As New York City continues its ongoing effort to curb ride-sharing services like Uber, the city turns its attention to another player in the booming gig economy: Airbnb.
On Wednesday, the New York City Council passed a bill that requires the temporary home rental company to provide the contact information for thousands of hosts in the city that rent out their apartments to tourists. The city hopes the information will aid the current state law that forbids temporary leases of 30 days or less without the presence of the permanent tenant. With the new law, Airbnb will be fined $1,500 for every unlisted unit.
As a similar policy caused Airbnb listings to drop in half in San Francisco, one might wonder why the city wants to achieve the same outcome. Airbnb claims the city council is just looking out for the interests of the hotel industry.
City Council members, in turn, cite concerns over housing shortages. Council speaker Corey Johnson warned on Wednesday: “We’re in an affordable housing crisis. We’re in a homelessness crisis. And Airbnb will not give us this data.” Councilwoman Carlina Rivera claims that some hosts are everyday New Yorkers, “But many times, especially in my district, these are landlords who are taking rent-regulated units out of the housing stock because they’d rather get a lot more money per night.”
What’s striking about these comments is that the councilmen seem to ignore the city’s own role in exacerbating the housing shortage with rent regulations. There are more than 1 million “rent stabilized” apartments in the city, where rents are held below the prevailing market price and tenants have a “statutory right” to renew their lease.
Although the problem here is intuitive—the demand for these cheaper units exceeds the available supply—Bloomberg columnist Megan McArdle identifies additional issues with the policy: wealthier customers have more resources to box out lower-income renters from pursuing the same properties, and landlords face disincentives to build new housing with smaller profit margins.
As she notes, “This arrangement is very good for the people who happen to have gotten their hands on a rent-controlled apartment, and very bad for everyone else, especially newcomers to the city.”
While it’s highly unlikely that New York will phase out its rent regulations anytime soon, it should at least acknowledge the role it plays in its own housing issues, rather than pinning it on a home-sharing company responding to market incentives. Doing otherwise is simply disingenuous.
Cole Carnick is a commentary intern with the Washington Examiner.
