The first time I read about something like this I was outraged. "How dare they, the government is blocking people's ability to do business". Then, after some careful thought I started to agree with this ban. Basically I put myself in the shoes of a resident next to a building being used as an illegal hotel. The people do not have the proper permits. Obviously they are not licensed. The fact that there is always new people coming and going in what is supposed to be a residential area can cause problems. And I say this as a resident of NYC. Living here I never realized that it was so expensive to visit NYC. Sorry to be cynical but I guess it sucks to be you if you want to visit NYC and are broke.
Notice that the person doing this illegal business is the only one benefiting from it. The community will not get any of the taxes that it is supposed to get which are in turn used to maintain the streets, pick the trash, pay police officers patrolling the area, etc. etc. Essentially, the community is paying for an illegal business.
This is a pet peeve of mine: when arguing about whether something should be legal, its current legality is irrelevant. Pointing out how illegal, unlicensed, etc these places are does not work as an argument against legalizing them, or as an argument for making them "more illegal". Stick to the factual arguments about crime, taxes, etc, because that's what the decision should be based on.
You are missing one important point: most people affected by this ban are individuals, renting out one room at a time, maybe two. I have a hard time believing this generates any kind of noticeable "coming and going".
In fact, tolerating the rental of a single room per household strikes me as a good way of separating the wheat from the chaff.
One more thought: the state expects this to plug a leak in tax revenue. I think they are vastly underestimating the relief these rentals represented: losing that extra income might mean foreclosure for a lot of people.
Plugging a leak, really? I call it shooting the life raft.
We're still living in a world with artificially inflated housing prices. While yes, people will be foreclosed on, this is a necessity to bring the market back to reasonable levels.
If hosting tourists becomes standard practice, this will be reflected in the price of housing, and even more people will be unable to afford homes in the long run as a result.
Especially when you look at vacant spots in hotels, which were zoned and set aside for that very purpose, this creates a significant inefficiency with a lot of unoccupied (and probably mis-priced by an illusory abundance of) space in the city.
@sprout: I disagree that airbnb and ilk would increase inefficiency. In fact, it seems to me that it's hotels that bring the inefficiency into the market. They are proxies for short-term housing needs created at a time when it was difficult to arrange short-term housing in unused space in residential zones.
Imagine a world where sublets were completely unrestricted on both a governmental and leasing level. If I go on vacation, I would rent out my place. Theoretically, because my place is used 100%, the demand for these massive, overpriced hotels taking up prime real estate in our nation's cities would dwindle - and the efficiency of the city would actually improve.
Instead of locking up this prime real estate in hotels, which are seasonal and affected by economic hardship, we'd enable more people to live downtown full-time, close to their jobs - which would lower transportation costs, monthly housing costs, overnight rental costs, and in general bring efficiency to the market.
Assemblyman Richard Gottfried states in this interview that the law is designed to eliminate 'illegal hotels', where real estate companies or building owners rent out many units in a building. He says that they have never gone after people renting out their rooms, and doesn't expect that to change:
http://beta.wnyc.org/shows/bl/2010/jul/08/illegal-hotel-crac...
"Yeah, I know we just made the thing you're doing illegal, but no worries, we're not going to enforce it." doesn't reassure me much. Read the economist article posted yesterday about all the people in prison for pretty similar stuff.
I also see this as a problem though. Most likely the person doing this is not the owner of the apartment. I wonder how the original landlords feel about this. Maybe they just don't care, who knows. Seems wrong to be using their apartment for this when they never agreed to it.
I would consider the landlord's involvement in this decision to be an "abstraction violation." When I lease the apartment, I make a guarantee to return the apartment to you in the same condition that I received it (with a fine to be paid if I do not). It should be my choice whether to assume the risks of a subletter, temporary or long-term.
more to the point, nearly all residential leases explicitly prohibit subletting already, so regardless of city law, you are violating your lease by renting out an apartment on the short term without the landlord's permission.
The problem is, in NYC, you cannot sublet your apartment without notifying your landlord. They cannot, however, unreasonably deny the sublet. But you must notify them.
The landlord can probably kick them out for having extra people living there that's not on the lease or for breaking something in the lease. (My parents are also landlords, though not in NYC.)
Of the places I've been in, the landlord knew about it and didn't care (not noisy or dirty), or it wasn't active enough to cause anybody to notice.
In some cases yes but what about when my mother-in-law came to visit when my daughter was born? The nearest crappy legal hotel was 45 min away and cost $140 a night. She got a one-week sublet two blocks away (family on vacation) for a week for $500.
Regardless of the savings in money, the big difference was the proximity.
Now that will be illegal and she will either visit less often or not stay as long.
I have no idea what the breakdown of tax allocation looks like in NYC/NY state, but I'm not sure your last statement is correct. I assume the person doing this illegal business is still paying property tax and state income tax? If not, then that's a problem with the IRS, not a housing authority.
"Notice that the person doing this illegal business is the only one benefiting from it."
The landlord/property owner is still paying property taxes, and their utility bills.
Also, as a previous commenter mentioned (jim_h)...
"A tourist who stays at a hotel ($100/night) might only have budgeted $50/day to spend outside of hotel costs."
"A cheap tourist could budget $100/day, stay at a temp place and still get more out of NYC than someone who budgeted $150/day and stayed at a hotel."
But, most importantly, mrtron says...
"I would agree - the money spent on hotels probably doesn't stay as local as money spent on food and entertainment."
Also, you mentioned "what is supposed to be a residential area" - but most of NYC seems to be mixed-use zoning, where you have a commercial entity attached to a multi-family residence, or even have commercial entities at the base of the building.
Notice that the person doing this illegal business is the only one benefiting from it. The community will not get any of the taxes that it is supposed to get which are in turn used to maintain the streets, pick the trash, pay police officers patrolling the area, etc. etc. Essentially, the community is paying for an illegal business.