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.
These regulations appear to mostly apply to the individuals who choose to rent out their property. Airbnb itself dodged the one big item that would have impacted them directly, which was an idea that Airbnb should be on the hook for $25 million in "back taxes."
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.
Lodging laws aren't there just to protect hotels. They exist to protect consumers and residents as well by setting standards for safety, etc. and helping pay for the services provided to guests by the municipality.
If you take AirBNB to its logical conclusion, you end up with landlords renting apartments on AirBNB instead of to actual residents, because they can make more that way -- because they're ducking the rules on offering commercial lodging, not paying for proper insurance, not paying taxes, etc.
I'm sure if someone ran a hotel but didn't bother with commercial fire codes and local taxes, they could charge less too.
Which hotel regulations do you think are overly onerous and ridiculous? Most of those regulations were put in place to protect communities and customers, not the hotels themselves. Zoning laws prevent tourists from overrunning resident communities where people don't want them. Safety and health regulations ensure that customers won't get injured or sick during their stay. Taxes help cities pay for all the improvements, services, etc. that residents want.
And yes, Airbnb is skirting the law in the loaded sense of the term. They basically encourage illegal rentals and then refuse to police them until cities like NYC force them to. They might not be directly in violation of laws themselves, but they're definitely knowingly enabling their customers to do illegal things.
Basically, people renting out rooms for short stays via AirBnB to strangers, for money, are running single-room hotels. They shouldn't be surprised that they might be subject to the same rules as hotels - either be a licensed lodging house, with all the regulations, inspections and requirements that entails, or don't go into this business.
Folks can shirk the rules or say they don't like them, but there are real reasons why hotels have to adhere to higher standards than private homes around fire regulations, etc. If cities don't enforce these kinds of rules, a landlord could just take an entire building, list it on AirBnB and completely sidestep the local regulations and taxes related to offering lodging. (And I suspect it's the lost taxes that city government are most concerned about right now.)
- There's been several reports of SF landlords kicking out tenants from rent controlled apartments to lease out rooms on AirBnB. While I am against rent control (it's a terrible system that creates a few winners and fucks over most people who cannot get such a flat) it's obvious that this is an abuse of the system
- Until recently, AirBnB fought tooth and nail against paying hotel taxes.
I think safety regulations are mostly overkill, and I'd get rid of most of them in a heartbeat, but while those regulations exist, you cannot simply outcompete other players that are forced to follow regulations you avoid.
It's a little unclear to me why this category wouldn't escape regulation, since it's clearly just an entire apartment building where they converted each apartment to an Airbnb for economies of scale around cleaning, maintenance, etc. They're displacing just as many residents as the same number of equivalent Airbnbs spread around a neighborhood. Whereas most traditional hotels feel purpose built for that and couldn't easily be apartments.
No, their complaints aren't strictly about the missing tax revenue. There are other regulations that would need to be addressed (health, safety, etc...). Hotels are a heavily regulated industry with good reason. Regulations are a protection mechanism to protect the city/neighborhood and the consumer.
I think that there is a clear difference between renting out a room or occasionally renting your entire place, versus keeping a separate apartment strictly for renting out on AirBnB.
But mostly the city wants to ensure they get paid and keep the lodging industry off their backs. Hotels pay occupancy taxes and want AirBnBs to have that encumbrance.
I have a property in an area that has it all figured out and I had to get it certified by an inspector, pay some fees, and submit occupancy taxes. Most skirt the laws.
Chicago did it right in my opinion by requiring AirBnB to manage and submit the taxes and fees.
This sounds great, but I see problems on the horizon. If you are using a site like AirBnB I assume you are able to avoid paying hotel related taxes. Many cities get a significant portion of their revenue from these taxes. There are already laws on the books in many cities that restrict AirBnB style rentals. It's only a matter of time before cities begin enforcing those laws.
I'm not going to convince you otherwise, but I can try:
* I think prosecuting tax evasion is one reason. It's hotel tax actually and not income tax, but tax evasion is tax evasion. However, I don't see why AirBnB host should play by different rules than a b&b-style guest house.
* Same applies for zoning restrictions. We can debate if the current restrictions are sensible or not, but that's the playground and the rules and we all play by the same rules.
* Hotels are cesspools. Yes, some are. Even chain hotels are. I don't know about NY hotels but I've seen quite a few and they range from "great in all regards" to "glad I'm far away". All in all most hove been acceptable. B&B rentals are on the same scale. At least with hotels there's a place I can report violations to.
I fail to see any reason or moral right that AirBnB host should not have to register as a B&B place, not pay the applicable fees and not adhere to the applicable rules. They're totally free to do that and then advertise on AirBnB. However, the implied reason a lot of hosts don't do that is because their landlord won't allow them to sublet the apartment - but that's a totally different problem. I fail to see any moral right that your landlord has to allow sublets. It's also none of the states business.
There's a lot wrong with governments and corruption and often they're incompetent and played by interested parties, but I think it's wrong to always assume that as the primary cause for government action.
There seems to be some confusion about the tax issue here .. many commenters seem to think that AirBnB hosts are avoiding tax on their income via AirBnB. That's simply not true, in fact AirBnB reports this income to the IRS and you are required to fill out a tax form to continue hosting.
The issue at question is a tiny (% wise) hotel tax. In my view AirBnB is not resisting this tax for its own sake, but rather because it risks classifying hosts as hotel operators.
AirBnB is a wonderful service, and yes it has flaws, but NYC is caving to the demands of political interests who know how to play the lobbying game.
Most cities have laws against individuals running unlicensed hotels out of their apartments. AirBnb chose to ignore those laws and encourage others to do so as well.
The person I was replying to enumerated a list of reasons for airbnb being bad. The reasons he gave seem like there could be a good amount of overlap between non-airbnb rentals and airbnb rentals.
The law is just the current rules that are defined for a given jurisdiction. I don't think they codify the reasoning behind why the law was enacted, what it was looking to prevent, or how it hoped to achieve that. The reasoning behind why these laws were enacted could range from genuine concern for safety to nymby-ish "because I want my house to appreciate in value more".
The problem is, they are helping people break the law (the fine is for advertising illegal touristic rents) If someone rents a place repeatedly (for vacationing) they need a permit (which includes checking the place for safety measures, specially for the tenant) as well as paying another type of taxes. Likewise for longer than 30 days renting: for this the place has to be a for-rent place, registered somewhere else. The government is just asking AirBnb to follow the law, advertising only legal places that have their stuff in-place.
Not only that, but it's hard to know if AirBnb hosts are declaring their taxes properly (AirBnb could enforce this, though.)
As a Spaniard, I like seeing some disruption in areas that need it, and promoting leasing/rentings definitely needs it. But as a freelancer who pays quite a lot in taxes, it boils my blood that so many people (including most government officials, granted) try to game the system.
As for the quote, I can't find it anywhere in local sources, neither did I hear it yesterday when the officials appeared on news. So, it's probably a writer error, meant to be and.
People don't like living next to hotels. This has never really been a problem because until recently the barrier to operating an apartment as a hotel was very high, so no regulation arose to regulate it. All current movements for AirBnB licensing are doing is regulating these as if they are hotels.
It doesn't keep you from staying at a hotel, that's a choice you make. Also, I've stayed at AirBnb locations where there was no other accommodations options, so it's difficult to argue it's taking business from a hotel in these scenarios. Additionally, I wouldn't be surprised if bigger hotel chains legally evade loads of tax like virtually all large multinational companies do, which isn't an option for most AirBnb hosts, who must pay full tax on everything (or face the consequences, e.g. the situation in New York).
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.
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