A proposed law making its way through the City Council would go a long way to help stabilize two crucial areas of the city’s economy hit especially hard by the pandemic: affordable housing and the hotel industry.
We can all agree that a revived, thriving New York City will feature the widespread availability of quality affordable housing stock as well as a flourishing hotel sector that welcomes visitors and, until recently, employed more than 50,000 New Yorkers in well-paying jobs with excellent healthcare. Both are and have always been integral to the city’s prosperity.
While the two may at first glance seem unrelated, a common illicit element — the proliferation of illegal short-term rentals — has done more to erode both housing and hotels over the last decade than anything short of COVID.
In this file photo, tenants, housing and community advocates rally in front of City Hall in support of legislation that would require Airbnb and other rental websites to disclose the addresses of their hosts. (Jefferson Siegel/NEW YORK DAILY NEWS)
The linkage between the housing crisis and short-term rentals on platforms like Airbnb has been well established in numerous studies, while other research has also been able to demonstrate how short-term rentals lead directly to increased rents. These were the driving factors behind the Legislature’s 2010 ban on rentals in New York City lasting fewer than 30 days. But years after the law’s adoption, short-term rentals persist on a large scale; more than 37,000 currently listed on Airbnb alone. A substantial number of these listings, probably a majority, are for illegal hotels, apartments that greedy landlords have converted from long-term residential use to short stays that are much more lucrative. Long-term tenants in these buildings suffer from a constant parade of strangers who show up with luggage and keys, loud parties at night, security problems and worse.
Legal and staffing challenges have made it nearly impossible to enforce the 2010 law, leaving commercial operators of multiple short-term units able to continue skirting it. That’s where the bill, introduced by Councilman Ben Kallos, comes in. The bill requires hosts to register with the city and obtain a registration number before they can rent out their homes, and only short-term rentals that conform to city and state law are eligible: the unit must be the host’s primary residence, and the host must be present during the rental. Registration will make it more difficult for landlords and other scofflaw operators to maintain multiple listings that are not their primary residence.
The bill is modeled after successful legislative efforts in other cities like Boston, Santa Monica and Barcelona, and is targeted at the persistent lawbreakers rather than everyday New Yorkers who might be trying to squeeze a little extra income out of an extra bedroom. Consider that the top 20% of hosts on Airbnb earned more than two thirds (68%) of the revenue. These are the bad actors a registry would help to weed out: Illegal short-term rentals are not eligible for a registration number, and platforms such as Airbnb or HomeAway risk fines if they continue to profit from illegal rentals and accept transactions from unregistered hosts. Registration in no way interferes with hosts who are now legally renting space in their primary residence while they are present.
As for hotels, a critical pillar of the city’s economy, the short-term rental registry would help level the playing field that has been tilted too far in favor of illegal hoteliers at a crucial time for the industry. While the pandemic fueled the ongoing growth of Airbnb and other home rental platforms, it shuttered more than 200 hotels in New York City alone and forced the layoff of more than 35,000 employees, the vast majority of whom represent middle-class families, many of them first-generation immigrants.
New York City needs its hotels to succeed; in 2019, they accounted for more than $4 billion in direct state and local tax revenue, helping make us the greatest city in the world. While a full recovery is not projected until 2023 at the earliest, allowing the illegal short-term rental market to flourish while hotels remain closed with their employees out of work will only delay the necessary recovery of the city’s tourism sector.
City officials have estimated that at least 15,000 apartments have been illegally removed from the long-term rental market. This registration bill will force bad actor landlords to return them to their intended use. And while there is no magic wand that will guarantee affordable housing to all New Yorkers, or instantly revive a beleaguered hotel industry, this crucial legislation will go a long way on both fronts. We call on the City Council to pass it, and Mayor de Blasio to sign it, and to do this before there is a massive turnover at both ends of City Hall on Jan. 1.
Abuelo and Cayler are members of the West Side Neighborhood Alliance. WSNA is a member of the Coalition Against Illegal Hotels.