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Businesses The Almighty Buck Communications Government The Courts The Internet United States

Hotel CEO Openly Celebrates Higher Prices After Anti-Airbnb Law Passes (washingtonpost.com) 310

Posted by BeauHD from the two-sides-to-every-story dept.
An anonymous reader quotes a report from Washington Post: A hotel executive said a recently-passed New York law cracking down on Airbnb hosts will enable the company to raise prices for New York City hotel rooms, according to the transcript of the executive's words on a call with shareholders last week. The law, signed by New York's Governor Andrew Cuomo on Friday, slaps anyone who lists their apartment on a short-term rental site with a fine up to $7,500. It "should be a big boost in the arm for the business," Mike Barnello, chief executive of the hotel chain LaSalle Hotel Properties, said of the law last Thursday, "certainly in terms of the pricing." Barnello's comment adds fuel the argument, made repeatedly by Airbnb and its proponents, that a law that was passed in the name of affordable housing also allows established hotels to raises prices for consumers. It was included in a memo written by Airbnb's head of global policy, Chris Lehane, to the Internet Association, a tech trade group, reviewed by the Washington Post. LaSalle, a Bethesda, MD-based chain, owns hotels around the country, including New York City. The memo is the latest volley in a bitter fight that has pit the hotel industry, unions, and affordable housing advocates against Airbnb and its supporters. At the heart of the fight is a debate over the societal value of the Airbnb platform and its role in the economy of cities throughout the world. The question is whether Airbnb has been a net benefit, by enabling middle class city-dwellers to make extra money by renting out their homes, or whether it has had the unintended consequence of exacerbating affordable housing crises in expensive cities such as New York and Los Angeles.
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Hotel CEO Openly Celebrates Higher Prices After Anti-Airbnb Law Passes More

Hotel CEO Openly Celebrates Higher Prices After Anti-Airbnb Law Passes

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  • except it wasn't people renting out their rooms (Score:5, Informative)

    by known_coward_69 ( 4151743 ) on Thursday October 27, 2016 @08:05AM (#53160681)

    here in NYC data from AirBnb showed that most of the apartments for rent for always available for rent because the owners were making more money on it then renting them out as housing. in a lot of cases it was affordable housing with special tax breaks being used as a money maker

    • Re:except it wasn't people renting out their rooms (Score:5, Insightful)

      by jellomizer ( 103300 ) on Thursday October 27, 2016 @08:13AM (#53160727)

      However the law shouldn't had been such a blanket ban, but more targeted towards people who abuse the service. Stipulations such as a minimum living time, in the building by the owners say 200 days a year. Rules to insure that safety and equality measures are taken place as AirBnB does have a problem with people excluding minorities. In essence to make sure people who are using the service are not playing by a different set of rules.

      • Re:except it wasn't people renting out their rooms (Score:5, Insightful)

        by lucm ( 889690 ) on Thursday October 27, 2016 @08:26AM (#53160805)

        Airbnb and hosts make money at the expense of the neighbors. That's abuse by itself.

        You live in a nice quiet condo tower, and then suddenly it's 24x7 party next door because the unit is being rented on Airbnb. What can you do? It's a new temporary tenant every fee days so even if you complain this start overs the following week.

        Hotels are equipped for this and designed for this. Residential buildings are not. It's unfair to put this burden on neighbors just so the host and a startup can make a few bucks.

        • Re:except it wasn't people renting out their rooms (Score:5, Insightful)

          by thegarbz ( 1787294 ) on Thursday October 27, 2016 @09:51AM (#53161307)

          You live in a nice quiet condo tower, and then suddenly it's 24x7 party next door because the unit is being rented on Airbnb.

          All your airbnb's turn into a 24/7 party? What they hell are you guys doing? Most of the time I see AirBnb's empty during the day and having several passed out tourists snoring in beds at night. I challenge your assertion that the place suddenly turns into a party room.

          • And have you seen the walls in the condos? The snoring! THE SNORING!!!

            • If it's a shitty low rise wood frame condo, noise is a problem, but then again that's the case in some woodframe condos I've seen that have notices in the elevator asking people not to close their cabinet doors too hard. That's not an AirBNB or regular occupant problem, that's a "developer was cutting corners on soundproofing/not bothering with soundproofing to maximize profit" problem. I live in a concrete tower and I hear *nothing*. It's lovely.

        • Sorry but you could just as easily have someone move in who likes to party all the time. If you don't like hearing the sound of other people you shouldn't have packed yourself like a sardine into condo tower with them. There is a great big world out there, in most of it even a townhouse is just an apartment and you'd ONLY buy one as part of the building full of them you were buying in order to rent it out to others.

        • You live in a nice quiet condo tower, and then suddenly it's 24x7 party next door because the unit is being rented on Airbnb.

          Condo towers are private associations; they can ban AirBnB for their association if they want. They can also assess steep fines against association members whose use of their condo disturbs the neighbors. It is exactly those kinds of neighbors that share walls and whose actions strongly affect each other that are bound together in private associations. Therefore, there is no need to i

        • I would imagine that the condo association should then hold the condo owner accountable for the behavior of his or her Airbnb guests. There is no need for the government to get involved.

        • Your condo contract doesn't include a rule that you, as the owner, are held responsible for all problems your potential renters cause? Odd. Mine does.

          This problem has a very easy solution.

        • > You live in a nice quiet condo tower, and then suddenly it's 24x7 party next door because the unit is being rented on Airbnb. What can you do?

          Uh, you complain to the strata and the unit owner gets fined. You keep complaining and the owner keeps getting fined. At some point the number of fines will outweigh their profit and they stop AirBNBing the place. Works here in my tower.

      • Ridiculous, rules against discrimination make sense when you are talking about a large corporation like a property management company or the like, when you are talking about an individual choosing who they trust in their home they should be entitled to select people on any basis they like.

      • Re:except it wasn't people renting out their rooms (Score:5, Insightful)

        by Swave An deBwoner ( 907414 ) on Thursday October 27, 2016 @11:26AM (#53162001)
        AirBnB's propaganda misstates what the law says.

        http://www.nytimes.com/2016/10/22/technology/new-york-passes-law-airbnb.html [nytimes.com]

        Since 2010, it has been illegal in New York to rent out a whole apartment for fewer than 30 days. But some tenants and landlords have ignored those rules and have been using Airbnb to rent out their apartments for much shorter periods.

        The law does not preclude you from offering a room for rent on AirBnB in an apartment you continue to reside in, i.e., while you are present. Bottom line is that you must continue to live there during the rental period, sort of like taking on a short-term roommate. Perfectly legal.

        The law doesn't even preclude you from subletting or renting your entire apartment on AirBnB, provided that the rental period is 30 days or longer. That brings the rental under New York's apartment rental laws, and gives the person who rents the apartment certain rights that they would not have had with a shorter rental period. Perfectly legal.

        The law does preclude you from renting an apartment for fewer than 30 days in which you will not be also residing during the rental period.

        TL;DR : the law is intended to prevent landlords from turning their apartment stock into hotel rooms.

        Cry me a river for AirBnB and for the landlords who have been abusing the already existing NYC law to extort even more money from their already overpriced NYC housing inventory. They bought their apartments knowing what the law was; they just figured that nobody would bother enforcing it. Well, surprise, surprise, surprise!

    • Yet again, the old truth manifests itself. When you meddle with the free market, you only make things worse... The cental planning of command-and-control economies — such as that of New York City — is not only less fair, but also less efficient, than free market capitalism.

      • Support your claim (Score:5, Insightful)

        by Actually, I do RTFA ( 1058596 ) on Thursday October 27, 2016 @11:47AM (#53162169)

        When you meddle with the free market, you only make things worse

        What makes you think things are worse or less fair? Obviously, any distribution of resources, compared to any other distribution is going to be good for some people and worse for others. I'll say, not only does this rule make things better for the far majority of people, it also makes things far better for the vast majority of people who can vote in NYC elections.

        Winnners:

        1. Hotels - Obvious
        2. Neighbors of AirBnB rentals (at least many) - Many neighbors dislike being next to an AirBnB. This keeps them from having to
        3. NYC - NY gets a cut of hotel rates (but not AirBnB), hotel rates going up is good for them.
        4. Renters - AirBnB was driving up rental prices, because it was introducing an alternate demand for the resource (apartments) to turn into microtels.
        5. Law and Order - Many of these AirBnB rentals were in violation of the very leases that the free market provided to the people subletting on AirBnB. (Note, a lot of those rules were because of the 'neighbors point above')
        6. Law and Order (2) - There are many rules about leasing short-term accommodations that were not being followed.

        Losers:

        1. AirBnB - This one's obvious.
        2. Non-rent-controlled landlords - Rents are going to go down.
        3. Visitors to NYC who stayed in hotels - Prices are going up.

        Uncertain:

        1. Visitors who were going to stay in AirBnBs - They'll either have to not come or get pushed to a hotel. However, they also get all the benefits of a regulated experience, which may be worth it. That's a big question mark.

        Why shouldn't a city be able to look at those tradeoffs and make a decision?

        • PRIVATE PROPERTY OWNERS who can and should be able to use their private property however they choose.
    • While they certainly should not be getting "affordable housing" tax breaks if they are renting them out on Airbnb, I am not sure why it is anybody's business that the property owners are making more money by renting them out short-term rather than long term. My observations are that the more the government gets involved in making things "affordable" the less affordable those things are.

      • My observations are that the more the government gets involved in making things "affordable" the less affordable those things are.

        Ummm... except for vaccines, flood insurance, home loans (if black/latino), fire protection, car insurance, phone service, food, GPS, postal services, etc.

        • I am sorry, but I am unaware of any successful efforts by the government to make ANY of those more affordable.
          Certainly the government is responsible for the existence of vaccines and flood insurance. I will not argue about the government involvement in vaccines because I have never looked at the role government plays there. Flood insurance is an example of an idea that seems good that may not be so good after all. Basically, at this point government guaranteed flood insurance is a subsidy by the middle c

    • Re: (Score:2)

      by mysidia ( 191772 )

      always available for rent because the owners were making more money on it then renting them out as housing.

      Makes sense. In other words..... listing that unit on AirBnB provides more value to both the owner and to the public than offering
      that unit for long-term rent, since there is more consumer demand for what AirBnb provides than for long-term housing,
      otherwise the two should cost about the same per day to rent.

      Meaning what AirBNB does makes things fairer for people.

      With a long-term rental I get stuck

    • Re: (Score:2)

      by PRMan ( 959735 )

      Then the correct solution is to outlaw the use of affordable housing in AirBnb only.

  • taxes (Score:3, Interesting)

    by Anonymous Coward on Thursday October 27, 2016 @08:09AM (#53160711)

    The law is there because the city is missing out on the tourist taxes hotels collect. Higher prices means more tax for the city, a win for everyone except the tourist. If Airbnb finds a way to pay the taxes these laws won't spread.

    • Re:taxes (Score:5, Insightful)

      by rudy_wayne ( 414635 ) on Thursday October 27, 2016 @08:41AM (#53160867)

      The law is there because the city is missing out on the tourist taxes hotels collect. Higher prices means more tax for the city, a win for everyone except the tourist. If Airbnb finds a way to pay the taxes these laws won't spread.

      There's nothing to prevent AirBnB from paying those taxes now. But the whole purpose of AirBnB's existence is to be in the house/apartment rental business but but pretend that they aren't so they can *AVOID* all the rules and fees that everyone else has to pay. Same with Uber and all the others. They just want to be a middleman who does nothing but skim a few dollars from every transaction, with no accountability to anyone.

      • Re: (Score:2, Insightful)

        by Archangel Michael ( 180766 )

        they can *AVOID* all the rules and fees that everyone else has to pay.

        And yet, liberals fail to see the actual problem. So, instead of recognizing the problem (too many fees and rules), they create more fees and rules designed to prevent people from avoiding all the previous fees and rules. And when someone figures a way around that, they add more fees and rules.

        The real problem is, that nobody is stopping long enough to ask do we need more fees and rules to protect the people who have set the barriers to entry protecting their industries?

        The biggest gripe I've seen is that t

        • And yet, liberals fail to see the actual problem.

          Hey, hey, hey there... It's not just limited to liberals. I live in the "deep south" surrounded by some of the biggest conservatives out there, and there's tons of folks around these parts that act like airbnb is some kind of liberator to their "freedom". You just stop and say, "um, you could have totally rented out your place before airbnb was invented WTF?!"

      • They just want to be a middleman who does nothing but skim a few dollars from every transaction, with no accountability to anyone.

        They should start a bank instead.

    • I doubt that's the real issue. The city of Amsterdam complained about tourists using AirBnB not paying their taxes, and simply made a deal with AirBnB. AirBnB now collects the taxes from tourists and pays the city.

      The real problem cities have with AirBnB is that a lot of people, either landlords or tenants in subsidized or rent controlled housing, are effectively turning their homes into hotels, but without all the rules and regulations regarding fire safety, hygiene, registration and so on which real

  • Lower rents for residents, at the cost of higher hotel prices for visitors. Sounds like a very reasonable tradeoff.

    • And there is evidence that rents are lower as a result of this regulation/law?

      • Actually, the rents tend to be higher and availability is lower, since Landlords can now rent AirBNB and earn more money than they can doing whole month leases.

        The problem isn't for the Landlords it is for the big Hotels that are losing lots of customers due to increased supply. These new rules are designed to realign the supply for the benefit of the entrenched industries (hotels)

  • A hotel executive said a recently-passed New York law cracking down on Airbnb hosts will enable the company to raise prices for New York City hotel rooms...

    "Dammit, Mark! We all agreed! We don't teach the easants-pay about asic-bay economics-way!"

  • Capitalism? (Score:5, Insightful)

    by MeNeXT ( 200840 ) on Thursday October 27, 2016 @08:37AM (#53160853)

    It seems that every time we have a good example of capitalism the entrenched players come in and justify why it doesn't work. There is no way that capitalism will ever exist in it's true form because the established payers have no incentive to allow it. That's one reason but this article mentions another, subsidized housing (socialist solution that encourages lower wages).

    There is no right or wrong here if the playing field would just remain constant but as soon as there is a way that the little guy can make a profit the rules change. I may be over simplifying the problem but the way I see it if rules were not written to favor one citizen over another then maybe we would see the wealth evenly distributed.

    • There is no way that capitalism will ever exist in it's true form

      I very much hope so.

      • I bet you can't even articulate why you think Capitalism is bad, and what the "better" option would be, without using anecdotal evidence and emotionalism.

    • And comrade, as soon as world communism is established the Politburo will disband but until then it is only reasonable for ministers to have second dacha to recuperate from all hard work they do on behalf of the people.

    • "But we need to protect the ___________ industry ... because of jobs"

      Government should stop protecting industries from competition
      Government should stop sponsoring industries that can't support themselves

    • It seems that every time we have a good example of capitalism the entrenched players come in and justify why it doesn't work. There is no way that capitalism will ever exist in it's true form because the established payers have no incentive to allow it.

      There are plenty of pretty economically liberal areas within the US and around the world. The fact that NYC is not one of them doesn't change that.

      In fact, the biggest problem the US faces is that many other countries have caught on to the benefits of free ma [heritage.org]

    • 'wealth evenly distributed' - well that's a nonsensical idea. Wealth cannot and should not be 'evenly distributed', somebody will always be more efficient than many other people, thus wealth will never be 'evenly distributed', nor should it be.

  • At the heart of the fight is a debate over the societal value of the Airbnb platform and its role in the economy of cities throughout the world. The question is whether Airbnb has been a net benefit, by enabling middle class city-dwellers to make extra money by renting out their homes

    These things don't enter in as legitimate questions in a free society. Free people reserve their right to enter a new business and compete. Opportunities are not things to be doled out to powerful and connected people in backroom deals.

    It is literally laughable that these wealthy people carving up the power to rent to you, used "affordable housing" as a meme to get this anticompetitive law passed.

    Observe as attack lap dogs regurgitate distraction memes about safety or regulation. No shortage of memes sup

    • Observe as attack lap dogs regurgitate distraction memes about safety or regulation.

      Most of those meme fail once you actually test them. The "Safety" regulations aren't just the obvious (Fire alarms), but go all the way down to "bedbugs". The problem is, that no amount of regulation actually solves any problem and the regulations aren't actually enforced when there is a failure. Yes, Hilton has fire detectors in every room because of regulation, but my view is that they would have them (eventually) anyways. It is kind of like "free wifi" is, it is a "selling point". Eventually everyone has

  • Neighborhoods, not hotels or housing stock (Score:4, Interesting)

    by ZipK ( 1051658 ) on Thursday October 27, 2016 @08:41AM (#53160873)
    Consistently lost in the discussion of protecting hotel trade or preserving housing stock is the negative affect Airbnb has on neighborhoods. People buy houses in residential neighborhoods to enjoy the benefits of... residential neighborhoods. Introducing an unknown, transient stream of tourists and other visitors into stable neighborhoods is generally a net-negative for the neighbors. Airbnb allows individuals to unilaterally monetize the peace and safety of their neighbors. That is the problem with Airbnb.
  • I totally support banning Airbnb for the usual arguments (flophouses, property values, rental markets, etc). Still, this CEO isn't going to help anything by giving Airbnb supporters ammunition. Thanks, jackass.

  • I'm confused... (Score:5, Interesting)

    by kenh ( 9056 ) on Thursday October 27, 2016 @09:15AM (#53161071) Homepage Journal

    It is newsworthy/noteworthy that reduced competition leads to higher prices?

    From what I understand, cities like NYC have very carefully-crafted laws regarding hotels designed to protect the rights and safety of both the hotelier and the guest. AirBnB wants to be exempt from all those regulations and hospitality taxes because, well, it allows them to offer a lower-cost option without any significant investment. In effect, AirBnB wants to be a hotelier that owns no hotel rooms, pays no hospitality taxes, and has no legal responsibility for anything that happens in a space they rented.

    That AirBnB can't pick and choose the tax, safety, and other regulations that apply to their 'service' isn't discriminatory against AirBnB, it is treating everyone equally.

    • Re:I'm confused... (Score:4, Insightful)

      by thegarbz ( 1787294 ) on Thursday October 27, 2016 @10:00AM (#53161375)

      cities like NYC have very carefully-crafted laws regarding hotels designed to protect the rights and safety of both the hotelier and the guest

      I'm sure this is exactly what happened as shown by this example of the powerful hotel lobby. It's all for guest safety. /sarcsam

    • That AirBnB can't pick and choose the tax, safety, and other regulations that apply to their 'service' isn't discriminatory against AirBnB, it is treating everyone equally.

      AirBnB isn't picking anything. They are hooking up private property owners with private guests. This is no different from renting out rooms on Craigslist or having a Bed&Breakfast, except that it is actually safer for both renters and hosts.

  • So why don't these owners that want to do this.... (Score:5, Interesting)

    by mark-t ( 151149 ) <marktNO@SPAMnerdflat.com> on Thursday October 27, 2016 @09:29AM (#53161153) Journal

    ... just get a bed and breakfast license, and then be exempt anyways? Home-based business licenses aren't *THAT* expensive, after all.

    While it means you'd have to pay tax on the money you make from rentals... that's what you were supposed to be doing all along, right?

  • I protest (Score:3, Interesting)

    by fulldecent ( 598482 ) on Thursday October 27, 2016 @09:47AM (#53161277) Homepage

    Whereas my agreements with temporary tenants are mutually consensual
    and there are no complaints from my neighbors
    and justification for this law is to control housing prices
    now therefore I do not recognize the legislature's authority to make this regulation.

    I will continue to rent out my room in short terms. But I will now call it a long-term lease with early cancellation provisions. Or I will call it a house sale with temporary back-out period. Or I'll call it housesitting.

    This generation is finally getting involved in local politics in the best way. They are circumventing the letter of unjust laws and following the spirit of the correct constitution. This demonstrates knowledge of law, civil disobedience and allegiance to the constitution, what could be better?

    • what could be better?

      Gallows in the public square?

    • and there are no complaints from my neighbors

      We make laws in part to stop people from having to knock on people like you (let's call them "assholes") door at all hours to complain about stuff. "I just parked in their driveway, and they didn't complain." or, more politically, "I just grabbed her by the pussy".

      Zoning laws are your neighbors registering issues. Passing laws is your neighbors registering issues.

      justification for this law is to control housing prices

      But just because you don't like the justif

  • Talking about this law, my friend said that he'll just change the wording of his listing to the effect of, "I'm renting this apartment, except for the closet. I reserve the right to enter the apartment and sleep in the closet. Please note that I have never actually done this."

    I don't know enough about the new law to know if this is a viable loophole, but I'm sure there are plenty of other good ideas.

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