Hacker News Reader

Comment by wdewind | Hacker News Reader

I'm mostly interested that this doesn't touch on the more basic issue:

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.

View on HN

I'm surprised NYC landlords aren't more up in arms about this.

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.

NYC is scam central when it comes to subleasing and renting out rooms. There are tons of people in rent controlled apartments who have no moral qualms about making a buck off of their sublettor or roommate. Another reason AirBNB is interesting because they are making it obvious who these people are and where they live...

Absolutely. The NYC real estate market is an absolute nightmare in so many ways. Right now it seems most akin to the DeBeers control over the diamond market (ie: an industry based on false scarcity).

No, I think apartments really are scarce. It's not like landlords are sitting on vast quantities of inventory to drive up rents.

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.

Sorta true, sorta false. There are not vast quantities of inventory, but there certainly isn't a shortage. There are loads of "luxury rentals" in battery park city, downtown brooklyn and williamsburg that the developers are having a hard time getting people into, even with all sorts of incentives.

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...

Good luck finding a nice place for < $2000 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).

This isn't actually true. If an apartment rents for more than $2000 it is no longer subject to rent stabilization, and there are various tricks that landlords use to make sure it doesn't fall back under such as issuing rebates or free months and then quoting an effective monthly rate.

Do you have any citations for this? Does it only apply to buildings with more than 6 apartments?

That's actually exactly what's happening in the management companies. If you go an ask for an apartment from a broker in a price range in a neighborhood range you will automatically be told "That's a nice idea, but what youre asking for doesn't exist. Try this one for the same price in a different neighborhood, or try the same neighborhood for $300 more than you would pay."

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).

If there's one rule of new york city real estate, it's that this is always the last apartment in the building, and I always have someone else coming by to sign for it in an hour, but if you sign right now..

Only sort of. Rent control's been phased out quite a bit over the decades and since the financial collapse, market rents are below the rent control caps all over the city. I'm currently in a rent-controlled apt, not paying full rent because the rent-controlled maximum drifted above what the market would bear.

In 2008, you'd definitely have been right.

The problem is the "rent controlled" part IMO. (and over here we don't have rent control and I pay a huge % of my income for my rent, but I still prefer that to the "rent control" thing)

If you are charging more than an apartment is WORTH, then no one will pay.

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.

Reply on news.ycombinator.com