New York State Lawmakers Approve Ban on Airbnb in Apartments

Published July 10, 2016

New York State lawmakers approved a bill criminalizing the advertisement of short-term housing rentals in apartments and other spaces classified as “multiple [dwellings],” prohibiting taxpayers from using Airbnb and other peer-to-peer economy companies to connect individuals seeking short-term housing with hosts providing places to stay on their property.

In June, Assembly Bill 8074, sponsored by state Assemblywoman Linda Rosenthal (D-Manhattan) was approved by the New York State Senate and sent to the New York State Assembly for consideration. If passed by the Assembly and signed into law by Gov. Andrew Cuomo (D), individuals advertising the availability of unused housing space in their apartments would be fined between $1,000 and $7,500 per incident for violating the rules.

Sharing Economy Benefits Cited

Peter Klein, a professor at Baylor University and senior research fellow at Baylor University’s John F. Baugh Center for Entrepreneurship and Free Enterprise, says consumer happiness and economic innovation go hand in hand.

“Consumers should be delighted that new sharing platforms and apps are challenging the incumbent providers of rides, rooms, temporary work, and more,” Klein said. “For those who use these new products, the benefits are obvious: better service, lower prices, greater reliability and flexibility, and so on.”

Klein says some peer-to-peer economy services—also referred to as “sharing economy” services—directly compete with traditional companies, but Klein says other services only supplement traditional companies instead of supplanting them.

“The sharing economy provides a wide variety of services, [and] some, but not all, compete head-to-head with the conventional providers,” Klein said. “An Uber ride is clearly a substitute for a taxi ride. You can get a regular hotel room through Airbnb but also a variety of less expensive options, such as a shared bedroom, that are simply unavailable from hotels. Airbnb also offers high-end options, options for families or larger groups, and so on.”

Disparate Impacts

Paul Blair, a state affairs manager with Americans for Tax Reform, says the bill unfairly affects low-income households in New York.

“The worst part about this anti-competitive action is that it’s low-income folks who are going to be harmed the most,” Blair said. “Airbnb is a great service for people struggling to make ends meet in one of the most expensive housing markets in the world. This isn’t about community safety or strangers in the area. It’s about killing a disruptive service competing with a well-entrenched hotel industry, regardless of how many families are hurt.” 

Dustin Siggins ([email protected]) writes from Washington, DC.