New York Has Reservations With Airbnb

New York Has Reservations With Airbnb

In the thriving and ever-changing domain of travel innovation, one thing can always be relied upon to never change — someone, somewhere, is objecting to it. The full-service airlines don’t like budget carriers, travel agencies dislike package aggregation web sites and no doubt fortune tellers have strong feelings about the range of travel insurance options available.

The latest manifestation of Incumbent versus the Future is crowd-sourced vacation rentals, in particular, Airbnb versus no less estimable an opponent than the Governor General of the City of New York.

Airbnb, like a lot of such larks these days, is the internet version of an age-old idea — in this case renting out a spare room. Anyone with some temporarily extra space, as often as not an entire apartment, can advertise it on Airbnb, set whatever price they like and potential tenants can read reviews, chat with the host, look at pictures of the property and book a weekend away. Cleverly enough, as soon as they do, they’re reminded that they now have a room to spare too.

This has scandalised the poor City of New York, who contend that in addition to offering a cheap and occasionally exotic alternative to cookie-cutter chain hotels, which is obviously bad (for the hotel industry), Airbnb could be also used to evade taxes! Which is obviously bad (for New York).

And they’re probably right. Airbnb is a slick operation with a massive online presence, a probably ridiculous market capitalization of $10 billion and seductive subway ads of penthouses, boathouses and treehouses that you can rent for cheap, provided no one is paying any taxes. And there’s exactly as much oversight as you’d expect from an organization that operates in 33,000 cities but exists mainly on the internet — approximately none. Airbnb encourages its hosts to report their income and explains how to do it and in some cities, like Portland and San Francisco, city taxes are included in the price. But there’s no such arrangement with New York and in any case the city’s real goal appears to be protecting the established hotel industry.

a treehouse in Vermont

Airbnb getaway, a treehouse in Vermont / photo: Airbnb

It’s illegal in New York to rent out your property for less than 30 days unless you’re on the premises. That sounds weirdly specific enough to be one of those strange archaic laws for example, one that forbade marriage-aged gentlemen from wearing a cummerbund on the sabbath, or this Virginia law that forbade a woman to drive a car up Main Street unless her husband is walking in front of the car waving a red flag. Well it isn’t. It’s a city by-law introduced in 2010 with the baldly expressed goal of criminalizing Airbnb’s business model within city limits. New York characterizes the dispute as a battle against tax evasion and the use of unregulated vacation rentals for illicit activities. By the way, this ‘Tax Evasion” tactic is not new either, it was first used, very successfully (and rightfully we might add) on Al Capone.

New York is the first major constituency to say out loud in a court of law that it’s living squarely in the past but it’s not alone. Singapore has a similar and more blunt law that simply forbids rentals of less than six months and British hosts are probably in breach of their mortgage and insurance agreements. But New York is the city that Singapore and London will be watching as the Attorney General’s office petitions the courts for a list of Airbnb’s hosts active in the vicinity.

That amounts to a closely held list of 15,000 and Airbnb is naturally reluctant to divulge it, fearing a backlash from their clandestine subscribers who presumably will resort to hanging around the docks whispering discrete offers of a weekend in a Soho loft conversion with wifi and cable included.

And as is so often the case when the real issue is money and everybody’s pretending it’s not, they’re both wrong. Airbnb’s hosts are avoiding taxes because it’s convenient to avoid taxes but if called upon to do so, most would likely fall in line. After all, these hosts are just regular home-makers. (With some -notable- exceptions.) And the city’s absurd efforts to shut the concept down altogether are exactly as foresightful as were early efforts to shore up the sacred horse and buggy industry. It can’t be stopped any more than prohibition could stop booze or suing broke college students for millions is going to stop file-sharing.

Cracking down on Airbnb is probably sufficiently difficult that it qualifies as impossible, but even then there are already countless competitors like Flipkey, Roomarama, Couchsurf and, for those who like to spice up their travels with a little larceny, Craigslist. And if New York thinks it’s going to have the resources to stay on top of the vacation rental whack-a-mole then it’s probably because they haven’t considered the quantity of creative legislating that’s going to be necessary to protect the hotel chains.

From either the cynical perspective of the Luddite and the tax collector or the jolly optimism of the adventurous traveller, Airbnb is a natural and inevitable evolutionary development born in the fertile mass of the internet. It or its imitators aren’t going to go away and just as authorities have had to eventually offer more imaginative solutions than outright bans of horseless carriages and mini-skirts, Airbnb and its guests will be accommodated.


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