Airbnb Lawsuit Pits Poor New Yorkers Against Middle-Class New Yorkers As Hotels Laugh And Count Money
The lawsuit pits poor New Yorkers, and the hotel lobby, against middle-class New Yorkers, and the internet.
(Photo by Carl Court/Getty Images)
The Rent Is Too Damn High. Any discussion about the Airbnb/New York City/Andrew Cuomo cage match has to start there. Airbnb thrives in the New York City market because it’s too expensive for people to stay here. It’s in legal trouble because it’s too expensive to live here.
The New York housing market is highly regulated. In 2010, a law was passed that specifically dealt with short-term rentals, prohibiting people for renting their “whole apartments” for less than 30 days.
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But that law was never enforced. A 2014 report from New York Attorney General Eric Schneiderman reported that 75% of Airbnb listings violated that law. Schneiderman has the amazing ability to report on his own office’s incompetence in a way that blames others for failure.
On Friday, Andrew Cuomo “clarified” the law in a bill that provides fines up to $7,500 for people who list apartments illegally. The key here is that the law now could also apply to people who “advertise” those illegal listings. And that could essentially kill Airbnb in New York City.
So Airbnb filed suit. The lawsuit pits poor New Yorkers, and the hotel lobby, against middle-class New Yorkers, and the internet. The bedfellows here are strange indeed.
You can see why lower-income New Yorkers hate Airbnb. There aren’t enough affordable housing units to go around. Low-income housing groups argue that Airbnb keeps rentals off the market, driving up prices for everybody, as people soak up units and turn them into temporary housing for people who don’t work here.
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Which is why the hotel lobby also hates Airbnb and loves this law. The law was signed last week, and already hoteliers are giddy to jack up prices on tourists. From the Washington Post:
The law, signed by New York’s Governor Andrew Cuomo on Friday, slaps anyone who lists their apartment on a short-term rental site with a fine up to $7,500. It “should be a big boost in the arm for the business,” Mike Barnello, chief executive of the hotel chain LaSalle Hotel Properties, said of the law last Thursday, “certainly in terms of the pricing.”
I don’t actually give a damn if tourists to New York City get a little screwed. If you can afford Hamilton tickets, you can afford to book a room. And a healthy hotel industry does a better job of transferring tourist dollars into the New York workforce than some ponce who buys an “income property” to rent out in Gramercy.
But… renting out their apartments is a way for middle-class New Yorkers to make ends meet because THE RENT IS TOO DAMN HIGH to leave your apartment “fallow” for two weeks. People who have unexpected emergencies or consistent business trips that take them out of town can make up a little ground by Airbnb-ing their places. It’s a source of income for some people. And there is scant evidence that these sub-30-day rentals are actually keeping “affordable” housing off the market.
Not building affordable housing units keeps affordable housing off the market.
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To the extent that New Yorkers are behaving illegally, I go back to Schneiderman. The whole-apartment, short-term rental has been illegal in New York since 2010. Bust these people, if you care so much. Or tailor the law to target the most egregious abusers — people who own multiple units and are clearly using Airbnb to run an unregulated hotel business — and leave alone the guy who is trying to make up two weeks worth of rent while he takes a vacation.
Instead, New York seeks to make Airbnb police its users. In its lawsuit against the state, Airbnb cites First Amendment concerns (content-based restriction on advertisements), and Due Process concerns (making Airbnb liable for advertisements it or its users don’t know are illegal).
The Due Process concerns seem particularly on point. The law says that you can rent out a room in your apartment, as long as you are also staying there at the time. Well, how the hell is Airbnb supposed to know if you are staying in your place or not? I used to rent a duplex on the Upper East Side. How was Airbnb supposed to know if I was sleeping in the nursery while a college kid rented my bed for a week?
Internet companies are generally protected from illegalities committed by their users. Do we really want to upend that? Do we want to upend that because the hotel magnates need to make a little more money?
The Airbnb lawsuit really doesn’t have a lot to do with Airbnb. It’s about people trying to afford living in one of the most expensive housing markets on Earth. It’s about an internet company fighting off death by 50 jurisdictional paper cuts. It’s about a financially insecure New Yorker getting gentrified out of his city looking to stick a pitchfork into something.
But mostly it’s about hotels asserting their prima nocta rights to bone tourists.
New York Governor Signs Bill Authorizing Fines for Airbnb Rentals [Wall Street Journal]
Hotel executive openly celebrates higher prices after anti-Airbnb law passes [Washington Post]
Airbnb sues New York for imposing fines on illegal renters [PBS]
Elie Mystal is an editor of Above the Law and the Legal Editor for More Perfect. He can be reached @ElieNYC on Twitter, or at elie@abovethelaw.com. I don’t use Airbnb because I don’t like strangers in my house/being a stranger in somebody’s house.
