extend beyond the same downtown corridors near the convention center.
Modern travelers want to experience cities like locals, at times creating points of friction with those who actually are. Cities have struggled to find a balance and meet the changing demands of visitors while preserving the quality of life for long-term residents. As Sonder’s public policy manager, I’ve experienced firsthand how difficult and complex these issues are for local officials to grapple with in a way that they believe is balanced and equitable.
This is where Sonder strives to set itself apart. Through countless meetings and conversations with local elected officials, regulators and community organizations in each of the cities where we operate, we’ve listened and learned about the unique issues they face. We’ve taken those lessons to heart and applied them to how we operate and grow our business across every city.
Always Above Board
We work closely with regulators to ensure that Sonder is always compliant with local laws, including zoning and building codes. Sonder also pays all required sales and occupancy taxes. While operating above-board may not be the most efficient or cost-effective growth strategy, it’s a commitment we’ve made as a company to be a responsible neighbor and community member.
Good Neighbors
Sonder only operates in mixed-use and commercial zones. Our spaces are located in busy parts of town — walking distance from restaurants, shops and museums — never residential neighborhoods. And because Sonder controls the entire guest experience end-to-end and professionally manages each space, we’re able to eliminate many of the nuisance issues associated with homeshare platforms that concern local residents. We leverage technology and our local operations teams to ensure trash collection, noise management, and safety concerns are never a problem for neighbors.
Operating Locally and Giving Back
At its core, Sonder is a local business. Every market where we operate has its own General Manager and a team of 20–40 people that live and breathe the city. We lease our spaces directly from local building owners and partner with small businesses to help support our operations, including, housekeeping, storage, moving, architects, real estate professionals, painting, photography, maintenance and other services. A large percentage of the revenue we generate is reinvested locally, contributing to the economic growth and vitality of every city where we operate.
When I explain Sonder’s unique model to local officials they’re often surprised. Alternative accommodations are commonly lumped together in a single category despite being highly diverse and nuanced. Regulators accustomed to the disruptive mindset of Silicon Valley are pleasantly surprised when they are approached proactively by a company looking to launch and grow within their city. But these relationships are everything to Sonder, because we’re so deeply ingrained in the community.
Helping Cities Solve Problems and Meet Future Challenges
Few things excite us more at Sonder than the future of cities, which is why we’re committed to helping them address current and future challenges and pave the way for prosperity and growth.
Sonders are typically located in newly developed or renovated luxury buildings. When these buildings are completed it can take anywhere from 18–24 months to reach their target occupancy rate, restricting developers’ ability to break ground on new residential projects. With a tenant like Sonder leasing a portion of the building as soon as it delivers, developers can quickly stabilize buildings, move onto new projects and hire more staff.
Sonder leases are investments in the local real estate market that allow more housing to be developed. This includes buildings that will create new affordable housing units in order to meet inclusionary housing requirements, which is one of the few ways new affordable housing units are being developed in cities today.
As Sonder grows within cities and our partnerships with local developers strengthen, we’re actually able to incentivize and help finance the redevelopment of underutilized or blighted properties. As an example, Sonder recently helped finance the redevelopment of a building in New Orleans that had been vacant since Hurricane Katrina, allowing the remaining portion of the building to be priced as workforce housing. We’re embarking on similar projects in cities like London, Vancouver, and Chicago where we’re partnering with developers to renovate underutilized buildings and bring flexible accommodations to market. Partnerships like these are at the core of how Sonder will continue to grow — helping cities meet goals for new, affordable housing and bringing new investment to areas that need it the most.
Even just a decade ago it would have been impossible to anticipate how differently people would live, work and travel today. Technology has played a key role in that — creating efficiency, opportunity, flexibility and connectedness that has permanently altered our standards and challenged long-standing industries and mindsets. At Sonder, our goal is to help bridge that change — to thrive through leadership in both innovation and social responsibility.
-Melissa Heuer, Public Policy Manager, Sonder
