New York’s Draconian New Law Against Airbnb is a Disgrace

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By Brett Arends | 8:07 am, October 28, 2016

Who do the people running the state of New York think they’re kidding?

The draconian new law they just passed against Airbnb isn’t to protect the middle class, the working class, quiet neighborhoods, respectable homeowners, or out-of-state visitors who don’t want to die in a firetrap.

The entire purpose of the law is to protect New York’s rich and greedy hotel operators at the expense of everybody else. It is to shore up their fat profits by banning a strong and growing competitor. That’s it.

Thanks to this law, you and I will pay even more money for that lousy shoe-box in Manhattan with the rattling radiator the next time we visit the city. The extra money will go to those poor, hard-up people who own the big hotels. Some of them are down to their last billion.

Naturally they’ll share the love… with the legislators who passed the law. Cha-ching!

If only Abbie Hoffman were alive today: This law is so blatant, wicked and corrupt that it is crying out for some really clever civil disobedience.

The new law, in case you missed it, will slap fines of up to $7,500 on homeowners who dare advertise their condo for short-term rentals of less than 30 days. The only exception will be if the homeowner is actually present when the guest is there — in other words, those who rent out a single room in their home.

The key document behind this law is a “report” issued by state Attorney General Eric Schneiderman two years ago, in response to growing worries about Airbnb among hotel owners… excuse me, among “concerned citizens.” It reads like a press release from the hotel industry.

Some public policy issues involve genuine, well-intentioned differences. Not this one. The arguments offered in defense of this law hold about as much water as a colander that’s just been used for target practice by the NRA.

We’re only cracking down on “illegal” Airbnb hosts who “violate the law,” say the law’s defenders. Say hello to our old friend Mr. Circular Argument. The state of New York has to ban these rentals because they are illegal. These rentals are illegal because the state of New York has banned them. (Effective immediately: All illegal activities in New York are against the law.)

Oh, say the law’s defenders, but many of these Airbnb operators aren’t individual homeowners, they’re “commercial” businesses with dozens, even a few hundred, condos that they rent out. The response: So what? Are businesses now illegal in New York? Is entrepreneurship a bad thing? Or are you limiting every business in future to one person, one dog, and one pony? (Oh, and if so, have you told all your pals, like the hotel companies or Goldman Sachs? Stupid question, I know)

The law’s supporters say the state has to ban these businesses because some of them don’t meet fire regulations or pay taxes. OK: How about you just regulate them and tax them, like everybody else? (Oh, yes: And if fire traps are really your concern, how come this 30-day limit? Are long-term renters flame-retardant?)

Some of the arguments are hilarious. Airbnb is a threat to “quiet, residential neighborhoods,” the attorney general’s expose argues. The company is flooding these peaceful communities with “out-of-town visitors,” damaging their character and upsetting the locals. And which neighborhoods is he talking about? The main ones, he admits, are … Manhattan’s Lower East Side, Chinatown, Chelsea, Hell’s Kitchen, Greenwich Village and SoHo.

Ah, yes… the sweet, bucolic charm of Hell’s Kitchen. The Lake Woebegone, Where-Everybody-Knows-Your-Name character of SoHo. Thank heavens someone is acting to save them from an influx of strangers — many of them, can you believe it, from out of town.

Oh, and finally comes the argument that we have to “crack down” on Airbnb because it is driving up rents and thereby making housing less affordable.

Sure. That must explain why, according to U.S. government statistics, rents in the New York area are now skyrocketing by an annual rate of… um… 3.9%. Wow.

In the decade from 2000 to 2010, before Airbnb became a factor, the annual average was… 4.3%.

Oopsie.

Will Airbnb raise rents over time — or will it lower them? We don’t know. Sure, some landlords will convert long-term rentals to short-term ones. But others will convert under-used properties into new rental units. Still others will build, or fix up, further properties for rent as well. Ultimately it should make the rental market — both short- and long-term — more efficient.

Meanwhile, are supporters of this law going to take the next logical step, and seize some big New York City hotels under eminent and convert them into long-term rentals as well? The Waldorf-Astoria would make some terrific affordable housing. Stay tuned.

Manhattan is incredibly expensive, for a variety of factors including the economy and Federal Reserve policy. Meanwhile, decades of rent controls and other burdens on landlords have left most of New York City’s housing stock a rundown, underinvested disgrace.

Across America, hotel operators are trying to stop Airbnb just as taxi companies are trying to stop Uber and Lyft.

If only we journalists had thought of this 25 years ago! We could have bribed — excuse me,”lobbied” — legislators to fine you for getting your news and advertising from “illegal” and “unregulated” blogs. Then we wouldn’t have to actually compete.

Airbnb is suing New York to fight the law. Good luck with that. They’d be better off raising cash from their members and using it to, er, “lobby” all the fine, selfless solons up in Albany.

This article originally appeared on Marketwatch.

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