New York governor approves short-term apartment rental ban in NYC
travel.usatoday.com
travel.usatoday.com
The landlord explained that they were having trouble leasing the apartment, and that they were falling back on relying on this sort of rental to help cover the cost of the space. It's a shame this won't be an option in the future, both for poor entrepreneurs and landlords.
One of those sublets would have been legal under this new law.
The first was a vacation rental business, very well run by the owner of the building. I stayed there two months, so it wouldn't fall under this rule, but I was the exception: most of his business would.
Another was a young professional who rented out her tiny one-bedroom in the East Village to help pay for her vacation.
A third was a friend of mine who was out of the country for a few weeks. A win-win situation, I paid her rent and got a place to live.
The fourth was a room in a shared loft with three roommates. The guy renting the room was a photographer who spent the two weeks in Haiti documenting the recovery. The rent money helped fund his trip.
The fifth, the one I'm in right now, was another friend's place. She moved out at the first of the month (due to the availability of her new apartment and her new roommates' schedules) but was obligated to pay the rent through the end of the month. Again, win-win. I help with her rent and have a place to live.
Tomorrow, I move into an apartment of my own. There is a specific no-subletting clause in the contract, and I'll honor that. But I wouldn't have made it moving to the city if this law had been in effect four months ago.
Notice that the person doing this illegal business is the only one benefiting from it. The community will not get any of the taxes that it is supposed to get which are in turn used to maintain the streets, pick the trash, pay police officers patrolling the area, etc. etc. Essentially, the community is paying for an illegal business.
In fact, tolerating the rental of a single room per household strikes me as a good way of separating the wheat from the chaff.
Ironically, even Cuba has such an exception: http://en.wikipedia.org/wiki/Casa_particular
Of the places I've been in, the landlord knew about it and didn't care (not noisy or dirty), or it wasn't active enough to cause anybody to notice.
Plugging a leak, really? I call it shooting the life raft.
If hosting tourists becomes standard practice, this will be reflected in the price of housing, and even more people will be unable to afford homes in the long run as a result.
Especially when you look at vacant spots in hotels, which were zoned and set aside for that very purpose, this creates a significant inefficiency with a lot of unoccupied (and probably mis-priced by an illusory abundance of) space in the city.
Imagine a world where sublets were completely unrestricted on both a governmental and leasing level. If I go on vacation, I would rent out my place. Theoretically, because my place is used 100%, the demand for these massive, overpriced hotels taking up prime real estate in our nation's cities would dwindle - and the efficiency of the city would actually improve.
Instead of locking up this prime real estate in hotels, which are seasonal and affected by economic hardship, we'd enable more people to live downtown full-time, close to their jobs - which would lower transportation costs, monthly housing costs, overnight rental costs, and in general bring efficiency to the market.
I think they surely are paying it. There, it's even again now.
Let me guess, you think people pay the required state tax at the end of the year for all the tax-free purchases they made on the internet as well?
Regardless of the savings in money, the big difference was the proximity.
Now that will be illegal and she will either visit less often or not stay as long.
The landlord/property owner is still paying property taxes, and their utility bills.
Also, as a previous commenter mentioned (jim_h)...
"A tourist who stays at a hotel ($100/night) might only have budgeted $50/day to spend outside of hotel costs."
"A cheap tourist could budget $100/day, stay at a temp place and still get more out of NYC than someone who budgeted $150/day and stayed at a hotel."
But, most importantly, mrtron says...
"I would agree - the money spent on hotels probably doesn't stay as local as money spent on food and entertainment."
Also, you mentioned "what is supposed to be a residential area" - but most of NYC seems to be mixed-use zoning, where you have a commercial entity attached to a multi-family residence, or even have commercial entities at the base of the building.
I've met some very interesting and friendly people in 'short-term apartments'. Mostly foreign students/travelers on vacation, people moving to NYC for work and using it as temporary housing until they find a real place, or just regular Americans visiting another city on a budget.
They make it seem like these places are unclean or unsafe, but they're not any more dirty or dangerous than any other apartment.
But that is a valid concern I suppose -- does NYC benefit from tourists on a budget? If it doesn't then it might make sense to keep them out so tourists "not on a budget" can have more space, visit more often, and consequently spend more money.
I can see how tourists on a budget would not be welcome in many cities. Some places rely on selling overpriced services and items to tourists and rely on tourists coming in and just throwing money around. So making legislation to accommodate certain visitors, but discourage others, kind of makes sense.
Any tourists will bring tax revenues into the city by eating at restaurants, visiting museums and events and generally purchasing goods and services.
"not on a budget" can have more space, visit more often, and consequently spend more money.
If any place in the world operated purely under this assumption, then you would never have urban centers like New York to begin with. Consider that if the demand for hotels was so high that there was no longer enough rooms for tourists that more hotels would be built.
Some places rely on selling overpriced services and items to tourists and rely on tourists coming in and just throwing money around. So making legislation to accommodate certain visitors, but discourage others, kind of makes sense.
It really makes sense for hotel firms, who are likely the ones behind the vast lobbying efforts that helped to implement this law in the first place. They are the ones who stand to garner the extra revenues to be had from tourists who no longer have the option to AirBnB and must instead pay for high priced hotels.
The only way in which this should improve New York's revenues as a government entity is through the room taxes assessed on hotels as opposed to AirBnB-style operations.
This problem, however, could have been remedied without outright outlawing of the practice which seems to infringe on the rights of many property owners who AirBnB in a reasonable fashion (i.e. not purpose built illegal hotels).
Clearly this practice and "couchsurfing" would have to be banned as well if it was purely to recoup these taxes.
If short term visitors outside of the scope of taxation (i.e. me) were putting a strain on the system because of insufficient collection of hotel taxes, then the city has a number of possible outlets. In Europe, for example, many EU citizens of certain age classes pay far less than non-EU tourists for museums - the same could be done with NY residents vs. non-resident.
This is really to say that if there was an issue, visitors should pay for their costs directly rather than obtusely. If in the process of using a short term rental they consume well above and beyond what the property owner would normally consumer on their own (power, water, gas, services), then the property owner should see a rise in costs and pass these costs back onto renters.
A tourist who stays at a hotel ($100/night) might only have budgeted $50/day to spend outside of hotel costs.
A cheap tourist could budget $100/day, stay at a temp place and still get more out of NYC than someone who budgeted $150/day and stayed at a hotel.
Really an unrelated issue though.
NYC -- famous for high cost-of-living. So folks start micro-leasing as a way to recoup costs. Several startups are created as a way to coordinate these micro-leases.
Response? Government steps in and shuts it down.
The reason social problems, like housing shortages and the political responses, are important to talk about on HN is that big companies solve big problems, and nothing happens in a vacuum. Sometimes your biggest competitor can be the political status quo.
I find the governor's remarks true, yet unconvincing. Kind of like a lot of politician-speak. Politicians (of all stripes) learn from the legal, public relations, and polling professions how to take any position on any side of an argument and make it sound somewhat plausible and reasonable for Joe Six Pack giving the entire matter 5 minutes thought.
In the absence of public uproar, this was done for commercial reasons. Dig deep enough and you'll find somebody with a checkbook.
It's pretty simple.
Your worship of government is misguided.
If these things should be regulated because they are of a type of thing to be regulated? Then we haven't really advanced the discussion much, have we?
Maybe you want to have a "big government" argument, but forget all of that. I'll assume you are correct. This is a type of thing that of necessity needs regulation. There are other enterprises just like this one who were not regulated. So why now? Why this? Certainly you don't feel like the actions were just random -- somebody rolls a dice and picks these guys out. I mean, as good and as wonderful and as healthy as all these restrictions are, they have to come from somewhere, right?
Pick your favorite thing you wanted the government to do or not do over the last 20 years that never happened. Why did the government do some things and not others? Is there some secret logic or calculus that is used to determine which things to fix and which not to fix? Or is it just votes?
I mean, you understand the reason for political parties, right? The use of force to protect interests. The speeches are all about bunnies and apple pie and protecting orphans, but bunnies and apple pies and orphans don't vote or make campaign contributions, do they?
Sorry about the cynicism, but there's a very interesting economic lesson going on here that has to do with startups, so I thought it worthwhile to point out.
Not trying to get in an argument, although I have no doubt that I've gotten into one. So I'm done here.
I find ,in this instance, it simply amazing how quickly the government was able to come to the aid of big business when big business was threatened by a startup.
In other instances, we have observed this at the federal level, but it takes many years, lobbyists, and congresscritters to do so (DMCA, ACTA, etc).
Imagine if the newspapers were able to prevent craigslist's success by protecting the newspapers' classified advertising revenue through state legislation, requiring licensing fees and inspections for the distribution of classified advertising within the state.
I can imagine many other startups being destroyed by this type of "necessary regulation".
I must say, that besides money, this must be one of the best validations of a startup's success. Unfortunate, though.
Restaurants? Regulated. Car rental? Regulated. Retail? Regulated. Banking? Regulated. Hotels? Regulated. Bed and Breakfasts? Regulated in the state of New York. Bars? Regulated. Movie Theaters? Regulated.
Name me one thing that isn't regulated, subject to zoning, subject to inspection, subject to fire and/or safety codes?
It isn't a matter of big government or whatever weird diatribe trip you are on, it's a question of consumer protection, it's a question of taxation, it's a question of safety and fire codes, and it's a question of the rights of other tenets living in the building to not be subject to a random rotation of people in their homes.
http://politifi.com/news/Students-young-professionals-duped-...
http://ny.curbed.com/archives/2010/03/26/party_boy_bounced_f...
Also, isn't this a part of what New York is? I'd love to live in this city for a month or two or what is possible on a visa, but this will make such dream impossible.
Further, long term tenants know they will have to see and get along with each other so there are further incentives to not being noisy or obnoxious.
On the other hand, short term tenants often want to party and have no such incentives not to be shitty neighbors. This isn't merely theory but also my experience living next to a short term place in SF. Thus, many denizens of NYC and SF do not want such neighbors.
Yep. Nothing happens without a member of some good old boys' club benefiting from it somehow.
Im going to guess that these laws will become more prevalent soon unless airbnb & co start become proactive about keeping track of all the relevant taxation.
The hotel chains aren't evil, but they have their interests and I don't doubt they're giving the extra push for this to go through.
At the point you are doing that with any sort of regularity you should be subject to licensing, insurance, etc.
Whomever downvoted me, you are telling me that you wouldn't mind a constant rotation of complete strangers taking residence in the apartment across the hall from you with no recourse for liability?
If you disrupt the neighbors with loud musics, wild partying, etc, you will pay a fine. All the neighbors have to do is sue you in court and it should be easy to prove it so.
That will kill many birds with one stone and eliminate vectors that allows people to choose winner and losers for political reasons.
Even for small claims court, it's a pretty big burden to file suit. This regulation may not be the best answer, but let's not pretend that short-term rentals don't engender problems for the neighbors, or that all those problems can be ameliorated with more lawsuits.
Also, why is this problem engendered by only short-term renters? Can long-term renters, and even property owners be rude, loud, or obnoxious?
This law will do nothing to protect you from 'those' types.
You support increased government regulation, when there exists an existing legal process to handle such "problems".
A pretty big burden? It is small claims court for a reason. If you are intelligent enought to post and read HN, you should not be burdened by filing a small claims lawsuit.
At least now there is a process in place to deal with the owner of the property. Wait until the owner loses the property and vagrant squatters take residence.
Begin the burden, here: http://www.nycourts.gov/courts/nyc/smallclaims/startingcase....
Then make it less of a burden to file a lawsuit, and make it easy for people to prove and disprove that there was indeed noise pollution or whatever.
Of course, the state have a monopoly on the court system, so that might be a difficult problem.
We don't need new laws, as that will make more things complicated in a land that filled with overly complicated unclear laws.
Make it so that laws are as simple and understandable to the average citizen as possible. Make it so that competent judges are selected. Make it so that the system is efficient in handling out appropriate and fair judgement. Then make laws that make sense without allowing people to convert their dollars to political power.
In the first place, people shouldn't use the laws as solutions to every single problems that they might have.
You have never had experience in NYC Housing Court. I have. Keep dreaming, though.
It might be rather difficult to fix the courts, but it's lot better than adding regulations that probably benefit the entrenched business interests.
City planning is something complicated where I'm not so sure a pure market-driven solution would be optimal. Markets only allocate resources well when there are no externalities. They do nothing towards a fair distribution of wealth. A good example of poor city planning caused by the market is the housing bubble.
I don't know the situation in New York, but if hotels were in fact crowding out the poor from the city, it would be perfectly legitimate to ask if this is desirable.
What is the "fair distribution of wealth"? I personally believe that you are only entitled to the wealth you yourself created (or which someone voluntary gave you).
Isn't that a fair distribution of wealth? Or what other metrics do you use?
Whoever planned that part of NYC did a pretty good job of fair distribution, I think. Some for everyone to enjoy, some taxes taken for upkeep, everyone's a winner.
I don't think the market would do a good job of allocating that resource.
I come from a lower-middle class background ( military family during the 80's and early 90's ), grew up in many different small cities and never finished high school. I am in my mid 20's now and have the wealth that people here like to refer to as 'FU Money'
It is usually the duty of parents to raise their children (and pay for their education). The left however feels that it “takes the village to raise the child” (nice way of saying that someone else should pay for education, etc…). This means that dysfunctional people and families can externalise the consequences of their actions.
If we think of it in a crude way: wouldn’t the most fit evolutionary strategy in such a system be to just get as much children as you want? Since someone else will bust their but to pay for the raising and education of your child.
This is unfortunately what happens in many countries, and it is quite sad. In my country there are 13.4 million people on government grants and there are 12 million people working. Of those that work, only about 3 million pay tax (75% which is paid by 750,000). Of the 13.4 million receiving “social grants”, about 9 million are child grants (government pays them for each child under 16, thereby encouraging people to get children. Many people receive the child grant from their children before they stop getting their own grant).
The point of this is that each tax payer is paying to raise 3 children that are not theirs. Is that fair? Should someone really be allowed to get children if they cannot afford them?
This is also one of the reasons I believe that democracy does not work in most countries – especially countries with a high population or which is not homogeneous.
The excuse of “family location” is BS. Many people have put off or postponed having children until they can afford them, and at least kept the number of children to a minimum. Many people also at least put in the effort to raise the kids that they have properly.
Probably not, but there's the rub. How do we prevent this? Perhaps if we refuse to bail them out... but are you willing to watch a child starve to death? Will you be the one to pull the plug?
The second thing is to force mothers to reveal the father of their children. Many do not inform the state who the father is, therefore forcing the taxpayer to pay for raising the child instead of the father.
And probably the best option would be to implement policies similar to China’s one child policy. A good example would be forced sterilization after 3 children if the person receives any form government welfare (or already have kids and is imprisoned).
But in any case, well before this point, the state can spent money on voluntary sterilisation campaigns (i.e. paying the poor and drug addicts to be sterilised).
Another reason is longer life expectancy and subsidized health care. In the old days, a person inclined to irresponsible reproduction will not live that much longer than a person without. Now there are many countries with an average fertility rate well over 6.
Another reason is that it reproductive responsibility has been shown to work. Compare China to every 3rd world country (e.g. 50 African countries and India). Their one child policy not only stopped untold misery, but created the bedrock for future prosperity.
In a city, you cannot say that you have sole right to a piece of property, to do with as you please. Everything's too packed in together. If you're blasting music at all hours of the night, that alters the composition of the air around you. That may increase or decrease wealth, depending.
To put it simply: the wealth of New York City was mostly created by the city; the plumbing, the roads, the zoning laws, the building codes, the fire departments. The city government is the only entity that can really claim to have created that wealth. An individual building owner's contribution is very small.
If we divide all the land in the world equally, within 20 years some people will have more and some people will have less (due to differing productivity and non-coercive selling). This isn't unfair - it just means that some people are unproductive.
> In a city, you cannot say that you have sole right to a piece of property, to do with as you please. Everything's too packed in together. If you're blasting music at all hours of the night,
Yes you can. Blasting music is a different story - you are effecting your neighbour's quality of life (and destroying his property value).
But trust me, you can do anything on your property as long as the neighbour doesn't hear or see you.
> To put it simply: the wealth of New York City was mostly created by the city; the plumbing, the roads, the zoning laws, the building codes,
The wealth in New York city is created because highly skilled people are close to each other (a type of network effect). Just because the demand for property is higher (and therefore the asking price) doesn't mean that the wealth represented by the property is created by the state.
Sure, but in another 50 years many of their children will have just as much land through none of their own doing. If others could have used the land better, I'd say there's a good deal of unfairness there. It's possible life could have been better for everyone if not for inheritance.
>Blasting music is a different story - you are effecting your neighbour's quality of life (and destroying his property value).
Eh? That's the sort of thing I was talking about. You have the right to do what you want, within reason. But that said, you can't for example use residential land for a commercial enterprise beyond a certain point, and there are good reasons for these sorts of zoning laws.
On your last point, the state is the proxy by which we as a group determine how to divvy up that wealth that cannot be directly attributable to any one group. Again it is imperfect, but it's better than letting those who own the land have the entire say, because they are not necessarily responsible for the value in that land.
Can't people give their wealth to whomever they want (while they are alive or dead)? In a system such as yours (where the state comes and takes all property like a vulture after someone dies) it means that every old person should spend all his money before he dies. He should also stop working (as many old people (at least in my country) spend their lives working for an inheritance for their children).
I guess such a thing such as working to provide for your children and grandchildren is wrong in your books.
Here is another example in my country: many farmers have children and teach their children farming. This is the only skill that some of them can transfer. The children works on his father's farm. If there are two sons the father will try and buy extra land. The children inherit and divide up the farm after the father’s death. You thus get people living generations on the same farm.
In your ideal communist system, the child will lose his home, his father and his job (through the sin of inheritance).
> It's possible life could have been better for everyone if not for inheritance.
If all wealth is divided up after inheritance, the best (evolutionary speaking) strategy would be to have as many children as possible. That way, your offspring can have a larger share of someone else’s inheritance.
The idea of the far left, of trying to steal someone’s property after he dies is pretty reprehensible for me. What is worse is their motivation for it. The idea that an individual’s rights (and property) are subservient to the majority. What you are basically saying is that if something is good for the majority, the minority or individual does not have rights.
Neither extreme sounds terribly pleasant.
Economists don't even try to answer the question of which distribution of wealth is fair. That's why mainstream economic theory does not concern itself with this question. All the economists say is that everybody should be richer if markets work well, they have no opinion about how rich the rich should be.
However the distribution of wealth is a very relevant question to a great number of people. If a majority thinks the outcome of the market is not satisfactory, they can correct it with politics.
I don't believe your example is a good one, because the housing bubble was not caused by the market. It was caused by irrational expansion of credit. Of course the market is the expression of what people want, but those "wants" are heavily distorted or encouraged by monetary policy. There is no market in the money making business (it's a government controlled monopoly).
That's how a representative democracy works, but that's only one form of democracy (and unfortunately ours).
I always thought that the market was created by two people engaging in a voluntary exchange of goods and services.
I'm not 100% sure about the "laws are created by politicians" bit, either, seeing as most politicians scarcely even read most legislation, much less understand it. Although I suppose you did qualify that as the way things should work.
"laws are created by politicians" probably differs between countries. I wonder which is worse, politicians that don't really care about what they sign or politicians that do care. An incompetent politician that do care is a frightening combination.
Now add to that the fact there are external costs to short term rentals (random renters through more wild party's) and banning these seems reasonable to me.
If people are causing noise disturbance to others. it's reasonable that there be legislation that covers that specific case, regardless of how long the people are staying in the apartment. Because otherwise you're penalising all short term letters for the misdeeds of a few, which is wrong.
Really? Can you back that up. Data please.
It's an anecdote, not data (but still more than you've got): In my four months being a random renter I've thrown exactly one party. It was a brunch, and two people came. Not wild at all.
I've been to a number of parties that were much "wilder." All thrown by regular tenants. The wildest was attended by the building's doorman.
But the problem is when most voters don't care about a particular issue, and a small minority (in this instance hoteliers) do. I would introduce reforms to partially overcome these problems:
1. politicians can only make something illegal with a super-majority (say 55 or 60%). This means there is an automatic bias towards liberty.
2. recall elections for politicians at all levels
3. ban businesses from donating money to politicians. It just creates too many opportunities for corruption.
4. all legislative assemblies to be elected by proportional representation. This would mean genuine voter choice rather than 2 monolithic big parties.
5. all assemblies at lower than the country level (which in the US, means state governments and below) are allowed to legalise any activity made illegal by a higher government on a straight 50% of the vote. As with (1) this is also a bias towards liberty.
6. any law passed by any assembly must be subject to a referendum if enough people want it.
Doesn't stop anyone from in-town either. I lived for a year in a place that the upstairs neighbor stomped everywhere as he was morbidly obese and had to use the toilet frequently. The neighbor on the right played rap and hip-hop at max blast from midnight til 6 am, often leaving it on all day when he left to work. And the couple on the other side had rough sex nightly. And even more interesting is that this place was in a decent part of town, not some slumhole.
> frequently moving in and out as neighbors You mean, like a hotel? There is one two blocks away from my house. Never been a problem. Or, are you more refering to something like transients? My subdivision has a lot of them, Bosnian families moving in extended family, finally getting their gov't grant, and moving out. Hasn't been a problem either... well, except for this one guy, but that was resolved and he wasn't a transient, he owned the home. Is your stance from a fear of strangers and foreigners?
I don't see your arguemenst fit into the equation at all.
As for permanent neighbors, call the board or your landlord. Either should happily fix that problem for you.
It would be great if more people knew that.
In which case, what's to stop AirBNB from adding a "trip purpose" selector to their site which would default to "business" when a property in NYC is selected.
And if it does stop business short-lets, why isn't that industry up in arms about this?
http://www.thefreelibrary.com/Theres+nothing+liberal+about+r...
http://www.nber.org/~luttmer/rentcontrol.pdf
Search http://www.streetsblog.org/2010/02/10/nycs-rent-stabilized-p... for "rent control"
I was going to AirBnB a few separate places in different parts of NYC for a month or so, but now it looks like I should do just one. If all of the daily-rentals have to convert to 30+ day rentals, it should increase supply by a lot more than the number of people willing to switch from short stays to longer stays.
Combine AirBnB w/ Zipcar, but for RVs.