Jan. 26–The conference rooms inside Airbnb’s swank new San Francisco headquarters are inspired by listings from the home-sharing website. There’s a Parisian pied-a-terre, an airy living room from Bali, a whimsical flat from Milan.

Then there’s a San Francisco bachelor pad with a leather sofa, blue-tiled fireplace and boxes of unusual cereal on display.

It’s modeled after Airbnb’s first space: the South of Market apartment shared by co-founders Brian Chesky (now the CEO) and Joe Gebbia (now the chief product officer) in 2007, when they were fresh out of the Rhode Island School of Design.

Strapped for cash, the pair had a brainstorm: rent floor space to visitors attending a design conference. With three guests on blow-up beds, they made a decent chunk of change. Those air mattresses inspired the name of the website they threw together — AirBed&Breakfast, since shortened to Airbnb.

Soon they brought in a third co-founder, Harvard-trained computer scientist Nathan Blecharczyk, now the chief technology officer, and officially launched a company in summer 2008, funding it with credit cards.

They’ve parlayed that startup into a $2.5 billion juggernaut with 700 employees and more than half a million listings in 192 countries. Airbnb, which lets people sublet rooms, homes or apartments — as well as castles, boats, yurts, igloos and private islands — to travelers, has facilitated well over 10 million guest nights since its founding. Its bookings are on track to surpass those of the Hilton and Intercontinental hotel chains this year.

Along with that explosive growth, Airbnb has incited controversies about whether it flouts local laws and hurts affordable housing.

Airbnb epitomizes the sharing economy, in which folks rent or swap all kinds of underused assets — spare rooms, cars, parking spots, lawnmowers, children’s clothes or their time.

The new sector inspires almost messianic devotees who say it’s an engine of innovation that creates value out of thin air, conserves resources, empowers ordinary people to be entrepreneurs, and disrupts industries and corporations.

Regulatory concerns

But the sharing economy and Airbnb itself raise a host of troubling regulatory and social issues.

In San Francisco and New York, rentals of less than 30 days are illegal in most multiunit buildings and often prohibited by leases. Both cities want the company to remit hotel occupancy taxes — something Airbnb initially resisted but now says it will do. And both cities, the two most expensive markets in the country, fear that scarce rental housing is being diverted into lucrative Airbnb rentals, even while some neighbors of Airbnb hosts complain that guests are intrusive.

Another concern is that ad hoc inns aren’t subject to the same types of health and safety regulations as regular hotels. Hotels in turn worry that Airbnb will hurt their business.

New York state Sen. Liz Krueger, a Democrat who represents Manhattan’s upper East Side, is a leading critic.

“Airbnb doesn’t seem to have very much respect for the law,” she said. “I understand that they view themselves as a new model of economic activity, dynamism and change. But their assumption that regulations to protect the interests of the entire community shouldn’t (apply to) an online model is unacceptable to me.”

In San Francisco, Board of Supervisors President David Chiu has been working for almost two years on legislation to clarify Airbnb’s legality and address the hotel tax issues.

“It’s a challenging area to grapple with,” he said.

‘A responsible company’

Chesky, 32, says Airbnb’s new model deserves new regulatory approaches as neither laws for businesses nor those for people directly apply.

Airbnb hosts are “people as businesses; I see them as a third category,” he told CNBC on Thursday from the World Economic Summit in Davos, Switzerland, where he’s rubbing shoulders with the likes of Bill Gates, Marissa Mayer, Eric Schmidt and Sheryl Sandberg, not to mention presidents and prime ministers of 46 countries. “As we work with cities, we try to partner with them and educate them.”

Airbnb board member Jeff Jordan, a partner at venture capital firm Andreessen Horowitz, a major investor in the company, expanded on that theme.

“Old regulatory frameworks never contemplated these new disruptive businesses,” he said. “There is often friction and learning as that happens. Airbnb is working hard with municipalities to be a responsible company.”

Janelle Oris, a sharing-economy attorney in Oakland, said she thinks laws will evolve to cover Airbnb and its ilk.

“The early reaction of some cities was to want to ban Airbnb; that’s not a reasonable reaction because it clearly creates economic benefits for cities and residents,” she said. “But if a city has a shortage of affordable housing, it can calibrate policies accordingly.”

One approach might be to cap income from short-term rentals or limit the number of nights, she said.

Most hosts “are regular people who rent or own,” said David Hantman, Airbnb head of global policy. “When they go on vacation a couple of weeks a year, they like to rent out their place, or a room or couch once in a while.”

Airbnb studies show that 90 percent of San Francisco hosts rent out their own residences, and more than half rely on the income to make ends meet.

The company points to examples like Lorraine Rorke Bader, who rents out a room with a bathroom and private entrance in her 1906 Victorian in San Francisco’s Panhandle.

Bader, 68, who works part time as a substitute teacher, said she’s grateful to net about $2,000 a month from the ground-floor room, where her grown son used to live.

“My husband is in assisted living so the money is very important to me to help pay for that,” she said. “I don’t feel strapped. At the same time, it’s interesting and fun to meet the visitors.”

But critics say some landlords turn apartments into full-time Airbnb rentals, removing scarce rental housing from the market.

In New York, Attorney General Eric Schneiderman subpoenaed records on the thousands of Airbnb hosts in New York City, trying to see how many abuse the system. Airbnb is fighting the request as an overbroad fishing expedition, Hantman said.

Growing pains

The company has undergone other high-profile growing pains.

When an Airbnb guest trashed a San Francisco woman’s apartment in 2011, the company was initially criticized for refusing to compensate her. But it soon rallied to assist her. As similar stories emerged, it took out insurance that now guarantees up to $1 million for property damage, and set up a 24/7 customer hotline.

“I remember meeting up with (the three founders) after that vicious incident, and they had worked for days straight with no sleep, and had emerged from the crisis with a better relationship with customers and greater reputation in the community,” said EventBrite CEO Kevin Hartz, an early investor in Airbnb. “In this Darwinist world of growing great companies, that exemplifies in my mind why they will continue to grow and prosper.”

He and others say the three founders bring complementary skills.

“They have great chemistry and balance each other’s strengths and weaknesses,” Hartz said. “They’re a perfect three-piece band — like the Beatles minus one — but now they have a much wider orchestra backing them.”

San Francisco boutique hotelier Chip Conley joined Airbnb in September as head of global hospitality.

“When Brian first approached me, I found him to have one of the most ravenous minds I’ve ever met; it’s like he was constantly in learning mode,” he said by phone from Rome, where he’s in the middle of a 20-city tour to connect with some of Airbnb’s 350,000 hosts.

“The founders are very different people,” Conley said. “Nate is the engineering and logical one. Joe is a big thinker and design-minded person. Brian is getting his MBA on the job, learning business even though he had very little training in it.”

The three hung in during some lean times in their early days.

Making a mark at 2008 conventions

Their first big splash came at the 2008 Democratic and Republican conventions, where they enticed locals to offer crash space for conventioneers via the fledgling site. They supplemented the rental revenue by selling collectible cereal — Obama O’s and Cap’n McCains.

But after that, business subsided. Chesky recalls how he woke up one morning and “had no money and no food.”

The O’s had almost sold out (netting $30,000) but the other brand was less popular.

“For two or three months, we lived off Cap’n McCains,” he told folks at a startup school run by Y Combinator, the accelerator in Mountain View.

It was Y Combinator’s Paul Graham whose interest in the company helped it gain more traction.

Under Y Combinator’s auspices, the founders went door to door in New York, meeting with hosts, photographing their spaces, staying in their living rooms and slowly growing the listings.

Now Airbnb has raised more than $120 million. It’s in no hurry to go public, Jordan and others said.

Early on, many potential investors had reactions similar to that of Jordan.

“When I first heard about Airbnb, I thought it was the stupidest idea I’d ever heard of,” he said.

But after hearing Chesky speak at a startup conference, he was sold.

“I had an overwhelming sense of deja vu; it was like seeing eBay in the early days,” said Jordan, who was a senior executive at the online auctioneer. “Sometimes the odd, quaint, seemingly silly idea turns into a breakthrough.”

For their part, the founders say that facilitating global exchanges is the most meaningful part of their business.

“It’s like the U.N. at every kitchen table,” Chesky said.

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com Twitter: @csaid