NY hotels trying to outlaw short-term home sublets (i.e. AirBnB)

http://techdirt.com/articles/20100628/0037599977.shtml

by tjsnyder • 16 years ago

227 80 16 years ago

techdirt.com

samratjp• 16 years ago

Sweet - this can only get more free publicity for AirBnB & similar services.

w1ntermute• 16 years ago

Unless the bill is actually passed, in which case it would have a significant negative impact as well.

jrockway• 16 years ago

Yeah, just like how nobody uses illegal drugs anymore.

pavel_lishin5• 16 years ago

I wonder what the maximum occupancy laws are like. Could you get around this by simply putting down on paper that you're subletting for a month when they're just staying overnight?

graywh• 16 years ago

Or perhaps by having no "early termination" penalty in the one month "contract".

cschep• 16 years ago

could this possibly be abused by them refusing to leave?

I guess if you put in the contract how much it costs per night they'd at least legally owe you in full.

p3ll0n• 16 years ago

Interesting comment on related article by NYT that offers some insight into what type of behavior this bill may be aimed at curbing ...

http://cityroom.blogs.nytimes.com/2010/06/29/bill-could-make...

djb_hackernews• 16 years ago

I've seriously underestimated the popularity of airbnb if people are purpose building structures (undercover no less) for the sole purpose of marketing them as a place to crash on airbnb.

Also amazed that neighborhood groups have "Illegal Hotels Committee"s

starkfist3• 16 years ago

Also amazed that neighborhood groups have "Illegal Hotels Committee"s

NYC is close quarters. It's not necessarily cool to have a different set of partying neighbors every day of the week.

joshwa2• 16 years ago

The illegal hotel problem (esp on the west side of NY) is indeed actually big enough to warrant a committee on the community board-- the west side is home to a lot of SRO's and seedy 'hotels' that cater to folks coming into NYC via the Port Authority bus terminal.

earl• 16 years ago

Well, try living with me. I live in Ashbury Heights in SF. Our next door neighbor runs a possibly illegal short stay hotel. It sucks ass -- this is a quiet residential neighborhood and he rents to either redneck trash that think it's appropriate to open their car windows, blast country music as loud as their stereos will go, and drink cheap beer on the sidewalk at 2 in the morning or to eurotrash who at least have their loud parties in the house, but tend to party much later. I've had to repeatedly call the police, and finally settled the problem, for the most part, by setting my alarm for 4 AM and ringing the doorbell of the owners / using an air horn to wake the owners up. I made him understand that when I don't sleep, his family doesn't sleep, and he finally cracked down on it.

I still have his drunk assholes peeing on our garden once a month.

huhtenberg• 16 years ago

I don't see how the issue of operating unlicensed hotels is specific to shorter-than-a-month sublets.

tjsnyder• 16 years ago

It's not and I'm pretty sure it's already illegal to operate these unlicensed hotels anyways.

fgf5• 16 years ago

This is already illegal, the problems already solved. Distrust of corporate/labour/professional groups that want regulate something out of "safety concerns" etc. is far too low.

natrius4• 16 years ago

I've actually rented a room in the place that comment is complaining about. Small world. I found it on craigslist before AirBnB even existed, so the building wasn't built just for the site. It may have been built for short-term rentals in general, but I doubt it. Toshi was working on the mezzanine level of the apartment while we were there, and there's a shower with a window out to the living room, which isn't particularly conducive to rentals...

It was a way better experience than using a hotel. He actually double booked the room for a couple of the days, so he gave us a different apartment in Manhattan for those days. We ended up getting to experience more neighborhoods on a deeper level than we would have otherwise. You could always split a trip between two normal hotels, but they usually aren't in actual neighborhoods.

Making this illegal is dumb, and it reeks of wholesale purchasing of legislation.

pavel_lishin5• 16 years ago

> It was a way better experience than using a hotel. He actually double booked the room for a couple of the days, so he gave us a different apartment in Manhattan for those days.

How good would the experience be if he didn't have that second apartment?

pavel_lishin5• 16 years ago

Someone threatening your business model? They're not innovators, they're criminals!

dotcoma• 16 years ago

Home cooking is killing the restaurant industry.

fgf5• 16 years ago

If they could, they would ... Stringent health/safety standards actually do this already. There isn't anyone running small cafes from their kitchens in Manhattan, wich is a shame.

dman2• 16 years ago

Yes getting legislation on your side and suing people will completely undo fundamental shifts that are happening in the real world. NOT. Hotel Chains should be the ones at the front coming up with services like airbnb or integrating them. The hotel brand can offer as a front to loosely federated room providers and the hotel steps in by doing quality control and enforcing standards. In fact people in the hotel industry should be overjoyed that this model removes two of the big costs of running hotels - hotel staff and realty costs for the property. All the hotels have to do is to be umbrella brands and get "franchise" service providers.

SoftwareMaven• 16 years ago

The hotel industry has not changed significantly in a thousand years (maybe more). There are few industries I can think of that are more historically defined than the inn with the inn keeper. Aside from the implications of the traditions, it is also a business model that has worked remarkably well for a long time. I doubt they are going to be keen to jump quickly on a major disruption.

dantheman• 16 years ago

Actually, I think Conrad Hilton revolutionized the hotel industry - the creation of business hotels, providing a similar experience around the world, 99 year leases on property etc. His autobiography "Be My Guest" is actually quite good.

sdurkin• 16 years ago

When they start trying to outlaw you, you know you've made a big dent in their bottom line.

moolave• 16 years ago

And this is where the startup needs to partner up with other powerful conglomerates. Like YouTube going to Google after being relentlessly sued by Viacom.

acangiano• 16 years ago

Nothing is as effective as government when it comes to curbing innovation.

ArturSoler• 16 years ago

Good to find something that government is effective at.

wdewind3• 16 years ago

I'm mostly interested that this doesn't touch on the more basic issue:

AirBNB is illegal not only due to short term hotel law, but also due to sublease law in NYC. You CANNOT sublet an apartment for more than it is worth in New York. I've met and heard of more than a few people who rent apartments and use AirBNB as a primary source of (as OP points out, untaxed) income. I'm surprised NYC landlords aren't more up in arms about this.

I don't agree with making it illegal outright, but I actually am kind of in favor of regulating and taxing this better, for the issues the OP talks about as well as the sublease issues.

Edit: After thinking about this a little more I realize the OP goes 90% of the way but doesn't quite cross the finish line with the argument. AirBNB IS the regulatory institution, and is doing a better job than the govt. My sublease point still stands.

starkfist3• 16 years ago

NYC is scam central when it comes to subleasing and renting out rooms. There are tons of people in rent controlled apartments who have no moral qualms about making a buck off of their sublettor or roommate. Another reason AirBNB is interesting because they are making it obvious who these people are and where they live...

wdewind3• 16 years ago

Absolutely. The NYC real estate market is an absolute nightmare in so many ways. Right now it seems most akin to the DeBeers control over the diamond market (ie: an industry based on false scarcity).

GFischer• 16 years ago

The problem is the "rent controlled" part IMO. (and over here we don't have rent control and I pay a huge % of my income for my rent, but I still prefer that to the "rent control" thing)

fr0sty• 16 years ago

If you are charging more than an apartment is WORTH, then no one will pay.

I think you mean it is illegal to sublet for a profit (receiving more from the tenant than you owe to the landlord) which is not the same thing.

thinkzig• 16 years ago

I'm surprised NYC landlords aren't more up in arms about this.

Me too. I run a vacation rental site and many property owners in the VR community are not happy with AirBNB.

It's not because they don't want the competition. They are all used to competing with other properties in their area. It's because they want a level playing field.

Many areas require vacation rentals to be licensed and/or charge a tax on their rental fees. These VR owners don't like competing with AirBNB room owners because the VR owners presume - rightly or wrongly - that the AirBNB room owners are not properly licensed or collecting the appropriate taxes.

I think AirBNB is a great idea and this proposed NY law goes way too far. They shouldn't be legislating innovative ideas like this out of existence. They should be finding ways to equitably welcome the AirBNB model into the existing fold.

joshwa2• 16 years ago

Is the rental contract between the customer and the room provider or between the customer and airbnb?

One way to approach enforcement would to be to set a threshold on the number of units a room provider can offer without being subject to the hotel regulations. AirBnB can easily enforce such restrictions.

_delirium2• 16 years ago

Imo, it'd be a good idea for AirBnB to independently attempt some sort of threshold like that. I think its strongest niche is rooms or couches rented out by actual people who also live at that location. But there are (esp in NYC) a decent number of listings that are basically hostels / unlicensed hotels, and not all are entirely up-front about the fact that you're renting a room from a commercial operation that manages a bunch of rooms in the property, not from an individual who lives there.

The rise of those kinds of operators has definitely made me warier of using AirBnB now, while I used to be able to assume that most listings on the site were legit individuals renting out rooms/couches in their own homes.

_delirium2• 16 years ago

Does that mean these are actually legal currently? I assumed that they were illegal in most jurisdictions, since most municipalities have some sort of regulation on short-term rentals, at least to the extent of requiring registration and an occupancy tax paid, which most AirBnB 'landlords' aren't complying with. But enforcement is difficult / not a priority when it comes to single individuals renting out a room--- enforcement is usually directed more towards, say, someone who owns an entire apartment complex running an unlicensed hotel out of it.

ctrager• 16 years ago

"Chicago poised to license, regulate vacation-apartment rentals": http://www.chicagotribune.com/travel/ct-biz-0629-vacation-re...

m0nastic• 16 years ago

Last week I rented a room for a week through airbnb.com at a place that is basically running a commercial hotel operation (as an aside, the place was great) while apartment hunting in NYC.

While there, my girlfriend dug up a bunch of stories about the neighbors complaining about condo unit owners leasing out units to this place. I can understand both sides of the argument; if I'd just bought a condo in a building I wouldn't be happy about a large majority of the other units being rented out every night to tourists.

I got the distinct impression that there had been a problem with crime and people being disruptive in the buildings recently, although the whole time we were there it was quiet.

Apparently the owner of this hotel has approached a bunch of building owners with vacant condos and offered to lease them. The building owners are very happy (as apparently they are getting more then they would to rent them as apartments).

I will say that I stayed in a giant two bedroom loft in Williamsburg for about half the cost of a "regular hotel"; so it's definitely appealing.

After checking out, I actually got an email from the hotel with the number for New York Speaker's office asking us to call them about bill Bill A10008.

fgf5• 16 years ago

Having a steady stream of noisy neighbours is no different from having one. The solution is the same; hold whoever rents the apartment accountable. (This would be easier if throwing people out was.)

fgf5• 16 years ago

Seriously? If a couple gets drunk and play loud music 4 nights a week thats equal too a couple of tourists doing the same thing. And I would bet that loud tourists are a very small subset of noisy neighbours; in any case the person who rents the apartment can and should be held accountable. It should also be obvious that laws that make it easier for landlords to throw out renters who create problems (and perhaps make them liable if they don't) could effectively solve this problem. There is a difference between brevity and snarkiness.

varjag• 16 years ago

Uh no.

You can have a noisy neighbor, go through a lengthy feud involving building administration and law enforcement, and finally make them reasonably quiet at night. Now, try doing that with the tourists who are in just for a couple of days and don't give a damn.

jeandenis• 16 years ago

Similar initiatives have already be pushed in other cities with vibrant short-term rental markets.

Short term sublets are already outlawed in some neighborhoods of London (e.g. Belgravia, with a potential fine of ~20k pounds). There is also a similar law in Paris since last December, although as a matter of practice it is only enforced after complaints from co-op boards and neighbors who get annoyed at the constant stream of vacation renters. The hotel lobby was behind the law in Paris. Part of the justification was also that owners of short-term rentals, often foreigners themselves, do not declare the rental income on the properties.

callmeed4• 16 years ago

I think is only going to happen more and more across the country. I understand AirBnB is disruptive to some degree, but you have to consider:

- Cities that rely on tourism generate revenue from hotel "bed taxes" which are often higher or in addition to sales tax

- People who are making money on AirBnB by renting out rooms probably aren't paying income tax on it (call it a hunch)

- All the sublease/short-term laws that exist already. For example, in Shell Beach, CA (near where I'm at) you cannot rent a house/room for less than 1 month. People on VRBO are already sketchy about this when you call.

- I still see significant liability issues for both sides. Seriously, what happens if you rent out a room illegally and the guy/gal slips and falls in your shower? What if your dog bites them?

I want AirBnB to do well, but could enough local/state government regulations threaten their growth/existence?

madh• 16 years ago

Many stadiums are funded with municipal funds that come from tourism and hotel taxes.

callmeed4• 16 years ago

Exactly. Here's an example:

http://www.noozhawk.com/local_news/article/042110_bed_tax_up...

Santa Barbara, which is a medium-sized city at best, generates over $11M a year in TOT/Bed taxes.

Do you think they're just going to sit by and let people eat away at that revenue? No way. They're going to have "Richard from accounting" monitor AirBnB and other sites–and start threatening people. Maybe they'll give them an option to remove their listing or register and start paying taxes. Since no one will want to go through health and fire code inspections or worry about taxes, they'll just remove it.

That's all speculation, of course. But enforcement can't be too difficult (at least, not on the RIAA level).

picasso81• 16 years ago

Airbnb didn't invent vacation rentals or sublets. VRBO/Homeaway and Craigslist, the dominant players in the space, have been doing this for years. You bring up good bullet points but if they were real issues, Homeaway probably wouldn't be the $1B company it is today. This is nothing more than hotel lobby groups pushing a bill through their pockets. Occupancy rates are recovering from an all time low (as in lowest in 40 years) and they see cutting off vacation rentals as a strategy for improvement. Mayor Bloomberg even thanks the Hotel lobby groups in his press release http://bit.ly/9iNt3Q. Separately, there seems to be a misconception that Airbnb is hands off with taxes, when in fact hosts who meet the appropriate income standards are issued a 1099 form.

Over time, a city like NY will most likely see a drop in tourism if (a) if the vacation rental industry is removed from the playing field, and (b) hotel prices stay the same (or go back up to 2007 standards). There is a large class of travelers who cannot afford NYC on $300/night rates, and will likely still travel, but choose to spend their money elsewhere.

callmeed4• 16 years ago

First, I wasn't necessarily taking a side–more posing the question "could enough govt pressue hurt AirBnB's business?"

Second, I think the comparison to VRBO/Homeaway only goes so far. Those 2 sites cater primarily to vacation/2nd home owners (i.e. renting out an entire house/condo for week). You don't see many "Rent out my extra bedroom for $60/night" listings on there. Unless I'm mistaken, that's where AirBnB differentiates itself and, IMO, makes it more risky.

makmanalp2• 16 years ago

> - Cities that rely on tourism generate revenue from hotel "bed taxes" which are often higher or in addition to sales tax

Too frickin' bad? I'm of the opinion that taxes should be in compensation for the service provided by the government. What service is being provided here? It makes me angry that just because someone is making money off of something that taxes must sharecrop off of it. As long as the host files their 1099 that came from AirBNB, it seems fine to me. Why is it that a person can stay over and it's no problem but when they pay money it's a huge issue? It makes me think. If this is hurting the hotel business, too bad! Maybe they should look to change their business model instead of trying to pass laws to protect their current one.

callmeed4• 16 years ago

Do people who visit cities/counties for vacation/business trips not require services (indirectly)? Roads, beaches, parks, public restrooms, parking lots, etc. They all have to be maintained.

Come to Pismo Beach (where I'm at) on any Summer weekend. 75%+ of the people on the beach are from out of town. Should I pay higher property taxes to pick up their beer bottles and pay for the extra police officers that need to be on duty?

jcromartie• 16 years ago

It's bills like these (when passed) that make me laugh in the face of people who tell me we have a free market economy.

Mc_Big_G• 16 years ago

Well, now I know my original post wasn't misplaced! http://news.ycombinator.com/item?id=1471654

Prior to reading some of the comments from NYC residents, I was vehemently opposed to this kind of government interference, but now I'm not so sure. It would suck to live next to some of these people.

I wonder if entire building communities could vote on whether to allow this individually so either everyone agrees or disagrees and then has to live with it.

mleonhard• 16 years ago

A similar restriction is in place in Kauai, but the short-term rental industry is somehow still operating.

loewenskind• 16 years ago

I've got an idea. Since the government is probably going to keep on giving existing players legislative help to keep competition out anyway maybe what we should do is pass an "Innovation stiflation act". That is, if you come to the government asking for a law to keep out your competitors then they assign an assessor (the same guy who values my house 40%" above what I could actually get for it) to evaluate how much revenue you're going to get by not having these competitors and we tax that money at, say, 80%.

If we're not going to get the benefit competition would bring at least we should get tax revenue out of it.

maxharris• 16 years ago

That assessor will be bribed.

Instead of advocating an idea that attempts to turn two wrongs into a right (tacking more regulation onto a problem you admit is caused by regulation), advocate for something more fundamental: the complete separation of state and economics.

mhp• 16 years ago

This passed the NY Senate and is now in the Assembly. I wrote to my senator (he co-sponsored the bill and obviously voted for it) and they called me (which was nice). Apparently there is supposed to be an exemption if the owner/renter is present.

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NY hotels trying to outlaw short-term home sublets (i.e. AirBnB)

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