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Why New York’s Response to Vacation Rentals Isn’t the Right One

By Matt Barba

Industry News

Last month, New York Governor David Paterson signed legislation which will outlaw short-term apartment rentals. The law sets 30 days as the minimum stay, effectively removing vacation rentals from the table of options for tourists visiting the Big Apple. As comparable legislation is being considered or enforced in a growing number of cities across the country, including Chicago and Maui, it’s worth considering the reasoning behind such a decision–and why some people aren’t exactly welcoming the idea.

I’m generally skeptical of new legislation when it comes to real estate, not because the industry does enough of its own work to keep up with societal and technological change–it doesn’t–but rather because it too often seems to come as a response to contractions in the market, which happen regardless of which laws are on the books. So when I first read about NYC’s law, it seemed to me like a veiled attempt by the tourism establishment–i.e., hotels–to protect their flagging revenues from up-and-coming alternative lodging options, like vacation rentals and home exchange programs.

But there are several legitimate efforts in the law to protect unsuspecting tourists from arrangements that are genuinely dangerous. Especially in New York City, where housing is almost always at a shortage, landlords are notorious for cutting corners by putting up illegal walls and renting lofts in properties not zoned for residential use, posing health and fire hazards. In addition, though hotels are expensive, they are required by law to maintain sanitary facilities and hire security personnel–things tourists need in a large city, but short term rental landlords are unlikely to offer. As for the tourists themselves, they are likely to be suckered into these places because A) they are by definition unfamiliar with the city they’re visiting, and B) their options for finding a vacation rental (e.g. sites like Craigslist) don’t exactly make it easy to sniff out scams. It’s also worth noting that the properties that are perhaps most at risk of being snatched up for short term rentals are single room occupancy buildings, which should be reserved for New York residents with a legitimate need for such affordable housing options.

Still, if I had to guess the real motivation driving this kind of legislation, it would be that these cities simply can’t be bothered to accommodate a different kind of travel arrangement into the Frankenstein’s monster that is urban real estate law. Instead of finding ways to assure quality control and enforce responsible offerings, they are content to write vacation rentals off completely. But it’s their loss: according to PhoCusWright, a travel research company, alternative lodging options like short term rentals account for a nearly $25 billion segment of the travel industry, and that money is coming from tourists’ desire not only to get more living space for their dollar, but also to experience the places they visit in more authentic ways. Vacation apartment rentals give visitors a chance to live in New York like a New Yorker; they provide an opportunity to buy groceries at the corner store and cook a meal, to be among (if not interact with) natives and residents in a way that hotels can’t offer, to observe the rhythms of life at ground level.

When I think back on my vacations, the ones I remember most vividly and fondly were not spent in hotels. They were spent in the little white and blue beach house at the Jersey Shore; a friend’s cramped apartment in the Trastevere neighborhood in Rome; the mountain cabin in Breckenridge, Colorado. Whether it’s a hundred miles away or a thousand, a great vacation, in a certain way, should still feel like coming home.

(image via mikeleeorg on flickr)

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