Date: June 2016
Originally Published: NY Daily News
The growth of the technology sector in New York City is a wonderful development. It brings jobs, innovation and tax revenue. But technology is not such a good thing when it is used by people to break the law.
Last week, the state Legislature took a common-sense step to prevent technology from enabling property owners and tenants to rent their units illegally. The Senate and Assembly passed a bill that would make it illegal to advertise short-term apartment sublets that are already barred under state law. If the legislation is signed by Gov. Cuomo — and it should be — tenants and owners will run the risk of paying hefty fines if they list apartments on services like Airbnb for stays of less than 30 days without the tenant or owner being present.
Several years ago, the state prohibited such short-term stays, for several good reasons.
First, New York City desperately needs rental housing — the more of it, the better. The city continues to set new highs in population growth. Two-thirds of the city’s housing stock is rental. If we are to continue to grow and add jobs, we must retain and create rental housing. Short-term rentals take housing units off the market.
Second, the city has a thriving hotel industry that produces quality jobs. If the state had not prohibited short-term stays, it would have been permitting precious rental units to compete with the city’s hotels and threaten the jobs they create. Some landlords and leaseholders would profit, but the rest of us would pay a steep price.
Yet despite that law’s passage six years ago , the use of sharing services like Airbnb has flourished. There is good reason to believe that such services are enabling law-breaking on a vast scale. In 2014, state Attorney General Eric Schneiderman released a report that found as many as 72% of Airbnb reservations over several years he measured violated New York law. We have met several times with representatives of such sharing services and they have steadfastly refused to share their data or to take strong steps to crack down on illegal behavior.
Given the lack of cooperation and self-policing by the sharing services, the Legislature was left no choice. Lawmakers could either stand by and watch rental apartments get turned into hotels or do the right thing and make it illegal to advertise such behavior. They are to be applauded and not condemned for their actions.
The legislation passed by the state last week will not penalize the lawful use of sharing services, like Airbnb — only the illegal use of such services. Moreover, it will introduce a measure of fairness to enforcement. Right now, building owners are held responsible for a violation, regardless of whether or not they were responsible for its occurrence.
That sometimes results in aggregate fines on a landlord of more than $50,000 on the owner for the tenant’s behavior. Under the legislation, the person who seeks to advertise the illegal sublet, be it an owner or a tenant, will be the one who must pay the fine for breaking the law.
It takes an especially egregious actor to unite a very broad coalition. An alliance is forming between the state Legislature, City Council, housing advocates and the hotel and real-estate industries to stop illegal activity from resulting in the loss of rental units and hotel jobs.
Advocates for the tech industry are either blissfully ignorant of existing law or disingenuous when they assert that the new law sends a message that technology companies are not welcomed here.
Nothing could be further from the truth. We welcome such sharing services and wish them every success — so long as they are being used in a lawful manner.