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A Lawsuit By the Attorney General of New York is Threatening to Put an End to the Short-Term Rental of Apartments to Cost-Conscious Tourists

     In its impact on the ability of Americans to travel, no legislation could be more misguided or harmful than the ban against the short-term rental of apartments enacted into law some time ago by the New York State Legislature. 

     The well-meaning lawmakers were seeking to prevent greedy property owners from turning their apartment buildings into illegal hotels.  The legislature sought to prevent these tricksters from sharply reducing the number of apartments available to residents of the city by renting them instead to tourists.  But by passing a total ban on all short-term rentals of less than 30 days' duration, the Legislature has accidentally destroyed the ability of individual apartment owners to occasionally make their apartments available to tourists arriving for a short stay.  Though the Legislature was clearly seeking to prevent the short-term rentals of all the apartments in a particular building (which amounted to turning the building into an unlicensed, unregulated hotel), they prevented the worthwhile effort of individual apartment owners to occasionally rent to a tourist seeking low-cost accommodations or accommodations during a period when hotels are totally sold out. 

     In a city like New York, with the highest hotel room rental rates in America (an average of at least $300 a night per room), the Legislature inadvertantly closed out the availability of less expensive apartments to cost-conscious tourists.  They made New York City into a place which, often, only the affluent can afford. 

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     I know a hard-working young woman who lives in Manhattan, who occasionally rents out her apartment to tourists coming to New York.  She moves out of her apartment for the period of their stay, and earns some extra income, which she badly needs.  The tourists, in turn, enjoy the pleasures of a spacious apartment in an attractive New York neighborhood for much less than they would pay at a hotel.  In no way does the building containing this apartment become an "illegal hotel."

     Rentals of the sort I have described are the stock-in-trade of a travel success story known as AirBnB.com.  AirBnB rents apartments throughout the U.S. and abroad to tourists looking for an inexpensive accommodation.  Often, those apartments are the only accommodations available to tourists during periods when a convention or sports event causes all of the hotels in a particular city to be completely full.  AirBnB has thus brought much additional tourist spending to those cities; a city's income is greatly increased by additional tourism.

     The Attorney General of New York has now issued a subpoena to AirBnB, demanding the latter's record of rentals.  In addition to resisting that subpoena, AirBnB has successfully argued in one particular court that one challenged rental took place while the apartment owner remained in residence (in other words, the rental was for a spare bedroom and not the entire apartment).  Since the law specifically exempts that kind of rental from the ban, one particular New York court has dismissed a public lawsuit against an AirBnB client.  But since AirBnB has probably and perhaps inadvertantly placed rentals with some of the entrepreneurs renting whole apartment houses, the outcome of the Attorney General's campaign is very much up in the air.

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      The law definitely needs revision; it needs the insertion of a provision permitting individual owners of apartments to rent their digs to tourists on occasion.  Otherwise, tourism to New York will be gravely injured, and only the hotel industry will benefit.  They--the hotels--are already doing quite well in a city with 100% occupancy of hotels during long periods of the year, and they do not need the assistance of lawsuits brought against individual owners ot apartments who occasionally rent to tourists.       

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