Airbnb faces tough restriction in its most important market
On October 21, Governor Cuomo signed the bill that “carries fines of $1,000 to $7,500 simply for posting an available rental for any term short of 30 days”. This deals a crippling blow to the home-sharing company in its most lucrative market, New York city. The company has been long accused of hurting hotel business and aggravating the city’s affordable housing crisis through luring property owners into short-term apartment rentals for maximum profits.
While the law supporters claim that the new law will enhance affordable housing market, there should be more evidences to confirm Airbnb’s role in stealing affordable residential units from the high-priced housing market. Let dive into what motivates people to rent their entire apartments on Airbnb. Firstly, some people are absence from home for a short time for traveling, working purposes so they can earn extra income by renting their home on Airbnb instead of leaving their apartments unused during that time.
Secondly, it is a common belief that short-term rentals maximize profits for the property owners, which does not always hold true. Although the short-term renting price is certainly higher than the long-term one, there is no guarantee that the renting periods of those two are the same, thus the owner may not receive more money from the short-term rental. The long-term rentals, which are rewarded with steadier flow of income, more security may be favored by most property owners. Hence, what seems to be the affordable residential units taken off from the housing market can turns out to be the ones available only during the time their owners are seeking permanent renters. The statistics from the article “Airbnb ruling proof NYC is unprepared for 21st century business” states that “90 percent of Airbnb posts are for residents’ permanent homes”, so only a small fraction of Airbnb listings is whole-apartment rentals, which shows support for my suggestion.
If most cases happen to fall into the two scenarios mentioned above, the presence of Airbnb is economically efficient and it actually helps middle-income people, who are trying to make ends meet like it claimed. As a result, the signed bill will be more likely to protect the hotel and hospitality industry rather than increase access to affordable housing.
