Source: New York votes to ban ads for whole apartments on Airbnb
According to Engadget Airbnb is not at all happy with the recent ruling by New York to “make it illegal just to advertise your entire place for a short (under 30 days) rental. You’ll face a $1,000 fine the first time you’re caught, $5,000 the second time and $7,500 the third. Governor Cuomo still has to sign the bill into law, but that’s likely to be a mere formality.”
It was already illegal to offer your whole apartment for short-term rentals through services like Airbnb, but this new bill is “giving that legislation some added bite.’ No wonder then in this article “Airbnb Hurt by NY Ban on Short Term Rental Ads” we hear that the company feels it is unjust.
Airbnb says NY Ban on Short Term Rental Ads is a “conspiracy between the government and the hotel industry, and argues that it’ll increase the odds of bankruptcy, eviction, or foreclosure for 30,000 state residents who might otherwise struggle to make ends meet.”
What worries NY is that housing supply is dwindling as many realestate speculators buy up properties “solely to profit from Airbnb rentals. “The would-be law should limit short-term rentals to people who actually live in their homes.”
Shared Travel Economy Under Attack
Its not the first or last time that we will see Airbnb come under pressure. The successfully won the vote when San Francisco moved to stop their short term rental with a proposed bill that would limit home rental to 3 moths a year. “The City initiative would have meant house renters could only let homes for under 90 nights a year. They undertook studies that showed how Airbnb has removed available housing for residence. A problem where 63% of homes are valued at $1 million or more and rents are now an average of over $4,000.” See AirBnb wins over San Fancisco.
Hotel association dont like this type of shared hospitality as it cuts into hotel revenue. They lobby hard to contain these properties saying that they are unlicensed establishments that do not comply with city regulation and are not governed by hospitality standards. At the same time Governments also need to know that accommodations offered to tourists are of acceptable standards. They want to sustain their tax base and they also worry about availability of reasonably housing for residents. Both are staked against Airbnb who is likely to have several more fight on its hand.
Report conducted by HVS Consulting & Valuation, a leading hospitality consulting firm, and was commissioned by the Hotel Association.
NY City Study by HVS
As they say: “Hotels are labor-intensive operations that generate significant employment opportunities for a community. By removing demand from the market, and the need to service those rooms, so too are jobs removed from the market that would handle the operations of those rooms.”
The study shows how Airbnbs Negative Impact on Hotel Industry is hurting jobs, housing and tax: 2,800 jobs were lost to Airbnb and it reduced revenues in the lodging industry by $2.1 billion in New York City and and the broader economy of City over the course of the last year. Airbnb, the study says, has costs the local, state and federal governments more than $226 million annually in lost tax revenues.
With facts like that it is no wonder that other Cities and states are putting AirBnB under a microscope.
San Francisco moves to Curtail AirBnB
Its home town, San Francisco, even has gone on the offensive, with Proposition F, planed to limit short-term rentals. Prop F was initiated by the affordable housing advocates who are frustrated that local housing is being used as rentals for tourists when “residents face skyrocketing rents and evictions.” AirBnb is fight back with an 8 Million advertising campaign which may be working, but unrest is in the air and if they loose a few of these types of proposition it will hurt the bottom line and put a dent in the sharing economy for travel. more see >> http://venturebeat.com/2015/11/01/airbnbs-8m-campaign-against-prop-f-in-san-francisco-appears-to-be-working/
Laws to Protect Tax Base and Housing
In NY, the HVS analysis warned that “With the Airbnb revenue staged to potentially double in size, we only expect these impacts to grow proportionately and become a more significant and important factor in the competitive landscape of the New York City lodging market”. A 2010 NY state law prohibits the short-term rental (less than 30 days) of apartments in the City when the host is not present. Download the report at the Hotel Association of New York City (PDF 503 KB) – See more at: http://hotelmarketing.com/index.php/content/article/new_study_confirms_airbnbs_negative_impact_on_hotel_industry#sthash.0XIkSK8U.dpuf
Sand Francisco Prop F is more stringent, defining short terms under 3 months would be prohibited. The AirBnB investment of 8 Million on an advertising campaign to stay public opinion gives us an idea of how the value this treat. We will keep an eye on how this unfolds.
AVS Study Source: Download Report AirBnB Ny Impact Study
San Francisco Source: Venture Beat >>>