NY hotels trying to outlaw short-term home sublets (i.e. AirBnB)
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- Cities that rely on tourism generate revenue from hotel "bed taxes" which are often higher or in addition to sales tax
- People who are making money on AirBnB by renting out rooms probably aren't paying income tax on it (call it a hunch)
- All the sublease/short-term laws that exist already. For example, in Shell Beach, CA (near where I'm at) you cannot rent a house/room for less than 1 month. People on VRBO are already sketchy about this when you call.
- I still see significant liability issues for both sides. Seriously, what happens if you rent out a room illegally and the guy/gal slips and falls in your shower? What if your dog bites them?
I want AirBnB to do well, but could enough local/state government regulations threaten their growth/existence?
Over time, a city like NY will most likely see a drop in tourism if (a) if the vacation rental industry is removed from the playing field, and (b) hotel prices stay the same (or go back up to 2007 standards). There is a large class of travelers who cannot afford NYC on $300/night rates, and will likely still travel, but choose to spend their money elsewhere.
Second, I think the comparison to VRBO/Homeaway only goes so far. Those 2 sites cater primarily to vacation/2nd home owners (i.e. renting out an entire house/condo for week). You don't see many "Rent out my extra bedroom for $60/night" listings on there. Unless I'm mistaken, that's where AirBnB differentiates itself and, IMO, makes it more risky.
Too frickin' bad? I'm of the opinion that taxes should be in compensation for the service provided by the government. What service is being provided here? It makes me angry that just because someone is making money off of something that taxes must sharecrop off of it. As long as the host files their 1099 that came from AirBNB, it seems fine to me. Why is it that a person can stay over and it's no problem but when they pay money it's a huge issue? It makes me think. If this is hurting the hotel business, too bad! Maybe they should look to change their business model instead of trying to pass laws to protect their current one.
Come to Pismo Beach (where I'm at) on any Summer weekend. 75%+ of the people on the beach are from out of town. Should I pay higher property taxes to pick up their beer bottles and pay for the extra police officers that need to be on duty?
http://www.noozhawk.com/local_news/article/042110_bed_tax_up...
Santa Barbara, which is a medium-sized city at best, generates over $11M a year in TOT/Bed taxes.
Do you think they're just going to sit by and let people eat away at that revenue? No way. They're going to have "Richard from accounting" monitor AirBnB and other sites–and start threatening people. Maybe they'll give them an option to remove their listing or register and start paying taxes. Since no one will want to go through health and fire code inspections or worry about taxes, they'll just remove it.
That's all speculation, of course. But enforcement can't be too difficult (at least, not on the RIAA level).
While there, my girlfriend dug up a bunch of stories about the neighbors complaining about condo unit owners leasing out units to this place. I can understand both sides of the argument; if I'd just bought a condo in a building I wouldn't be happy about a large majority of the other units being rented out every night to tourists.
I got the distinct impression that there had been a problem with crime and people being disruptive in the buildings recently, although the whole time we were there it was quiet.
Apparently the owner of this hotel has approached a bunch of building owners with vacant condos and offered to lease them. The building owners are very happy (as apparently they are getting more then they would to rent them as apartments).
I will say that I stayed in a giant two bedroom loft in Williamsburg for about half the cost of a "regular hotel"; so it's definitely appealing.
After checking out, I actually got an email from the hotel with the number for New York Speaker's office asking us to call them about bill Bill A10008.
You can have a noisy neighbor, go through a lengthy feud involving building administration and law enforcement, and finally make them reasonably quiet at night. Now, try doing that with the tourists who are in just for a couple of days and don't give a damn.
You can have a neighbour who trough airbnb rents out to noisy tourists, go through a lengthy feud involving building administration and law enforcement, and finally make sure he makes sure it's reasonably quiet at night. If any changes in laws would be necessary to make these processes identical they should be smaller and less disruptive than an outright ban on activities like those of airbnbs lenders.
AirBNB is illegal not only due to short term hotel law, but also due to sublease law in NYC. You CANNOT sublet an apartment for more than it is worth in New York. I've met and heard of more than a few people who rent apartments and use AirBNB as a primary source of (as OP points out, untaxed) income. I'm surprised NYC landlords aren't more up in arms about this.
I don't agree with making it illegal outright, but I actually am kind of in favor of regulating and taxing this better, for the issues the OP talks about as well as the sublease issues.
Edit: After thinking about this a little more I realize the OP goes 90% of the way but doesn't quite cross the finish line with the argument. AirBNB IS the regulatory institution, and is doing a better job than the govt. My sublease point still stands.
Me too. I run a vacation rental site and many property owners in the VR community are not happy with AirBNB.
It's not because they don't want the competition. They are all used to competing with other properties in their area. It's because they want a level playing field.
Many areas require vacation rentals to be licensed and/or charge a tax on their rental fees. These VR owners don't like competing with AirBNB room owners because the VR owners presume - rightly or wrongly - that the AirBNB room owners are not properly licensed or collecting the appropriate taxes.
I think AirBNB is a great idea and this proposed NY law goes way too far. They shouldn't be legislating innovative ideas like this out of existence. They should be finding ways to equitably welcome the AirBNB model into the existing fold.
That said, rent regulation (mostly rent stabilization vs. rent control, these days) does skew the market, creating a small number of lottery winners lucky to have below-market rents and driving up rents for everyone else competing for the unregulated inventory, regardless of their economic status.
The prices are pulled out of thin air. The new developments have to charge usurious rents to recoup their costs, but a lot of individual owners bought their building outright in the 80s for peanuts and just charge whatever they think they can get. Any old building in the LES or east village is basically a mint for the owner.
There may be a shortage of affordable, nice apartments in places where people want to live. Good luck finding a nice place for < $2000 in the LES. However, there is no shortage of expensive, crappy apartments in "uncool" parts of the city. In a weird twist of reality it's now easier to find a good deal in the UES than it is in the LES...
Fun fact: if an apartment is rented for less than $2000, it becomes subject to rent stabilization.
Many landlords would rather have an apartment go vacant than become subject to rent stabilization. Better to lose a year's worth of rent now than 20 years worth of rent in the future, not to mention loss of flexibility (i.e., you can't sell the apt without permission of the tenant).
If you are trying to move to a similar apartment that you are in, in the same neighborhood, for the same price, you will be told your apartment does not exist.
If you go to a management company trying to get into a big complex like StuyTown or any of the luxury rentals you will be quoted a price that is pulled out of thin air, and you will be lied to that "this is the last apartment available in XYZ highrise."
In short, managers are absolutely sitting on the best deals because they ALWAYS try to move the riskier product first. As the market gets worse, there is more risky property available, and thus it is even HARDER to find a good deal in a bad economy through brokers (the current gatekeepers of the market).
In 2008, you'd definitely have been right.
I think you mean it is illegal to sublet for a profit (receiving more from the tenant than you owe to the landlord) which is not the same thing.
http://cityroom.blogs.nytimes.com/2010/06/29/bill-could-make...
It was a way better experience than using a hotel. He actually double booked the room for a couple of the days, so he gave us a different apartment in Manhattan for those days. We ended up getting to experience more neighborhoods on a deeper level than we would have otherwise. You could always split a trip between two normal hotels, but they usually aren't in actual neighborhoods.
Making this illegal is dumb, and it reeks of wholesale purchasing of legislation.
How good would the experience be if he didn't have that second apartment?
Also amazed that neighborhood groups have "Illegal Hotels Committee"s
NYC is close quarters. It's not necessarily cool to have a different set of partying neighbors every day of the week.
That said, I'd rather live with this than cut off opportunities/efficiencies created by airbnb!
I still have his drunk assholes peeing on our garden once a month.
Get a dog.
Although I guess it'll only solve the problem once per guest.
http://www.theatlantic.com/food/archive/2010/03/going-rogue-...
One way to approach enforcement would to be to set a threshold on the number of units a room provider can offer without being subject to the hotel regulations. AirBnB can easily enforce such restrictions.
The rise of those kinds of operators has definitely made me warier of using AirBnB now, while I used to be able to assume that most listings on the site were legit individuals renting out rooms/couches in their own homes.
I guess if you put in the contract how much it costs per night they'd at least legally owe you in full.
Short term sublets are already outlawed in some neighborhoods of London (e.g. Belgravia, with a potential fine of ~20k pounds). There is also a similar law in Paris since last December, although as a matter of practice it is only enforced after complaints from co-op boards and neighbors who get annoyed at the constant stream of vacation renters. The hotel lobby was behind the law in Paris. Part of the justification was also that owners of short-term rentals, often foreigners themselves, do not declare the rental income on the properties.
Prior to reading some of the comments from NYC residents, I was vehemently opposed to this kind of government interference, but now I'm not so sure. It would suck to live next to some of these people.
I wonder if entire building communities could vote on whether to allow this individually so either everyone agrees or disagrees and then has to live with it.
The "not for very long" part still stands.
If we're not going to get the benefit competition would bring at least we should get tax revenue out of it.
Instead of advocating an idea that attempts to turn two wrongs into a right (tacking more regulation onto a problem you admit is caused by regulation), advocate for something more fundamental: the complete separation of state and economics.