Finance Property New York’s crackdown threatens the future of Airbnb

New York’s crackdown threatens the future of Airbnb

New York Airbnb
NYC politicians say homeshare app Airbnb is responsible for soaring rents in the city
Twitter Facebook Reddit Pinterest Email

Home sharing giant Airbnb is engaged for the fight of its life with authorities in America’s biggest city after the signing of a bill that significantly clamps down the company’s accommodation listings.

New York City Council members say Airbnb is responsible for aggravating soaring rents in the city and cutting into its limited housing supply, while the hotel industry has long agitated for a crackdown on its short-stay competitor.

Under the legislation unanimously passed by New York City Council, Airbnb will be forced to hand over the addresses and names of hosts to the city’s Office of Special Enforcement, which has stepped up its raids on short-term rentals.

The relationship broke down in the lead up to the bill when Airbnb published a list of donations from the hotel lobby to council members totalling hundreds of thousands of dollars. Authorities said the company was running a smear campaign.

The new legislation follows similar crackdowns in cities around the world, not only threatening the legitimacy of the billion-dollar company but also a dramatic reduction in the number of the Big Apple’s Airbnb listings.

In San Francisco, a similar law passed by state authorities asking hosts to register wiped out the number of Airbnb listings in the city in January, effectively halving them overnight from 10,000 to 5500.

Japan also cracked down on private lodgings this year, imposing strict conditions for landlords.

Airbnb hosts rally in New York against council regulation
New York Airbnb hosts have been fighting the council on regulation for years.

When asked by The New Daily whether the New York bill would reduce the number of listings in the city and increase the average nightly cost of short-term rentals, Airbnb declined to answer, saying it was too early to speculate. The new legislation won’t come into effect until February 2019.

But The New Daily spoke to several hosts who said they had already decided to close their rentals, claiming the new law placed them at considerable risk of fines and raids by Mayor Bill de Blasio’s Office of Special Enforcement.

The new law signed by Mr de Blasio and which came into effect on Monday requires Airbnb to hand over the name and address of hosts, the address of their listing, the number of days it has been rented and how much money the host made.

City officials said the bill focused primarily on large-scale commercial landlords who were gaming the system, but Josh Meltzer, head of northeast policy for Airbnb, said the legislation was a major privacy concern that left hosts vulnerable.

Hosts with listings in New York other than their primary residence were already operating illegally and had to tiptoe around authorities while risking fines worth thousands of dollars.

In 2010, before most people had heard of Airbnb, New York state authorities passed the Multiple Dwelling Law which made it illegal to for tenants in large apartment buildings to rent out entire homes for less than 30 days. Los Angeles lawmakers are currently considering a similar crack down.

Airbnb has long maintained the majority of hosts are not “bad actors”, the sort who run multiple Airbnb properties for profit,  instead painting them as everyday New Yorkers who rent out their homes to financially support themselves.

“We are disappointed Mayor de Blasio chose to sign this hotel industry-backed bill instead of defending the needs of middle class New Yorkers who rely on sharing their home to get by,” Josh Meltzer said.

“While the mayor himself has said regular New Yorkers should not be the target of enforcement, many responsible homeowners are currently facing aggressive, unchecked policing, and are fearful of what will happen under this new legislation.”

A Wall Street Journal report found raids by city inspectors on short term rentals were up 35 per cent from last year, with hosts issued fines in the thousands for various infringements.

As of May, there were 52,653 active Airbnb listings across New York City. While the city only represents .001 per cent of Airbnb’s total listings, New York is one of the most important tourists destinations in the world and other cities will look to how the New York state government is clamping down on the company.

The central argument from the city is that Airbnb has driven up rental prices in New York. A report in May from the city’s chief financial officer accused Airbnb of being responsible for 9.2 per cent of the increase in housing costs.

“This is about protecting our existing affordable housing stock for the millions of New Yorkers who otherwise would not be able to live in our great city,” Council Member Carlina Rivera, the primary sponsor of the bill, said in a statement.

But in testimony presented to city council, Mr Meltzer said housing affordability in New York was a problem long before Airbnb came into existence.

Speaking at a conference in May, Airbnb co-founder Brian Chesky admitted the company’s relationship with New York City had soured and had been “at a standstill since 2010”.

While the company is tight-lipped on what the new legislation will mean for hosts and tourists, the very future of travel and Airbnb may depend on what happens in New York.

View Comments