In a thick and detailed report given considerable publicity last month, the Attorney-General of New York State has declared war on the popular website service that seeks to obtain low-cost apartments for touristic visitors to big cities. And though his threat to prosecute Airbnb and its partners is limited, obviously, to New York State, his threats could eventually induce other states and cities to do the same thing.
Airbnb.com, according to Attorney-General Eric T. Schneiderman, reduces the stock of low-cost housing by turning residential apartments into "illegal hotels", thus depriving would-be permanent residents of the chance to occupy them on a permanent basis. The people who are allegedly hurt by this are the low-income residents looking for an inexpensive place in which to live.
Here's the background. The law of New York State prohibits the rental of apartments for less than 30 days. This, allegedly, prevents the operation of illegal hotels through the short-term rental of apartments. But there's an exception to the ban: if the owner of the apartment remains in residence during the renter's stay, then the apartment can be rented for short-durations, like five or six nights. In other words, Airbnb can rent a spare bedroom in a larger apartment for short stays, without breaking the law, if the owner of the apartment uses another bedroom for his or her own uses.
Despite this loophole, it remains true that a large percentage of all Airbnb rentals in New York are of whole apartments, thus supporting the Attorney General's view. And a large number of such rentals are offered continuously, throughout the year, removing the apartments from the housing stock for permanent residents. It's undeniable that his arguments are weighty ones. But what's the counter-argument?
A large percentage of the rentals supplied by Airbnb.com are from normal residents looking for occasional income to make ends meet, and renting their apartments on occasion only. They either rent them during periods when they go on vacation themselves, and thus derive income from an asset that otherwise would have remained empty, or else they move out for several days and stay with a friend, renting their apartment in order to earn additional income to themselves, which they badly need.
I happen to know of several young people of low income who rent out their apartments on occasion for several occasional days, in order to bring in such extra income. To suggest that by doing so, they are reducing the number of apartments available to permanent residents, is ludicrous.
And equally important, by occasionally making these apartments available to transient visitors to New York, they are performing a vital function by permitting the city and state to enjoy extra income from tourism. In the world of tourism, popular cities like New York, San Francisco and Washington, D.C., are currently facing a major crisis. The amount of their hotel space is so limited that they are literally unable on occasion to accommodate additional visitors, and when they do, they do so for outlandish prices.
New York City presently receives nearly 55 million visitors a year, bringing hotel occupancy rates up to 85% on a yearly basis. When rooms are available --which is seldom--they rent for $300 and even $400 a night, discouraging many visitors from coming. If New York is to enjoy increased income from tourism, it must be able to accommodate additional tourists, and services like Airbnb supply the only additional lodgings. Such arguments are just as persuasive as those the hotel industry brings to bear against Airbnb.
It is obvious that this is a matter for compromise. And it is hoped that the Attorney General will be wise enough not to prosecute well-meaning individuals who rent their apartments on an occasional basis. It is important that he confine his efforts to the large scale operators who are continuously offering all the apartments in a particular building to transient visitors.
Photo credit: Andrew Bain/Flickr
