(FEE.org) Last October, New York Governor Andrew Cuomo signed legislation that effectively banned short-term rentals within the state. Now, New York City is making good on the state’s threats and has begun punishing those attempting to skirt the new regulations on homesharing.
Hank Fried and Tatiana Cames have officially become the first casualties of New York’s war on homesharing.
Within a week of the new regulations going into effect, New York City lawmakers were eager to make an example of those continuing to list short-term rental properties online. Fried and Cames are, unfortunately, the state’s Guinea pigs, used to see just how much the authorities can get away with when it comes to penalizing those participating in the homesharing economy.
While the new law allows the state to fine guilty parties up to $7,500 per violation, the city of Manhattan took “mercy” on Fried and Cames, fining them each only $1,000 per violation.
After a thorough investigation into the matter, the state concluded that Cames and Fried had accumulated 17 violations between the two of them, bringing their total combined fines to $17,000.
While New York officials have justified these new regulations under the rationale of protecting vulnerable tourists, the real cause is far murkier and reeks of cronyism.
Now You’re in New York
New York City is one of the most popular travel destinations in the world. While homesharing services, like Airbnb, have helped travelers see the city without breaking the bank on hotel accommodations, the hotel industry itself has been less than enthusiastic about the sharing economy revolution.
As homesharing has risen in popularity over the last several years, New York City hotels have experienced record lows when it comes to hotel bookings.
Manhattan hotel costs are infamously known for being extravagant, but before the days of Airbnb, hotels were the only real option available to out-of-town guests. Fortunately, homesharing has worked in the favor of tourists in numerous ways, since hotels have now been forced to decrease their rates to the lowest they have been since 2009.
Unwilling to actually compete with their sharing economy rivals, the hotel industry did what many large industries do when they feel their business is being threatened: they asked the state to help squash the competition.
Putting pressure on local legislators, New York City hotel moguls have done all they can to make sure Airbnb and other homesharing sites are regulated out of existence.
Unfortunately, local lawmakers were either unwilling to stand up for the right of all New Yorkers to do as they please with their own property, or had a vested interested in the local hotel industry. Either way, New York hotel owners appear to have gotten their way as the state has now initiated a crackdown on local participants of the homesharing economy.
The Good Fight?
While the state and the hotel industry are largely to blame for these new egregious regulations, Airbnb has not put up much of a fight on behalf of their customers.
When the new regulations were adopted in october, Airbnb initially promised to fight the new laws by filing suit against the state. However, its dedication to this cause quickly diminished once a deal was struck which resulted in Airbnb dropping the lawsuit.
After discussing the situation with the state of New York, Airbnb agreed to abandon their lawsuit and in return, the state promised to only prosecute those listing their homes on the site, instead of the company itself.
While it is understandable that Airbnb would prioritize looking after its own interests, its platform is successful only because of the property owners willing to rent out their homes.
But whether the hotel industry, local lawmakers, or Airbnb is mainly to blame for Fried and Cames’ current predicament, it is clear that cronyism has set its sites on the sharing economy, and consumers are the ones who will suffer the consequences.