With New York’s recent anti-Airbnb bill, the state has made it clear that it is no friend of the sharing economy. The bill creates civil penalties of up to $7,500 for using a platform to advertise a whole apartment that rents for less than 30 days.
I have argued that this legislation is nothing more than a giveaway to the hotel industry, demonstrating that New York policymakers are joking when they claim that their state is “Open for Business!” Yet Governor Andrew Cuomo’s signing of the bill was celebrated by unions, hotels, and another interest group that opposes Airbnb – some New York City residents.
James Hirsch, a New Yorker who wrote a letter to the editor for the Wall Street Journal this week, worries that “the presence of unauthorized and unsupervised transients in apartment buildings degrades the security and quality of life of legitimate residents.”
Hirsch’s arguments are on more solid ground than the absurd claim that Airbnb is responsible for New York City’s high rents. After all, there is no way that an online platform that did not launch until 2008 can be blamed for the city’s decades-long struggle with high rents. Airbnb has about 41,000 active listings in New York City each night, which come out to just over one percent of the city’s three million housing units. Additionally, 90 percent of Airbnb posts are for residents’ permanent homes. Simply put, it is impossible to argue that taking 0.1 percent of New York City’s residential units off the market by using them exclusively for short-term rentals is what drives rent increases.
Yet, though Hirsch’s concerns are valid, his reasoning is still flawed.
The Nuisance Law
Nuisance laws are well-established in New York City, and they offer a less draconian way to enforce quality of life problems. While there are undoubtedly some disrespectful Airbnb guests, there are also countless rude full-time neighbors. The same enforcement mechanisms that hold residents accountable for actions such as holding late-night parties or playing loud music can easily be applied to short-term rental guests.
Hirsch credits lawmakers with solving a problem for which there is already a solution.Additionally, many apartments and condos prohibit short-term rentals. But enforcement of these limitations should fall to landlords or building management—not the government. If short-term rental guests bother building residents, then these residents can report violations to the individuals who are in charge. But breaking rules in a lease or building agreement is not grounds for a $7,500 fine from the state.
Hirsch concludes by writing, “I have lived for years with an Airbnb guest infestation in my building, and I’m glad that our legislators have finally done something to help stop it.”
Hirsch credits lawmakers with solving a problem for which there is already a solution. If Airbnb guests were causing problems, he could alert authorities using existing nuisance law, similar to how he would respond to full-time residents being loud or disruptive. If Hirsch does not want to live somewhere that allows Airbnb guests, he could find a building that prohibits short-term rentals, and then speak to his landlord or building management if neighbors violate the building’s rules.
In the absence of actual problems, celebrating government involvement in the short-term rental market is a lazy way to limit other New Yorkers’ ability to earn some extra money.
This first appeared at economics21.