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NY official: Airbnb stay illegal; host fined $2,400 (cnet.com)
202 points by swallsy on May 21, 2013 | hide | past | web | favorite | 265 comments



I've had this argument with several people. Their position is that "it's my house/apartment, I should be able to do what I want with it" (even when renting they use this argument).

My argument is that this is not and has never been true. You can't, for example, run a tannery in your apartment.

What's more, as a resident (and especially if I were an owner) I wouldn't want my building being a de facto hotel. An endless stream of people coming and going, having building keys and so on.

I don't believe this ruling is anything new. I believe short stay (<30 days) like this was always illegal in NYC.

A friend of a friend lives in a building where the super was soldering a pipe and managed to burn the entire building to the ground (gutted the inside that is).

Imagine the scenario if an AirBnBer does this with say a cigarette?

Or what if someone is assaulted by such a person?

Residency laws exist for a reason. Honestly, AirBnB just seems like a massive liability time bomb waiting to go off.


The term that's involved in this is "externality": costs that are imposed on people not involved in the actual transaction (use of the place for payment).

http://en.wikipedia.org/wiki/Externality

You rightly point out, that, for instance, in a crowded apartment building, having something like a dynamite storage facility would probably be a bad idea.

However, other things might be annoying too, such as having children or pets or noisy sex, so you have to 1) get an idea of the actual costs involved, and not just "well, this could happen", and 2) see if there's a framework where people could regulate/resolve their differences on a more local level. Perhaps in some buildings, people would be ok with some AirBnB traffic if they get a small cut of it. The idea being that the more global the solution, the more likely it's going to be inefficient.


At some point, the cost of adjusting for the externalities will erase the savings of AirBnB. Which would indicate that the much of the "benefit" of AirBnB simply comes from not paying for the externalities.

Beyond the neighbors, there would also need to be city taxes to pay for the regulation and oversight of the rental (and fire inspections, etc), and the use of city services by visitors (who probably don't pay income taxes in that city.) Basically, "hotel tax", which in some places is 20% or more and right now you don't pay when using AirBnB.

Not to mention additional liability insurance, as you can bet that the level of risk incurred by someone doing short-term rentals is much higher than a normal homeowner -- so they shouldn't be in the same risk pool.


I recently stayed for a few days in an AirBnB room while my wife and I were in New York. A comparably nice hotel room in the same neighborhood would have run us a minimum of $350 a night; the AirBnB room was $110. While I certainly believe that some of the "benefit" of AirBnB comes from not paying for externalities, it stretches logic to believe that those externalities account for $240 a day for two people in one room.


Isn't that less the externalities than the pool of folks using the existing hotel infrastructure (bending supply/demand) rather than exploring AirBnb/couch surfing/etc. I imagine if business travelers and tourists used AirBnB en masse, the prices would more closely approach that of traditional hotels... But with hosts that're less dependable.


There's a clearing price for hotel rooms in NYC based on the built number of hotel rooms. If everyone viewed airbnb and hotels as fundamentally interchangeable then the range of prices for airbnb units would be similar to the range of prices for hotel rooms at that time - but this would be lower than the current range of prices for hotel rooms, as the supply of available rooms will have increased.

Having said that, I think the airbnb market in NYC is reasonably close to clearing with the hotel market. Probably some listings for very nice apartments and also some for relatively mediocre apartments are underpriced, but the truth is that a night in a decent airbnb apartment is in general commensurate with the cost of a hotel room in the same neighborhood.

The catch, of course, is that there are many airbnb listings in places without hotel rooms at all - Harlem, the far Upper East Side, etc - and in those areas the airbnb prices appear low but of course we don't know the appropriate hotel room clearing price.

But to your basic point, I agree there's probably some discount right now for the general sense that airbnb is "weird" or "idiosyncratic" to the average traveller.


I’m sure there’s a large component of what you say to it, but that suggests that grandparent’s comment:

> the cost of adjusting for the externalities will erase the savings of AirBnB

is false, which is more or less exactly what I’m trying to get at too: it is not unreasonable to expect that AirBnB will continue to be cheaper than hotels even if externalities are priced in.

As for hosts being less dependable, I’m sure that happens, but the few times I’ve used AirBnB, I’ve been quite pleased. By contrast, it seems like more than half the time I check into a hotel, something is amiss or the room isn’t ready by the time it was promised, or ... something. There are exceptional hotels with great customer service, but most hotels are borderline terrible in my experience.


That assumes that the hotel room and the AirBnB room were comparable in terms of amenities and services, which they probably weren't. (Room service? Daily cleaning? Gym? Doormen/porters?) You can get a pretty nice hotel in NY for $350 a night -- the W hotel downtown has rooms for $359 this weekend.

I'm not saying there aren't great deals out there on AirBnB; right now it's a market of people basically selling unused inventory at very low prices. I'm saying that if they had to incur more normal requirements (safety, taxes, insurance), the pricing would rise and the inventory would decline. If that same AirBnB room cost $250, it might not as interesting to you.


Some of the benefit is certainly from skirting regulations, but I can see some big benefits to accessing a much wider range of options, too, so there might well be a place for AirBnB even if it were taxed/regulated a bit more, rather than simply banned.


That's fine, but it's unproven that the AirBnB market works at all if renters have to pay 20%+ hotel taxes and apartment owners have to pay income tax. It would both raise the effective rates and greatly decrease the received benefit to the seller -- there might not be a clearing market any more. I'd consider renting my spare room for $100 a night, but not for $40.


I'm pretty sure that the hosts still have to pay income tax, if they are getting paid money for having someone stay in their house.


They're supposed to. How many do you think actually are?


Probably about the same percent as individuals who rent out their apartment long-term?


I doubt it. Landlords have to count rent as aggregate gross income on their tax returns, and it's probably both fairly easy to get caught and fairly serious if you do get caught.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Em...

(If you're just subletting, only any net gain is taxable, which is probably minor.)


Yeah, AirBnB basically seems to be an exercise in converting externalities into profit.


Much of what we consider to be profitable, high-growth business is about taking advantage of market failures. E.g. the advertising industry that bankrolls the internet is basically about taking advantage of cognitive biases to get people to make irrational purchasing decisions. Part of the success of e-commerce is due to the heroic efforts of UPS, etc, in reducing the cost of shipping over the years to make e-tailing cheaper than brick and mortar retailing, but a big part is also arbitraging on state sales tax laws.

This is not a moral judgment (I'm too old to make moral judgments). Fact is that purely competitive markets suck because there is no money in them (there's no high growth startups in the dairy industry, even with extensive government subsidies to offset the effects of vicious competition). A good fraction of the opportunities to make money are based on things like arbitraging regulations or exploiting market failures. Much of the rest involves focusing on markets with little competition (either because it's new or because others don't have the skills to target them), but I think people underestimate how much activity is in the former bucket. E.g. with AirBnB: are they in business because nobody thought to do what they're doing before, or because people thought about it before but realized it was illegal?


"Taking advantage of the difficulty of contract and regulatory enforcement" finds an equilibrium at some really sour places.


http://www.businessinsider.com/the-success-story-of-chobani-...

But maybe that is the exception that proves the rule. Or maybe you didn't mean dairy products.


Chobani is unusual in that it brought a different product to the market that was objectively better. There are other new players in the dairy industry, but a lot of that action is applying lifestyle marketing to food products (e.g. getting people to pay more for trendy food when they could get the same food for much less without the lifestyle brand). Think about stuff like flavored water--a product that couldn't get more fungible that exists because marketing makes it seem non-fungible.


Looking at my comment, the last bit looks sarcastic. I actually meant that I thought you might be thinking more of milk production and less about processed diary.

Anyway, I'm not sure 5 of them would really weaken the point you were making.


Converting externalities into profit isn't necessarily taking advantage of market failures. It may just be _creating_ market failure and taking advantage of them.

Let's say all of the restaurants in your neighborhood have to charge extra because of the cost of commercial garbage service. And you start selling food cheaper, because you're putting your garbage into the household trash and passing on the savings. Yes, that's a business, but it's basically just breaking the rules and passing some of the savings on to customers.


Agree. it has been argued that the whole financial industry is indirectly subsidized by the government for being too big to fail.

Elon states that many forbes list billionaires receive huge amounts of profit from the subsidies (oil, agriculture)


Yes, finance is heavily subsidized, but so are many other major industries. The tech industry is also heavily subsidized, by design, and is indeed one of the original recipients of such subsidies. Many of the land-grant universities founded in the 1800's were specifically designed to train engineers to go into what was the high-tech industries of the time. Crossing the line from providing people a general education to specifically training people with the skills relevant to a particular industry and thereby reducing that industry's training costs is a form of subsidy, one that continues to this day.


That might be true if your worldview started and ended at the edge of NYC. For the rest of us, AirBnB is used across the country in suburbs and less populous cities.

If you have a two family house and "air out" the second apartment, how exactly is that converting externalities into profit?

I'm not sure a densely populated city should really make any objections to externalities.


There are still a lot of externalities that people are cutting corners on, even in the suburbs: proper insurance (by not declaring that you're acting as a hotel), tax (by not declaring airbnb income on your income tax), safety regulations (fire extinguishers, smoke alarms, floor plans etc).

Not that all these laws make sense for airbnb, but by not respecting them you're "unfairly" undercutting hotels.


That would only apply to specific airbnb stays which cause negative externalities like discomfort to other apartment residents. Do you really think that this is a measurable problem?

I don't. I think that hotels are just pissed because airbnb provides a fairly thin layer of technology that allows property owners and renters to use their property more efficiently (by having it occupied more often) and therefore threatens the very core of their business.

It's the same story with taxi drivers opposing ridesharing services. Does anyone really think that taxi drivers are mad because they're worried that these new services will provide a less safe or comfortable experience to passengers, which is supposedly the point of taxi regulations? Nope. I think they're mad because ridesharing services allow more efficient use of automobiles and therefore threaten the very core of the taxi industry. Any bets on what taxi drivers will think about Google's automated cars when they start offering shuttles for hire?

If we want to talk about externalities, we should at least recognize the possibility (and, I dare say, the near certainty) that many government regulations themselves have considerable negative externalities.


Pointing out the existence of externalities is not sufficient. You need to show why government (loosely defined here as an organization with a well-accepted legal monopoly on the use of violence to resolve conflicts) will lead to fewer negative externalities than other means of conflict resolution.


> You can't, for example, run a tannery in your apartment.

I would prefer that you could, in the (perhaps unlikely) scenario that it was allowed by the terms of your rental agreement. If it's your own property, go right ahead.

> What's more, as a resident (and especially if I were an owner) I wouldn't want my building being a de facto hotel.

Many residents would probably agree, and if enough agree, then there's no reason why the property owner couldn't prohibit the practice in the rental agreements. I live in San Francisco, where airbnb is legal (as far as I know), yet my property owner explicitly prohibits "short term subleasing," effectively banning airbnb rentals. No law or government action required, no criminals made, no taxpayer-funded enforcement, and no problem.


You cannot be serious. Just because you happen to own the property does not give you absolute rights. What you are arguing against is called zoning and the legality of that is very well settled.

The tannery example is pretty apt here - what right do you have to run a foul smelling eyesore right beside the property where I'm attempting to raise a family?


That should really depend on the contracts and negotiations between property owners, tenants, etc. Maybe you don't mind living next to that "eyesore" because it's much cheaper and you can afford private schooling for your children. Everything is a cost/benefit, and people may be willing to sacrifice one thing for another, so have a little empathy.


I think you missed the point of "externality": the people affected by the externality are not party to the negotiations.

In other words, when I buy the house next to yours, and from one day to the next, decide to use it to store decaying pig shit in the yard, or manufacture high explosives, all of a sudden, you got something really nasty that you did not choose. It's not as if you chose to move next door knowing full well what goes on in my business. All of a sudden, the value of your house has dropped, and you haven't been compensated for it at all.

I agree that zoning and restrictions should be regulated at a local level so that multiple solutions can arise, but it seems like trying to involve neighbors in contract negotiations becomes quite complicated quickly. The guy 2 houses down has seen his house fall in value too, although maybe not quite so much. The guy 20 houses away might still smell things on a bad day, so he's affected a little bit too, should he be included in negotiations as well?


I agree with what you're saying for the most part. I think, though, that people want to get along and social pressure can work for a lot of these situations. Regulations do not always work in your favor, though, and do not always protect people.

For example, where I live in Cleveland, there used to be a rule that policeman (and I think most civil servants) had to live inside the city limits to work there. Once they removed the regulation, these workers sold their homes and left. The property value has dropped considerably as a result.


> what right do you have to run a foul smelling eyesore right beside the property where I'm attempting to raise a family?

He has every right to do this. Why do you assume that your family is more important than his tannery?

The regulations against things like tannery in an apartment are only there so that you can, when e.g. choosing a place to raise your family, find a place that will suit your requirements. It's like labels on food. You want something without sugar? You go and find something labeled "sugar-free". Regulations are there only to help you choose what you want. You don't look at a sugar drink and then ask "what rights does a food company have to put sugar in my drink when I'm trying to stay on keto?".


You could argue that this question has been discussed before, and that that is the reason why there are laws against noxious businesses in populated areas. If you want to operate that tannery of yours you had better have a good case and make it.

If it's just your right against theirs, that is the short path to "direct action", and you cannot have that in a civilized society.

You could also argue that you have the right to operate that tannery of yours but choose not to exercise it out of consideration of the people who will suffer from the stench. That would be the aristocratic viewpoint, argued eloquently by Ernst Jünger in the "Ledge at Masirah".

Either way, there is such a thing of society, and anyone arguing cleanly has to take that into account.


That's why we have zoning, so tanners can go tan hides and residential areas remain for residing.

It's like y'all are trying to reinvent practices long derived from observation and common sense. If you don't like a property's zoning, then don't buy it or go through the process to change the zoning.


As HarryHirsch says, no he absolutely does not have that right. Zoning is far from a new invention, it's been around since the industrial revolution at least.

I'm honestly shocked that people apparently would want to live in the kind of an environment where at any second the property next door could be turned into a tannery. How could anyone have confidence in their property's value in a society where that was allowed?


There is more than one to solve social problems. Centralized, violent, compulsory action (government) is one way, but there are others. Opposing "the government solution" is not the same thing as denying the problem or refusing to fix it.


How are zoning regulations "violent"?


It's a standard libertarian meme. Resist the government long enough and eventually - eventually might take years - someone wearing a gun will come and arrest you. Since they're arresting you with superior arms to the point of perhaps pointing them at you, this means doing so is violent, hence everything the government ever does is 'backed by violence', hence everything they ever do to limit you in any way is 'violen', no matter how minor that limitation might be. It's one of the more tortuous aspects of libertarian rhetoric.


This is one of those ideas that became a meme because it is unquestionably true. Ideas which are true tend to spread quickly. And, regarding this specific example, it's ludicrous to claim that it might take years if you violate zoning regulations. It would be more like hours.


Ideas which are true tend to spread quickly.

Nonsense. History is full of true ideas getting pounded flat. Sensationalist journalism is more effective than true journalism. So on and so forth. If "true ideas spread quickly", then religion would be dead in the water, all around the world.

And seriously, hours between doing some tanning and getting arrested for violation of zoning laws!? Zoning law violation rarely ends up in arrests in the first place - you get fined, then if you don't pay your fines, down the track they'll start the process.


> History is full of true ideas getting pounded flat.

That is not the logical complement of what I said. I only said that true ideas tend to spread quickly, which is obviously true. True ideas which were pounded flat are not counterexamples, because I'm talking about tendency.


It is a counterexample, because clearly untrue ideas also spread quickly, and history shows that untrue ideas stick far more easily - pursuing reason requires a lot of effort.


That's still not a logical complement of what I said. I didn't say that only true ideas tend to spread quickly, or that they tend to spread more quickly than untrue ideas.


Really? The whole point of saying the statement at all is that 'true' ideas have this feature than other ideas don't have as much of. Now you say that non-true ideas spread just as quickly, the statement is utterly pointless.

If the 'trueness' of the idea is irrelevant to how quickly it spreads, as you've just said here, then your statement becomes "Ideas tend to spread quickly, regardless of their truth", which is pointless given the context.


Read closely. All I said is that the particular idea in question spread quickly because it is true and because true ideas tend to spread quickly. It is completely irrelevant if non-true ideas also spread quickly. What I said still holds.


> This is one of those ideas that became a meme because it is unquestionably true

It sounds more like a rhetorical truism than a "true idea". Of course the police enforce the laws, that's what they're there for.


> It sounds more like a rhetorical truism

And yet, people frequently dismiss it as a "libertarian meme." One doesn't have to look far on the Internet to find someone that will deny that government enforcement of things like taxation or zoning regulations do not constitute violence.


What I meant by truism is that it may be a logically consistent position given the initial assumptions, but it brings no additional knowledge. If you accept the government=violence condition, then ANY law, rule or regulation is upheld by violence.

When you don't pay alimony: violence. When you jaywalk: violence. When you litter: violence. When you wear shorts instead of trunks at the swimming pool: violence...

OK, great, we've established that there is violence everywhere. But what has that brought us? Nothing.


Really, it depends on whether you're using the English definition of 'violence' or the libertarian definition of the word.


I'm just using the definition that seems to be the first one listed in many English dictionaries.

"Violence is the intentional use of physical force or power, threatened or actual, against a person, or against a group or community, that either results in or has a high likelihood of resulting in injury, death, psychological harm, maldevelopment or deprivation." http://en.wikipedia.org/wiki/Violence?redirect=no

"Physical force exerted for the purpose of violating, damaging, or abusing" http://www.answers.com/topic/violence

"exertion of physical force so as to injure or abuse" http://www.merriam-webster.com/dictionary/violence


Your last two definitions don't fit unless you've a priori decided any government action is abuse - which is the wrong way to define things. Your first definition is so belaboured and tortuous that it sounds like libertarians have been at it.

And it's interesting to note that none of your definitions allow for natural phenomenon to be violent, yet we quite naturally talk about things like violent storms in English.


How are they not violent? What would happen if you really did set up a loud assembly in a Manhattan apartment?


> What you are arguing against is called zoning and the legality of that is very well settled.

Indeed. I am seriously arguing against zoning, or rather, against the necessity and wisdom of government (i.e. violent, compulsory) action to solve this problem.


The alternative would be a society not based on the law, but on connections and reputation - real-life examples would be a Brazilian favela, Wikipedia, the Iceland of the Sagas. Not something I'd prefer.


That is not the alternative. Depending on your definition of "law," it doesn't necessarily imply government. In fact, a lot of functioning "law" today is non-governmental (one reason for this is the unsurprisingly high cost and inefficiency of the government's conflict mediation system). But moreover, even regardless of your definition of "law," it's naive to assume that the way government works isn't "based on connections and reputation" in just as bad of a way as you expect a government-less society might be.


(I am sorry: I accidentally down-voted you on my iPhone when I meant to up vote you. I leave this explicit note to make certain you know you should have two more points on this comment than you do.)


Every lease I've seen of my group of friends prohibits subletting without express permission of the landlord/owner. It's already the standard in NYC. Realistically, every AirBNB within a rental unit in NYC is likely violating the terms of their lease.


It might say that but is that an actual enforceable provision?


Yes, absolutely. My family has evicted tenants from some of our units for repeatedly violating this clause of their leases.


It seems in NYC at least, the landlord can't refuse to let someone sublet so long as they are properly notified and the sublet is reasonable. The way most leases are written though, it makes it sound as if the landlord has the final say vs it defaulting to permitted (with notification) unless the landlord makes a good case why it should be denied.


> I live in San Francisco, where airbnb is legal (as far as I know)

Its generally not (its illegal in San Francisco to rent a unit for less than thirty days in a residential building with more than four units.) New York and San Francisco are the two US locations that I've seen the most news coverage for AirBnB's legal issues in.

> yet my property owner explicitly prohibits "short term subleasing," effectively banning airbnb rentals. No law or government action required, no criminals made, no taxpayer-funded enforcement, and no problem.

All contracts, and especially lease agreements where the ultimate enforcement action is eviction, depend very much on law, government action, and taxpayer-funded enforcement action.


So because there is dependence on some monopolistic entity for contract disputes (there really shouldn't be), then that gives justification for that entity to intrude on voluntary actions? Seems like a logical fallacy to me. How about we let people transact peacefully and deal with the problems on a case-by-case basis instead of lumping everyone under the same law that allows no room for exploration.


> So because there is dependence on some monopolistic entity for contract disputes (there really shouldn't be)

Its definitional: if you aren't seeking the threat of state enforcement to enforce a set of mutual promises, you don't have a contract, you have a mutual set of promises that lacks the intent necessary to form a contract.

> then that gives justification for that entity to intrude on voluntary actions?

Yes, using the threat of action by other people to get what you want gives those other people a right to a voice in what you can use that threat to support.

> Seems like a logical fallacy to me.

Subjective appearance can say as much about the one seeing as the thing being seen.

> How about we let people transact peacefully and deal with the problems on a case-by-case basis instead of lumping everyone under the same law that allows no room for exploration.

Enforcement of existing laws, civil and criminal, is done on a case-by-case basis by actual people; even if something creates a civil or criminal cause of action, the party (the prosecutorial authority of the state, in criminal cases) with the cause of action may choose not exercise it, and jury nullification is thing, so, largely, what you call for is the status quo.

If you think the specific parameters of the existing law are drawn incorrectly, you probably ought to address your specific problem rather than calling for abstract features that already exist in the current system.


> Its definitional: if you aren't seeking the threat of state enforcement to enforce a set of mutual promises, you don't have a contract, you have a mutual set of promises that lacks the intent necessary to form a contract.

That is one definition, but not the only. And I'm sure there are creative ways to enforce contracts without State force--third-party arbitration could be an option, social pressure, etc. Most contract disputes I've been involved with have been resolved without the need for legal action. There are plenty of social dynamics that come into play.

> Enforcement of existing laws, civil and criminal, is done on a case-by-case basis by actual people; even if something creates a civil or criminal cause of action, the party (the prosecutorial authority of the state, in criminal cases) with the cause of action may choose not exercise it, and jury nullification is thing, so, largely, what you call for is the status quo.

This is true, but I don't think it's working. Looking at the current prison population, something is deeply flawed. Are most jurors even aware of jury nullification?

> If you think the specific parameters of the existing law are drawn incorrectly, you probably ought to address your specific problem rather than calling for abstract features that already exist in the current system.

Fair enough.


I'll add: third-party arbitration is already quite common, and in many cases is very deliberately used to avoid the government alternative. The definition proposed by that commenter indicates to me that he or she is simply unaware of the existence and commonness of arbitration.


Anywhere outside Hackernews, mandatory arbitration is considered a way to prevent trial by jury. It's safe to say that "trial by jury" got written into the constitution is because the drafters had experience with arbitration and were aware that at times it can be seriously unfair and inequitable to one of the parties.


What do you think a representational government is except the exertion of social pressure backed by force?


One key difference is that the representational government's monopoly is backed by force.


By monopolistic entity, do you mean society? If you don't want to live by the rules of the society you are in, you are free to withdraw yourself and find somewhere else without such onerous restrictions. Likely you'll find it much worse place to live.


I don't mean society. I mean a very small portion of society called "government."


> If it's your own property, go right ahead.

Yep, this is the problem with services like AirBnB and Uber. It's embraces a purely selfish attitude in individuals with blatant disregard for the rest of the community.


How does Uber harm the community?


The problem with Uber isn't necessarily, that it harms the community, but that it unfairly competes with the taxi monopoly. Now, your first reaction might be to say "well that's the taxi monopoly's problem" but there is more to it. The taxi monopoly is a bargain struck between municipalities and service providers. The bargain is that taxi cabs get monopoly protection in return for their agreeing to function as an extension of the public transit system. As part of the bargain, taxi companies agree to do things that they wouldn't do in a free market--agree to drop people off anywhere in the city, agree to serve poor neighborhoods, etc. If the municipalities allow Uber to operate without those constraints, they are going back on their end of the bargain.

Maybe the right answer is to end the bargain entirely--buy out the medallions and end the monopoly protection, and let everyone compete on a level playing field. But allowing Uber to ignore taxi regulations while still imposing them on the cab companies is not fair.


> The taxi monopoly is a bargain struck between municipalities and service providers.

Indeed. It's an agreement of which Uber and its customers are not members.


Seriously. Just the other night I had an Uber ride from a guy, he had previously spent years working as a single taxi operator. Within the past year on Uber, he's been able to expand out on his own, and now owns 6 additional cars which he leases to other Uber drivers. He's also training all of them on how to do the same thing, and one of them is soon going to likely strike out on his own with 2 cars to start. These are small, independent business people, who would not have these opportunities otherwise.


Uber is different in that (in my mind) they do NOT break the law, nor entice others to do so. The law around taxi based operations is on 'hailing fares' - Which involves a taxi driving and seeing you with your hand sticking out and picks you up. Uber cannot do that, its not a taxi. Its a on demand, car pickup service with licensed drivers.

Now, on the other hand- I think that lyft would be a better comparison to airbnb. I believe they let users without a taxi license do the same thing as uber.


It doesn't. Some people just don't like people making money peacefully without the government's permission.


"go right ahead" Yeah! My neighbours can go fuck themselves! Always complaining about my 3am parties and my friends from the Silencers Are a Crime Motorbike Club. It's my turn to be selfish!


Oh, its more serious than that.

(IANAL) Using a dwelling for short term rental may be a violation of the covenants upon the deed and may allow someone previously holding title to the land to reclaim it - this is why Home Owner Associations are obligated to enforce the regulations of deed restricted communities and what allows them to impose sanctions against violators.

I once was involved with a waterfront parcel deeded to the city for a park in the 1920's. It was never developed as such and an adjacent property owner - a trauma surgeon - offered to purchase it. I became involved nine years on after the surgeon had tracked down and obtained a quit-claim from all the surviving heirs of the previous owners. That was in 2002 as part of the city's approval of the sale.


Agree. AirBnB is the ultimate John Galt system in NYC. Apartment renters get cash for their apartment (that they usually don't even own) and then everyone else in the building gets to deals with the fallout of a revolving set of neighbors who share the lobby, amenities, hallways, and walls. Good riddance.


When you forced to pay $300/night in Manhattan at the W hotel, Atlas Shrugged.

Not a AR fan btw, just saying both sides of the fence have their pros and cons. I'd place higher value on an apartment complex that explicitly did not allow short-term renting within their contract.

The other problem is... what's the difference between me using AirBNB and me knowing a friend who let me stayed at his place for 6 days and I just happened to give him some money as a thank you gift?


> When you forced to pay $300/night in Manhattan at the W hotel, Atlas Shrugged.

No one is "forcing" you to spend $300/night in Manhattan for a hotel. You should read that book again because you are also not using "Atlas Shrugged" in a meaningful context.

> Not a AR fan btw, just saying both sides of the fence have their pros and cons. I'd place higher value on an apartment complex that explicitly did not allow short-term renting within their contract.

Laws and regulations around housing are put in place to protect all residents, the landlord, the community, regardless of what Joe the landlord remembered or didn't remember to put into his stock lease.

> The other problem is... what's the difference between me using AirBNB and me knowing a friend who let me stayed at his place for 6 days and I just happened to give him some money as a thank you gift?

And what's the difference between cooking for friends who give you money for groceries and opening a restaurant in your apartment? You can always make an argument that appeals to the extreme in making your case, but thankfully that doesn't make it a legally relevant argument.


> what's the difference between me using AirBNB and me knowing a friend who let me stayed at his place for 6 days and I just happened to give him some money as a thank you gift?

Its the difference between an informal, non-contracted exchange of gifts between parties known to each other with an established relationship on the one hand, and a contractual, arms-length agreement between strangers through a third-party intermediary with arms-length contractual relationships with both parties on the other.

As a general rule, in most domains, the latter tends to be subject to greater regulation than the former, both because, as an arms-length agreement, there is greater need for protection from abuse and, as a contractual agreement, it necessarily invokes the threat of state action.


> No one is "forcing" you to spend $300/night in Manhattan for a hotel. You should read that book again because you are also not using "Atlas Shrugged" in a meaningful context.

Good luck finding a hotel for cheaper than $200 at least in Manhattan :) And you're right, you're not forced, you're more than welcome to sleep on the public streets.

> Laws and regulations around housing are put in place to protect all residents, the landlord, the community,

To a certain extent this is true, but this does not take away the fact that me selling my house for a few days that I'm gone to someone else should be illegal. You're also assuming that I want to throw out EVERY SINGLE LAW OMGBBQ. Talk about being "extreme." Good gosh Charlie Brown.

> regardless of what Joe the landlord remembered or didn't remember to put into his stock lease.

There's this magical thing called lawyers. They're pretty cool once you get to know them, even the "sharks." Without them, writing contracts would be to hard for my small brain :(

> And what's the difference between cooking for friends who give you money for groceries and opening a restaurant in your apartment? You can always make an argument that appeals to the extreme in making your case, but thankfully that doesn't make it a legally relevant argument.

I'm actually a big advocator of people starting up restaurants in small capacity places (remember, we can be a vegan restaurant with absolutely no use of a stove, only an oven which means a safe, contained, and controlled environment) such as homes and/or "food trucks".

And you were right about the AS comment, good call :) (like I said not an AR fan I was under the presumption that it had to do something with business owners leaving due to all of these rules and leaving the "big guys" to look after everyone).


The only difference that matters between friendly exchanges (cooking and room/board) and AirBnB or underground restaurants is that one set of actions threaten the existing power brokers who have the ear of City Hall. No one blinks when you disrupt file sharing or social networking, but disrupt automotive, taxis, or hotels (for example) and you're in a world of legal hurt. I fully understand that these zoning laws that AirBNB is running afoul of have existed for some time, but, as others pointed out, there are plenty of private, non-coercive ways to solve this same problem. They were codified into law because some powerful incumbent business sought to benefit financially from it.

The other differences between these different transactions, while perfectly valid distinctions, are simply ex post rationalizations made by those who support the entity in power (in this case city hall).


> The only difference that matters between friendly exchanges (cooking and room/board) and AirBnB or underground restaurants is that one set of actions threaten the existing power brokers who have the ear of City Hall.

I think it's a shame that most people are too cynical to understand why laws and regulations around food, housing, transportation, etc. exist. Odd in particular that you think preventing underground restaurants has anything to do with protecting the power brokers when there's a big public health case to be made for ensuring that food is prepared in a sanitary environment. I'm guessing you're in favor of a solution that let's people get sick/die and then let the free market enact it's revenge on the restaurant. Good thing we decided to leave that model out with the 20th century.


More ex post reasoning. And it's not being a cynic that makes me believe this -- it's an honest look at the empirical evidence.

There is really vibrant underground restaurant industry in Seattle. I don't think people are getting sick/dying in massive numbers. Also, I would favor a solution where a restaurant is held legally (and perhaps criminally) liable if they make a diner sick or die. As it stands now, they can hide behind the health code.

I think it's a shame that most people are too cynical to understand that there are solutions to problems that don't require the use of force.


I can't agree more with you, and in the mean time I feel really bad because AirBnB is a blessing in this world.

There's no real efficient way to enforce such a law though, I don't really know for the US but we have many craig-list style websites in France where you can find a place to rent for a week (and avoid AirBnB's fee). AirBnB just made everything simpler, and safe (rating people, profiles, etc...)

One more thing. AirBnB is especially relevent in big cities like New York, Hong Kong, ... where hotels are super expensive and rent as well.


> What's more, as a resident (and especially if I were an owner) I wouldn't want my building being a de facto hotel. An endless stream of people coming and going, having building keys and so on.

I can understand your desire to have things this way, but as an individual, I see no reason why you would want to force this rule on everyone in your city. If you don't want your neighbors renting their place out, go live in an apartment complex that doesn't allow tenants to do this. If you don't want your tenants doing this, then make it against the terms of your rental agreement.

What business licensing really does is foster a kind of local monopoly, often as a favor to the existing businesses. It's anti-competitive, by making it very difficult to start a business. Most people are completely unaware of these very real motives behind local licensing laws.


> If you don't want your tenants doing this, then make it against the terms of your rental agreement.

It's actually a violation of most standard residential rental agreements; sub-tenancy is often tightly controlled and only permitted with the express permission of the landlord.

Source: my family owns apartment buildings in several different cities.


It probably is against the rental agreements for most of the people doing it.


In my opinion, this should be left to the owners of the specific building and not a city wide restriction. I own a property in Florida and the HOA restricts rentals less than a month. It isn't necessary for the municipality to get involved.


The tannery thing is a bad example because its not a inherently illegal activity.

Renting out units under 30 days is plain and simple illegal as the laws are written.

With that, a much better example would be running a brothel. It is as cut and dry illegal as this is. Both have city laws saying "This is not allowed". The city certainly has more priority in enforcing one over the other mind you.

You can argue all day airbnbing your unit should not be illegal, but it currently is. Lots of people argue prostitution should be legal though as well, so best of luck.


One of the main problems I have with it is that in New York, I know of people who are doing a taking account AirBnb rates when calculating a break even for their sublets/extra rooms. This will push rents up in the city and ultimately not help a lot of the actual residents.


>>Imagine the scenario if an AirBnBer does this with say a cigarette?

How is the situation different if you have a friend stay over night? What if they house sit for you a couple of days?

The only difference above is they are not paying you, but how does that affect liability?


Your home insurance will cover damage caused by friends staying over. They won't cover damage caused by customers of your (undeclared) business.


> I believe short stay (<30 days) like this was always illegal in NYC.

If by "always illegal" you mean "since two years ago": http://skift.com/2013/01/07/airbnbs-growing-pains-mirrored-i...


Separate from that law, literally every New York lease I've ever seen has included terms forbidding the rental behavior that AirBNB promotes, and I'd be surprised if the bylaws of every co-op didn't include house rules forbidding this type of activity. Some condos may be more-flexible in their laws - but there's always been a pretty-strong legal framework in-place forbidding re-renting an apartment in this manner.


if someone owns the property, they should be able to rent their house or condo. Illegal sounds like city is trying to protect other businesses such as established hotels. Define, the rules, so that people can follow them.


Your argument is completely shallow and void of reason..

> You can't, for example, run a tannery in your apartment

Why not? Whats your argument?

>What's more, as a resident (and especially if I were an owner) I wouldn't want my building being a de facto hotel.

If I owned a building then I set the rules/laws. This is about property rights, not about what you think is right or wrong. If I want to turn my home into a transient hotel then I should have the right to do so. Existing residents should abide by my rules under the current terms of their lease.

>Imagine the scenario if an AirBnBer does this with say a cigarette?

And what if an existing resident did that? Whats your point?

You completely leave out any actual reasoning to support your statements. A very shallow argument.


>> You can't, for example, run a tannery in your apartment > Why not?

Because tanning hides requires strong acid and a bunch of other chemicals and it will stink up the building and probably break some kind of regulation for residential spaces. If you happen to be a tanner and you disagree with it, pretend he said "Nuclear reactor" or "shooting range".


>If I owned a building then I set the rules/laws.

He is talking about when you own an apartment, not the whole building.

And even when you own a building you still don't get to "set the rules/laws". There are tons of laws about what you can, and what you cannot do with and in your building. And in some areas, like e.g. Santa Fe IIRC, there can even be rules about what your building should look like.

Given those, starting your response with "your argument is completely shallow and void of reason.." is certainly ironic.


It was less an argument than a statement of fact. These are the laws.

If you want to argue what fundamental rights should or shouldn't be afforded to a property owner, HN probably isn't the place. This stuff has a long and complicated political history, which I humbly encourage you to learn more about.


Laws which are not set in stone. The point is that services like Airbnb can be the impetus for changing the law to make more sense for modern times. When these laws were created, something like Airbnb was impossible, so how can you think they took the concept into account when crafting them?


I think the tannery comment was a statement of fact: there are laws against using residential spaces for business purposes. If you own a building, you set the rules, but not the laws. Again, this is not a moral statement, but a recognition of how things work.


> > You can't, for example, run a tannery in your apartment

> Why not? Whats your argument?

Because it smells bad: http://en.wikipedia.org/wiki/Tanning#History


Owning a building and an apartment are different things. If you own an apartment or condo, you are bound by the home owner's association rules, which can be pretty limiting.


Even if you own a building, you are still subject to zoning laws and other regulations like the fire code.


Ugh. libertarian alert.


Few things that should be pointed out here:

1) First off, most uses in the city have always been against the rules -- it's been a known issue.

2) from TFA: "this law is only actionable as a secondary offense. For example, if the police show up after a noise complaint and then find you renting out your place, only then are you in extra trouble." So it's not going to stop most hosts in their tracks.

3) AFAIK, there is still a small subset of AirBNB rentals that are within the rules -- if you have a 2+ bedroom unit and live there as your primary residence, you are allowed to rent out your second+ bedrooms.

Happy (and eager) to be corrected on any of the above if I have the wrong understanding.


Also worth mentioning that it's probably never been safe for renters to let out their places on Airbnb, as boilerplate leases universally restrict subtenants to those approved by the landlord.


I looked into adding Airbnb-friendly language to my lease for my rental property, but I am not a lawyer and any lawyer I could hire to work on the language would probably be breaking new ground.

I had a friendly chat last year with someone at Airbnb about them possibly taking the reigns on this, but I don't think anything ever came of it.

It might go a long way towards getting friendlier relations between landlords and Airbnb.


Why would a landlord (at least in a low-vacancy area like NY or SF) ever accept such an amendment to the lease?


They could do it in exchange for charging an even higher rent?


Or maybe a share of the payment, and a more direct relationship with the security deposit.

I was really trying to think of ways it affects me as a landlord and property owner. I really don't care what people do in the property as long as it's legal and causes no damage, but I want to be protected and considered as well.

Right now we are just completely cut out of the entire process, and there's little incentive for us to NOT take a hostile stance.


Responding to w1ntermute below: You're right, and that's what I had toyed with looking into. The problem is I use a boilerplate lease like most landlords - because it's been tested for years in "production" if you will.

You take a great risk in making even small modifications to existing language without a lawyer review. Writing all new language is even riskier and considerably more expensive.

Since I don't want to spend this money, my default position is I will simply reserve the right to crack down on any Airbnb activities I become aware of.

Airbnb could use their own lawyers to help out with this conundrum and gift the resulting work product to landlords.


> Airbnb could use their own lawyers to help out with this conundrum and gift the resulting work product to landlords.

That sounds like an excellent idea. You should suggest it to Airbnb (seriously). They have already shown themselves willing to provide legal assistance to users, so they may very well be open to this as well.


Offer the renter a split in lawyer fees?


No, create an Airbnb-friendly lease boilerplate.


I was under the impression that the reason you hadn't done this already was lawyer fees.

So... find a tenant also interested and split the lawyer fees?


Is your insurance company (I assume you carry liability of some type) going to go for that?


How exactly are you "cut out of the entire process"? It's your job to create a leasing agreement that maximizes your ROI. If you want to make money off Airbnb, then add a clause in your leases saying you get a cut of the profits.


In San francisco at least, no contract language can bypass rent control provisions. With that, you better hope you are in a non rent-controlled building


More specifically, it's been illegal since 2011: http://skift.com/2013/01/07/airbnbs-growing-pains-mirrored-i...


#3 is incorrect. Short term stays (below 30 days) where you charge rent is taxed, controlled and legalized by the city you live in regardless if you have a extra room or if you live with the guest or not.


Wouldn't it be smart of airbnb to not allow people in cities known that their services are illegal not to allow people to post those apartments ?


No because 1) There are probably still some people in those cities that can legitimately rent and 2) that would lower revenues. As it stands they can turn a blind eye and put the liability on the homeowner/renter.


Is it secondary if I call and report that you are illegally renting out your dwelling?


I can't say that I'm at all surprised. Moreover, I would expect to see more judges, as well as legislatures, pass such rules. I've discovered (full-disclosure: through consulting work with a site similar to AirBNB) that many vested interests -- typically hotels and real-estate organizations -- don't want such sites to operate. Until and unless the legislators are convinced to change the rules by a popular, grass-roots demand to allow it, things won't change so fast.

And you know what? I'm not sure if they should.

My family has used VRBO ("vacation rental by owner") to rent apartments in Paris, Amsterdam, and Budapest over the last three summers. We loved the experience, and would never even consider going to a hotel in the future, for all of the reasons you can imagine -- we save money, cook our own meals, and feel at "home" in a foreign city. It's a marvelous feeling.

But that marvelous feeling is probably less-than-marvelous for a city's permanent residents. When we stayed in Paris, we were told that short-term rentals there are illegal partly because housing is in short supply, and is thus astronomically expensive. Forbidding short-term rentals, in theory, can increase the pool for annual rentals, thus bringing the cost down. (We were also told that rental law was 100 years old, but was only now going to be enforced. Amusingly, we were also told that the French justice minister lived in our building...)

Plus, I don't know if I would want an apartment in my building to be occupied by new people each week. We have enough trouble with the neighbors we know.

Bottom line, AirBNB is a brilliant idea, and many people clearly love it. But I don't think that they, or we, can expect laws to change immediately to accommodate this new idea. And when the laws do change, we can probably expect them to still impose some restrictions, or even taxes, on the homeowners.


There are so many problems with housing in Paris that I feel that short term rentals are only a small percentage of a percentage of a contributing factor. Even if short term rentals were forbidden it still wouldn't put a dent in the costs.

I do agree with you on the constantly new people problem. I recently found out that the reason the front door to my building is broken is because one of our neighbors is a prostitute and the johns were letting themselves in and buzzing random doors to get the second door unlocked. Since we aren't a hotel the burden of safety and security has been placed on her neighbors.


> Forbidding short-term rentals, in theory, can increase the pool for annual rentals, thus bringing the cost down.

That's completely contrary to how supply and demand would work--if you forbid short-term rentals you move all the short-term demand into the annual market, increasing annual demand, which drives up prices and causes more scarcity.

Since short-term housing can house multiple people each year and annual housing can house only one per year, each new annual housing unit added will be accompanied by multiple new demanders that were previously in the short-term market and could have been all housed in one year by that apartment as a short-term rental. You increase annual supply by one and increase annual demand by more than one--likely by more than half a dozen--and so prices skyrocket as demand outstrips supply and the shortage is exacerbated.

Of course, city governments are not exactly the gold standard of understanding economics when passing housing laws.


Illegal hotels are actually a legit problem in NYC. I'd have to dig up the article but I've read about shady landlords evicting residents and turning entire apartment buildings into Airbnb hotels. Its big business, my friend pays his entire rent with Airbnb.

Real estate is at an extreme premium and hotel space is scarce. There are a lot of scammers and shady people in this city so its only natural that Airbnb will be abused (I've even been sucked into an Airbnb-based con job in NYC myself).

I think the issue isn't so much that this law is on the books, its that they haven't updated the legislation to accomodate people who rent on Airbnb safely.


>I'd have to dig up the article but I've read about shady landlords evicting residents and turning entire apartment buildings into Airbnb hotels.

Why shouldn't landlords have the right to turn their buildings into Airbnbn hotels? (Assuming that the landlord pays taxes as usual, and the evicted residents were evicted under the rental agreement).


The fire codes and taxes for a hotel are much more onerous than for a residential apartment building. Presumably landlords who are doing illegal conversions are flouting both, plus also violating zoning rules by converting a residential building into something else. (I believe NY zoning has specific "hotel districts".)


I think it has a lot to do with residential rental inventory as well. Rent control. There is such limited available apartment rental inventory that to take units off the market, carve them up and sell them as hotel stays completely skews the real estate market and drives up the rent. If every landlord did that no one would have a place to live


I kind of find myself being more sympathetic to landlords in this case. Yes, if everyone did that there wouldn't be any space to live, but looking for short-term subleasers is also a lot more risky. They need to be found, first of all - you're competing with every other of their residence choices - and after that, they have a greater risk of damaging your property. But if after this pro/con analysis, it is economically better for you to do short-term leasing - I think you should be able to.

Also hotel safety laws do not exist in a vacuum. AirBnb renters should be properly informed that the building they are entering has passed building inspection codes, but cannot guarantee hotel-level hygiene and fire code safety. Once fully informed, if the renter still chooses AirBnb, it's their call. People can sleep over at their friends' houses, or at strangers' houses without exchange of money anyway - the fact that money does change hands doesn't change the facts about the parties involved.


Disclosure only works when the customer has a real ability to assess the risk they're accepting. Most folks aren't even aware of the fire codes for hotels versus residences, or why they exist. (In particular, the extra danger in fleeing a fire in an unfamiliar building.) Once you have money changing hands, it's a business, and isn't comparable to having houseguests over for the night - the motives are profit-based.


I assume that hotels have to comply to additional regulations (safety, hygiene, etc) and taxes. In this context, an AirBnB hotel would be a de facto hotels, without all the legal constraints. So this is not fair, to your competitors.


So it is OK for people to live there (health-wise) but not OK for people to stay there temporarily? I mean, if there are 200 people in a building and it burns down does it really matter if they were there temporarily or permanently? Bizarre.

The only way justification I could see is that if it were not hygienic, there is a chance of a outbreak of a virus happening (but that is no different than the metro or a flea market).


> * if there are 200 people in a building and it burns down does it really matter if they were there temporarily or permanently?*

It absolutely matters, and your scenario is a very serious one. Permanent residents know where the fire exits are, and which hallways are dead-ends. Temporary residents may not even be aware which windows open onto a fire escape.


Given that deaths by fire in NYC were in a record low in 2012, when AirBNB rentals in NYC were presumably at a record high, maybe the lack of fire regulations aren't actually that big a risk.

http://www.nytimes.com/2013/01/03/nyregion/58-fire-deaths-in...


Also, zoning laws.


Have you ever lived near a hotel? My building in Chicago was in the same complex as a hotel. It was a very nice hotel (Doubletree), but there was a steady stream of college students on spring break, prostitutes soliciting business travelers, etc.


Do you have more info on the con job? It'd be good to know some things to look out for when using AirBnB.


Its a really long story, but I wasn't the renter, I was scammed by someone who rented on Airbnb and pretended it was their apartment


Care to share how someone tried to con you? I'd really like to know what to avoid, myself.


I'm conceptually in favor of airbnb and its peers. However, in NYC there's definitely an odd dynamic right now - renters are the main proponents of the service, because they can turn around and re-rent their apartments and recoup some of their housing costs (I know some people who are turning a net profit), but I'm pretty sure this is short-sighted. NYC is underserved by hotel rooms (maybe for zoning reasons?), so hotel space trades at a premium to residential space. If apartments become eligible to earn income as "hotel rooms", it's landlords, not renters, that will ultimately benefit - the rental market will reset at a higher rate and we'll all be forced to rent out our apartments when we're not around to make up the difference. I see this already in the form of friends renting larger apartments or paying higher rents because they expect to benefit from airbnb income; that behavior has to be driving up rents. Half my building (literally) is for rent on airbnb, as well as a third of the building next door.

This may be 'net beneficial' economically but I'm pretty sure most of the benefit will ultimately accrue to property owners, not renters.

And of course, although owners may come down hard for liability reasons if they find out about airbnb operations in their buildings, they have every incentive to turn a blind eye: if they can plausibly claim they didn't know and blame the tenant, surely their liability is at least somewhat reduced and in the meanwhile they benefit from rising rental income.


So Business Insider is summarizing a post from Fast Company, which itself is summarizing a post from CNet, which did actual reporting and has the text of the decision. I wish OPs would take the time to actually figure this out before submitting links. You want good journalism? Then support it by promoting the original work, not the get-rick-quick aggregation.

http://news.cnet.com/8301-1023_3-57585377-93/ny-official-air...


How many stories on Tumblr have their been the past few days? Never mind the articles on Jobs and Swartz when they passed. Take something and repurpose it for our own benefit .. hey, isn't that the basis of AirBnB's business model? :-)


The reason this is a issue (in san francisco, at least) is that long term, elderly and protected tenants are getting evicted from buildings with whats called a 'ellis act'.

A ellis act lets you kick everyone out of your building with the restriction that you cannot 're-rent' it for 5 years.

Since a 30 day stay is not 'renting' per sf code, unscrupulous landlords have been using BnB sites to profiteer evictions.

That is one of many reasons why its against almost all city/state codes to do this.

I thought about this before- AirBnB and VRBO themselves are not actually committing the 'crime' however they are certainly with knowledge of the use that is happening. As such, I am sure any landlord wronged by either site would have a absolutely fantastic case for tortuous interference to them (AirBnB interfered with the contract between a landlord and tenant)

I think it basically comes down to this. Certain things are illegal, like it or not. Lots of people think prostituion should be legal country wide, like nevada. But its not. Setting up a site to let you sell something that it knows is going to be illegal is riding a extremely fine line.

It reminds me of a old trick used in a terms of service for a filesharing website back in the day. "You agree that by continuing, you have received a written, expressed waiver from warner, nbc, fox, [etc...] to download their content "

The service knows that absolutely nobody has such a warning/waiver but by shifting the blame to the user, they think to be untouchable.

I am not a lawyer though, so what do I know.


Yes, but why should anyone who has lived in an apartment for 1 year be entitled to pay that price for life? Why should a resident who has lived in my building for 5 years be entitled to pay 40% of what I do for as long as they care to stay? The current opposite extreme is just as bad.


I think we shall see more and more of this, airbnb, kickstarter and many other "social clearing houses" are essentially delivering services that investment regulation and consumer protection legislation has been developed explictly to prevent

Its not that this specific NYC law exists and been upheld, its that there is a whole class of such laws across the West. People will bump into these a lot more.


That doesn't mean those laws shouldn't be challenged. Often they were put in place under different circumstances.


It also doesn't mean that the laws should be repealed. In the context of things like AirBnB and Kickstarter, people tend to only see the "good side" because the laws prevent the large-scale "bad side" from taking root. E.g. they see someone putting their apartment on AirBnB while they're on vacation, but not the shady dude turning an entire building on a quiet residential block into an AirBnB hotel for rowdy college students. They see someone funding a video game on Kickstarter, but not the people swindling the public on a large scale.

It's interesting to note that people jump on Goldman for selling shitty financial products too retirement funds and the like, but don't see the potential for abuse with something like crowdfunding. If Goldman can make a killing swindling sophisticated institutional investors, don't you think it'd be child's play for someone to do it to unsophisticated members of the public?

These sorts of laws have the incidental effect of suppressing potentially useful transactions on an individual level, but the point of them is to prevent people from making a business out of abusing the system. E.g. I have noted before that the real point of copyright protections isn't to keep an individual from copying a Windows CD for a friend (probably not going to do a lot of economic damage to Microsoft), but to keep a major Chinese OEM from shipping computers with copied Windows licenses (might do a lot more economic damage). These regulations are similar in that regard. By making them illegal, you keep people from building a large-scale business out of cheating others.


Could you please clarify which of those circumstances do not apply today?

Especially the basic one that most housing space is intended for residency which, by its nature, is less lucrative then short-term renting?

Quite on the contrary, in this case I think that the circumstances here are even pointing towards more regulation and AirBNB is accellerating that.


The measures were put in place to prevent building owners from turning their apartment complexes into unregulated hotels to avoid paying additional taxes. Because those hotels were unregulated anyway, they often were in a lax state, and so health and safety also became an issue.

Conversely, per Airbnb's quote, 87% of the rooms listed on the site are people's own homes of which they rent out a portion, or the whole thing for a limited time they rent out. So these are not people trying to circumvent the tax law (and by all means tax their Airbnb income as a hotel would be), they are just trying to make additional income to live in one of the most expensive cities in the world. Those 87% were not the target of the law, because this model did not exist at the time.


Well for one, Uber has had all kinds of problems being allowed to run taxies for hire in NY, and one of the complaints has been that they don't have a city certified taxi-meter installed.

That regulation might have made sense before GPS enabled smartphones -- especially when said GPS enabled smartphones are the only way to hail an Uber car.

I don't know the reason for banning unlicened hotels, but I imagine that at least one of the examples used were the safety of the cusomers -- that is kinda pointless given that the customer can check out the reviews on AirBNB before he decides to engage in business.


We're talking housing, not cars here.

The reason for banning unlicensed hotels is to ensure that there is enough space for actual rent.


This may be true, but in many cases, they're also providing a replacement for the regulation. Having a reputation system, holding payments in escrow and such make it harder to get away with fraud or providing low-quality services.

It's not absolute, of course, but neither is regulation. No matter what, a few people will do bad things, and a smaller number will get away with it.

It seems like relaxing the laws about these things to see if new models provide better solutions to the old problems might be a good idea.


It technically always was illegal.

To be honest, I think there's a huge risk in the airbnb business; hitch-hiking was not only popular but normal for students and young people for decades in the US. Then a couple of people were raped and murdered and fear spread.

It's awful, but I think there's a significant risk for this exact scenario crushing airbnb. Not that it would be common or even likely, but all it would take was once, and the people could even know eachother. The media would pick it up and sensationalize it and the business would go down.


It already was illegal. Discussion: https://news.ycombinator.com/item?id=5742925


I want to know how that discussion already fell off the front page? did it get flagged off the front page? It has a lot of discussion and a decent number of upvotes.


HN detects flame wars and devalues those posts in an attempt to facilitate better discussion.

Source: http://techcrunch.com/2013/05/18/the-evolution-of-hacker-new...


The stupid thing about that is that, because AirBnB is a YC company, all my conspiracy theory bells went off immediately. I hadn't thought about the flame war detection thing at all.


I love AirBNB for finding a place to stay. Here are thoughts on how I might feel in other roles:

* landlord: I'd have an issue with a high volume of non-tenants coming in and out of my building without permission.

* hotel operator: I'd rather the supply of hotel rooms be limited. The fewer rooms, the more demand for my rooms!

* insurance company: guest of AirBNB guest does something bad and the cost of dealing with it is high. What a mess.

* mayor: publicly I'm against it because hotels fund my election campaigns. Privately, I stay in AirBNB rooms while in vacation because civil service doesn't pay much (albeit it wouldn't surprise to find mayors are rarely broke)

* neighbor: there's too much noise coming from that place down the hall. They are rude and have no vested interest in being nice because they don't live here.

AirBNB is a fabulous service to use and I understand why it has opponents.


This ruling only applies to the 5 boroughs of New York City, not the entire state.


This is actually an annoying thing about NYC. In NYC, when people say "New York," they actually mean "New York City's five boroughs." When people say "upstate" or "upstate New York," they mean the rest of the state of New York minus NYC. When people say "the city," they mean "Manhattan." The title only makes sense to residents of NYC.


When people in NYC say "upstate," they actually mean anything north of the Bronx. They don't really think of the fact that NYC is the southern-most part of the state, and it keeps going to Canada.

I lived in Mount Vernon one summer, and I was confused when people in the city (see, I just did it) said I "lived upstate."


Actually, I am a resident of Rochester and I understood the title intuitively. Rochester is far (6 hours+) from The City. I was from Buffalo before that, even farther away. I am used to hearing about odd laws that only apply in NYC (the boroughs), from special conditions on a learners' permit license, to bans on 16+oz fountain drinks, when I hear "now illegal in New York" I tend to think naturally, it must apply only in New York City.

We are actually second-class citizens, the legislature of NY is only for NYC (and the benefits of all the taxes we pay, union dues, etc, at least to hear my father tell it.)


I wouldn't go as far as second-class citizens, NYC is less than half the population and, correspondingly, less than half of the districts. There are a lot of NYC-specific taxes and tolls collected. Hell, Republicans controlled the state legislature until a year ago or so (and you know they weren't from NYC).

If I had to guess (I used to be in politics), your dad spends a lot of time complaining about property taxes -- I can guarantee those don't leave your municipality.


I am pretty sure he's more interested in payroll taxes, unemployment insurance, welfare dollars, Obamacare. I won't pretend I've read the ledgers, but when he texted me yesterday to say '49 states left', I hadn't heard about the devastation in Oklahoma and I started scanning the internet tubes to find the news that Texas finally seceeded over Obamacare.


Well, those are federal issues, so it sounds like his problem is the fact that Obama's president rather than anything to do with new york state. I'd also hypothesize that he was much less upset about these issues in December 2008 than he became starting in late January 2009.


http://taxfoundation.org/article/2012-state-business-tax-cli...

There's NY, ranked right behind NJ as #49 for second least favorable state business tax climate. That's right. Worse than California for business owners. I have no idea of the legitimacy of this graph, it only took 10 seconds of Googling to find it.

Not saying anything about Upstate vs The City, but my dad has lived in NY for near to his whole life, he's actually from Long Island, and (what do you say next? we have Jewish friends?)

It's easy to say they're federal issues, but NY has reasonably high sales tax and income tax, and yes there is property tax. If you're from New York, you wouldn't argue that we're not highly taxed. I happen to be near enough to the poverty line, recent college graduate, high student loan debt, good payment record, so I only know what they want me to see insofar as taxes go. I fill out TurboTax and usually get most of it back.

I've actually received larger income tax returns than what I paid in total, once or twice, with no plausible explanation other than "Dad paid for it," so you'll have to understand, I am influenced / biased also based on that.


Yes, conservative think tanks will always put NYC/Cali as the least favorable business climate. But where's the business? Here. Cali.

I live in NJ, I work in NY, so I got 49 and 50 going strong here. I can tell you, and you'll have to just trust me on this, business is better here than in Alabama or Arkansas which have much better 'business climates'.

You received higher tax returns than what you paid because of the earned income tax credit, a socialist wealth redistribution scheme to benefit low-income workers that would never pass if today's political conservatives had to vote on it. Your dad and I both helped pay for it.


Well, thanks for the spirited discussion, and .. erm, for paying the bill, too!


Actually NYC pays for itself, and upsate sucks money from Long Island and Westchester, whether you account by where you live or where you work:

(This is by where you live) $Paid $Recd Pop Capital Region 3.8% 7.0% 4.2% New York City 45.1% 40.0% 42.9% Downstate Suburbs 27.4% 17.7% 21.7% Rest of State 23.8% 35.2% 31.2%


Downvotes, if I had them...

Use two spaces before each line for pre-formatted text. Label your axes. Provide a reference for the source of your table.

I have no idea if this is sales tax, income tax, or capital gains tax.


Plus they drink all your water.


As a resident of Upstate New York, I can vouch for how frustrating this is. Especially when traveling.


As someone who lives outside of the US entirely, New York = NYC, New York State = the state of New York. As such, the original title was clear to me.


Oh whew! Glad it is nowhere important then.


Yes title should be changed to New York City as it is in the title of the blog post.


New York State was named after New York City.


Washington DC was named after George Washington, but that doesn't make it a person.


But both New York City and New York State are places. When someone just says "New York," going by which place had that name first is a reasonable way of resolving the ambiguity.

Also: "York" is a city in England. It should be apparent that "New York" also refers to a city. "New York State" is the state in which the city of "New York" happens to be.


This seems questionable. From what I recall both the province and city were named after the Duke of York when the British took control of New Netherlands (and New Amsterdam) from the Dutch in the 1600s.


My general libertarian bent generally would lead me to hate this sort of legislation, but in markets where housing is near max utilization, it's not only desirable, it's necessary. We already have enough of an issue with housing in places like NYC and SF without landlords turning apartment buildings into shitty hotels full of vacationers and Spring Break types who do not care the slightest for the condition of the property or their relationship with neighbors.


The reason there isn't enough housing, in SF especially is government intervention. Zoning laws prevent housing supply meeting demand.


I've heard SF's laws against denser housing are a major factor in the housing "shortage" there. [1]

In NYC, rent control laws are a major factor in the artificial housing shortage. There's a consensus across economists of all stripes that rent control is a bad thing ("the most efficient technique presently known to destroy a city -- except for bombing"). See the studies cited here. [2]

[1] http://pandodaily.com/2012/12/01/san-francisco-can-become-a-...

[2] http://www.econlib.org/library/Enc/RentControl.html


What you say about rent control is true - if there are not restrictions on building new housing. This is almost never true.


The question is: Would SF be as popular without zoning laws? If there were 50 story towers in the middle of the painted ladies, would it still be SF?

Or maybe I'm confusing zoning regulations with other codes.


NIMBY


As a Manhattan resident I am very pleased about this decision. As others have stated, people don't want strangers and transients living in their buildings. AirBnB was simply making profits off the inconvenience caused to residents in NYC and this is clearly wrong.

The people who run AirBnB simply don't respect the feelings of others and the investors should change management to those who do respect feelings of others.


I had a really sketchy experience as a guest this winter that made me worry about AirBnB.

I spent a few months living in the Haight with a delightful German woman who supported her photography career by renting her spare rooms in a gorgeous clean apartment.

For a while, the arrangement worked out pretty well. That is, until I ran into one of her neighbours in the stairwell. I made friendly conversation with him and he asked if I was staying at her place through AirBnB. I thought nothing of it at the time.

That night, while greeting my "landlady", I told her I met the neighbour. Her heart sank and she chastised me for talking to her neighbours (I had been living at her place for a month or so!). Turns out that many renters agreements in SF prevent the tenant from earning a profit on their rental.

Long story short, the neighbour I spoke to ended up not being so nice to her and is causing significant problems for her. She may lose her rent-controlled apartment (and thus her livelihood) all because I chatted with a neighbour in the stairwell.


And for good reason. Rent control should not allow tenants to make a /profit/ on their apartments. The current SFRB law basically states you can only 'pro rata' charge what you charge. So if you pay 1k a month for rent and you are renting it out for half the month the most you can charge is 500. Or if its a 2 bedroom and you rent 1 bedroom, you can charge 50% of that.

Not that that matters. You are basically saying you parked in a firezone while robbing a bank. You are already doing something against the law so the additional methods dont matter much.


Totally. It screws the landlord and drives up the overall cost of housing.

That said, this AirBnB host was supporting her (very frugal) lifestyle on the profits from this rental. It hurts to know that I may have played a part in undoing that.


Curious, and I haven't heard many comments on this: does this set a precedent that other states are likely to follow, and if so, is this a serious threat to the Airbnb business?


It's probably not even a serious threat in NYC; the ruling doesn't appear to bind on Airbnb itself in any ways, and apparently is only sporadically enforced.


It's likely that cities that have substantial tourism and insufficient hotel space in the tourist areas will see an increase in short-term internet-enabled rentals and will have to decide how they want to handle the issue. Austin just put in place a new short-term-rentals policy ~a year ago. It's a pretty fair policy IMO (distinguishes between owner-occupied vs investor/landlord properties, requires collection of hotel tax for the city, etc.). I don't think this'll kill Airbnb & its ilk any more than collection of state sales taxes will kill ecommerce businesses. As business models go mainstream, they inevitably end up getting regulated & taxed. It's only when they're little & marginal that they can fly under the radar.


This has to do with a manicpal law, so no. If another city had an identical law then maybe, but airbnb is plainly in violation of it--the court just triple checked.


Airbnb is no more or less legal than it was before. Some buildings and sites are allowed to provide short term rentals. Most aren't.

What is happening nationally is that people are creating short-term rentals in areas where the use and occupancy are deemed incompatible by land use regulations and building codes. The AirBnB model is no different than renting migrant workers mini-warehouses for dwelling. It's just that the landlord and tenants transfer the burden of commercial uses and transient lodging onto the surrounding neighborhood.

Disclaimer: I am currently involved in removing a short-term rental from my neighborhood. At several hundred bucks a night, transient lodgers often have few social constraints preventing them from treating the dwelling as a hotel, and normal hotel behaviors spill effect the surrounding neighborhood. The difference being that there is no onsite management and no oversight by local and state regulators as is the case with the formal economy.


AirBnB will need to evolve their service to deal with this. They are going to face this problem many times more I'm sure.

The only way I can see around it would be working with individual cities and adapting the service within those cities so that it works better for everyone.

There are many negative externalities caused by AirBnB (personally I wouldn't want my neighbours changing weekly and having access to my building and mailbox) but there are also positive ones (filling vacant properties, boosting the local economy).

When it comes to big cities like New York, Paris, London etc. AirBnb should spend the money to carry out analysis of how the service could work best for everyone and work with local authorities.


For co-ops and buildings with HOAs, etc, they would most likely ban short term stays. Which is fine since such a situation is undesirable for other residents/owners.

But for free standing homes and other buildings for whatever reason choose to allow such a thing, there should be some sort of "bed and breakfast" type rules which govern semi/non-professional letting. Sort of like on Ebay how you can sell up to a certain dollar amount before you have to pay taxes like ordinary retail businesses.


I thought this was America! Huh? Isn't this America? I'm sorry, I thought this was America. -Randy

I just went on a european trip and used airbnb. Houseboat in Amsterdam (super awesome place) My "Experience" was wonderful. However, I did feel that the security deposit was unsettling. Their word against mine kind of thing. So it goes. I guess we will just leave the hotel business to the professionals. How did 9flats avoid this?


The strangest part of the ruling to me was the following implication that it would have been fine if the tenant had gone into the housemate's room (not just been allowed access, as per the verbiage of the law) "... Morrick noted that his renter did not go into Warren's housemate's room during her stay."


If the law was created to stop large property owners from buying up residential space and creating hotels, is there a way to change the law to prevent just that?


But, technically, isn't renting an apartment for the month of February (28 days) illegal too, since it's less than 29 days that the Hotel Law stipulates?


Yes. I hope more cities follow the lead, before more people get scammed into putting themselves and their property in danger.


This is a win for New Yorkers. The whole sharing economy thing is unsafe, ridiculous, and kind of pathetic.


Please do explain.

I think the sharing economy is brilliant and the way of the future. If there's spare capacity in the world, why should it not be utilized. Unsafe? Is it more unsafe to a degree that the ends don't justify the means? I doubt it.


Perhaps sharing tools, yes. Sharing cars, MAYBE. But sharing living spaces and housing, no. Housing is one of the most intimate services out there services out there. I have standards, I have rights, and I want to feel safe and secure where I live. I am a New Yorker and I don't want to feel like I'm living like a poor person with a hotel next door.

EDIT: The very definition of a hotel - An establishment providing accommodations, meals, and other services for travelers and tourists.


What's wrong with a hotel next door? People have to sleep somewhere...

...and for that matter, is feeling like you're living like a poor person a problem? O.o


That is very elitist of you. But then again, you did say you're from NY.


When NYC residents tell you we don't want this and some startup founders in California tell you yes you do, that is elitist.


But then other New York residents agree with them by using their services and your point is moot because at the end of the day, you have no right to say they can't do that.


That's where your wrong and the purpose of this ruling is to clarify that.


Why does having a "hotel" next door make you feel like a poor person?


I phrased my point incorrectly. What I mean is when I buy a house or rent an apartment, I want stability. I want to know who's around me and see familiar faces. I don't want the variable of some new short term resident LIVING every other week right next to me. It's like choosing to live in a rich neighborhood vs a poor one; I want to minimize the risk factor of crime as much as possible as do my neighbors.


This sounds more like your own personal paranoia than any sort of rational argument agains Airbnb. The fact that you might have visitors from all over the world passing through the area only enriches the culture and worldliness. To assume that a bunch of tourists paying $150 or more a night will result in increased crime sounds baseless


I don't think there has to be a rational argument against AirBnB. I could create a business telling people that I'll tell you how to get rich, charge them $10,000 and then tell them "Work hard and look for opportunity." and you could say that's horrible and whatever else but there's no rational argument against it.

Living standards isn't something you can rationally argue. I don't care about visitors passing through my neighborhood; I care about the fact that my neighbor is bringing someone new into my neighborhood every weak. I care about the fact that people in NYC can't find a place to live. I care about the fact that even though I live in a safe neighborhood, that can quickly change overnight because that's how fast the people around me can change.

Yes it's personal paranoia but at the same time it's a debate and the residents of NYC are against it but people supporting AirBnB have said nothing but how good it is for travelers.


> I don't think there has to be a rational argument against AirBnB.

You may not think so, but I certainly hope laws are made by rational arguments.


I think I prefer the system where each voter has one vote to spend on whatever they please, without having to justify their desires to others...


Thankfully, in a representative democracy, individual votes do not directly make laws.


I think that's likely fear talking.


I am still not getting how you think it is somehow "pathetic".


> is feeling like you're living like a poor person a problem? O.o

It is when you're paying NY rents.


I wouldn't say AirBnb is sharing. That would be couchsurfing


God forbid we more efficiently allocate resources in a dynamic way.

If done safely and ethically, its a fabulous with for consumers.


At the end of the day, it's a hotel. I don't want to live next to someone from somewhere else who isn't here to be my neighbor. What about my rights?


What makes you think you have any kind of right to choose who lives next to you, or to have a say in what they do with their property? If you take Airbnb out of the equation, the assertion is ridiculous.


I have a right to say no to AirBnB. Does my individual opinion matter? Probably not. Does the collective opinion of my neighborhood matter? Yeah it kind of does.

We've been saying no to AirBnB for years, this isn't anything new. NYC says yes but for some reason the rest of the world thinks we're wrong to choose how we want to live.


If your neighbor has a friend stay with them, and their lease allows it, you have no say in the matter. It's their property rights, which flow to them from upstream property/rights owners.

This is no different. Your right end where their rights begin, which I'd say start right around where their property lines/walls are.


And their lease likely says "No subleasing". If rent controlled, it precisely defines the amount that can be earned.


Homeowners associations should be able to decide whether or not they want short-term rentals.


Well, for one thing, I got an apartment in building where I knew sub-leasing was not allowed.


I bet you have an HOA. Use it. This issue should be an HOA thing, not a state/city thing.


Move out. The simplest possible solution.

Your rights does not include the right to constant neighbors. or likable, or any. In the deed you have there is no clause of restricting the mobility of the others. (if there is - this is another thing entirely).


What exactly do you feel your rights to be in this situation?

What do you feel grants you the rights you feel you have in this situation?


How do you define 'efficient'? Is pushing out people who want to live in the city in order to fit more visitors an efficient use of resources? I would argue that it is not.


The free market is deciding what the best use of the space is, in terms of generating revenue and value for all parties involved. That's the power of the sharing economy


That's only because the effects of not having long-term residents who care about a community only manifest themselves monetarily years down the line.


only if you treat revenue and value as interchangeable. the value of someone having a stable place they can rent and not fear the landlord will kick them out to run a revolving-door hotel he can squeeze the maximum amount of rent out of is immense, whether or not they can afford to pay as much as the collective influx of transients would.


But the argument Airbnb makes is not in favor allowing building landlords to evict tenants and run illegal hotels, nor is it mine. The law should be changed to cover only that case. Not be broadly extended to cover the 87% who rent out their own home[1], to make extra personal money on the side.

[1] according to Airbnb, in the article

Edited for formatting


i believe there is also a large difference, in terms of value, between renting out your flat when you are not there, and renting out a room while you continue to live there, in terms of how much you are invested in keeping the common space pleasant for everyone.


I declare Poe's law! I can't tell whether this is someone with another viewpoint I can learn from or just some brilliant sarcasm.


> The whole sharing economy thing is unsafe, ridiculous, and kind of pathetic.

How do New Yorkers win by having less choice?


Their neighbours are more likely to be people there for the long term and with an interest in the community, rather than just renting out their place to people a night at a time.

I can see the negative side of AirBnB, though that said I just booked a place in Paris because every central hotel under $300/night appears to be booked for next week.


Do you not worry that someone will setup cameras in the WC, record you pooping, then sell the videos, together with your personal details, on an underground tor darksite in exchange for Bitcoins? And you'll never know?

I used to be very trusting of places until I stayed at a university accom during a conference one time. The janitor was up to no good, but we had to leave and no one wanted the trouble of reporting it to front desk.


I've stayed in tiny hotels in 30+ countries and not been worried about that so I'm not sure why it would be much different with AirBnB.


> Their neighbours are more likely to be people there for the long term and with an interest in the community, rather than just renting out their place to people a night at a time.

Of course that is true, but no they can no longer choose to live in places that allow AirBnBing their apartments. Your argument seems more applicable w/r/t contract law. If you don't want those kind of neighbors you can live in places that prohibit AirBnB.


Most places do prohibit AirBnB-style arrangements in many circumstances. A lot of landlords prohibit it in their contracts.


I am a New Yorker and I win by not having someone here for the short term vs an actual neighbor. This is a hotel no matter which way you try and paint it.


Can't you get the same thing by choosing to live somewhere that contractually prevents AirBnB rather than prohibiting it for everyone?

> This is a hotel no matter which way you try and paint it.

How is renting out your apartment 3 weekends a year a hotel? You can currently do that on craigslist, it's just harder to connect buyers and sellers.


They don't have less choice, they might even have more choice because flat which has been used as hotels could become flats again.


Pathetic? Care to elaborate on that?


Evidence?

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