This article was featured yesterday in the Wall Street Journal. Apparently, a new state law will target Airbnb advertisers with fines of up to $7,500 if they violate a 2010 law that bars rentals under 30 days in multiunit New York City buildings when the owner or tenant isn’t home.
Curious to hear other BPer's opinions on this, especially those in the NYC Airbnb business.
Yeah laws here are pretty strict. It's unfortunate for those that want to get into vacation rentals. Good for the hotels still.
Is there a perception that this will help decrease the rents/increase the supply of units in the area? Or do people still think it'll be hard to track this issue and enforce it?
@Andrew Wong , I think the issue in regards to perception is that it could change the quality of living and makeup of the neighborhood. And Airbnb could also increase rents and push out current permanent tenants for short term residents and tourists.
Maybe the issue won't be enforced or maybe Airbnb (after having been recently funded significantly by Google, and being no stranger to lawsuits themselves) could overturn the decision.
There is actually a real issue that is not just perception.
Please see my previous post (Sorry, don't know how to link my previous post from a different forum).
Originally posted by @Llewelyn Adal:
I am a NYC Landlord (6 buildings, over 20+ apts) and expanding.
In NYC, AirBnB actually started in the Bed-Stuy neighborhood in Brooklyn, where I have 2 properties I owned since 2014. It started well before that.
Interestingly, Bed-Stuy used to be a very high crime, poor neighborhood. It's still like that in several pockets but the Gentrification of Bed-Stuy has improved it considerably.
It's obvious that when a neighborhood improves which also improves the amenities in that neighborhood such as higher quality foods at a higher price, restaurants and cafes, etc., the overall economics improves.
The cheaper stores like Family Dollar, cheaper supermarkets and Corner Delis begin to disappear. Lower priced restaurants like McDonalds, KFC, etc. get replaced with more upscale Sushi, French and higher priced Artisanal Gourmet restaurants.
It also causes Crime to decrease, which also adds increasing demand to live in the neighborhood.
This is a great boon to Owners of the Housing stock as the changing landscape increases the value of their rentals and causes sky high appreciation. In 2 years since owning my Bed-Stuy building, it has increased in value by approximately 50% or more.
However, for those that have lived in the neighborhood as Renters, particularly non-Rent Stabilized apts, for a long time and have not improved their personal economics to the same degree of the neighborhood, this really presents a problem.
They basically get completely priced out of the market.
Even for those that hold on to their rent protected apartments, and there are a LOT of those kinds of apartments, their rents are much lower than the current Market Value, BUT they find themselves with very few options for lower priced necessities like Food and Pharmaceuticals.
For the non-Rent protected Apts, having the option of AirBnB, allows the Renter to be able to stay in their apt, even if they couldn't afford it because generally, you can make as much money for the entire month's rent in probably a week or two.
For the savvy Renter, he starts to look at his apartment not as a place to settle down and call home, but as a place where he can improve his economics. And why not? We all want to improve our economics.
HOWEVER, this then presents a problem. Landlords noticed that for certain apartments, especially those with multiple bedrooms (ie. not Studios), have become in HIGH demand. The savvy Renter can now make a lot of money from those extra bedrooms.
Furthermore, some Landlords then see that it may be more lucrative to just do AirBnB rentals and forget about renting to locals. The Landlord could make more money and not have to worry about doing an eviction, especially in a very Tenant Friendly place like NYC.
The phenomenon is really a self-feeding upward swing. Tourists comes into the neighborhood, spending more money in the neighborhood, driving the need for more upscale amenities, driving up the desirability and ultimately, driving up Apartment Rental prices.
The Rent Protected Renter who had lived in the neighborhood whose personal economics had not kept pace with the skyrocketing upward swing of the Economics of the neighborhood..... well, he's out in the cold, only thankful that his shelter is protected, but angry at the issues that left him in such a circumstance.
It's a movement that I don't think anyone in the circumstances of the Rent Protected Renter can easily fix. It's also a very big problem for local Renters who must rent non-Rent Protected Apts which are disappearing because of the phenomenon.
Those that own or become AirBnB entrepreneurs have no incentive to fix this problem.
However, because there are a LARGE amount of Rent Protected Renters and Market Renters, they can only fight back by using their Voting power. Thus, the push back against AirBnB.
Of course, this is my personal observation.
Also, I want to state that I have not nor intend to use any of my apartments for AirBnB until this fight is over and I know exactly what I can do an cannot do. It's a big mess right now to know what's legal or not.
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