How to Impoverish Americans: The Case of New York and Airbnb

It’s easy. Just prevent voluntary transactions and restrict property rights.

The Story

Last week, the New York state legislature ratcheted up its war on Airbnb, the popular room-sharing service. Previously, New York had already made it illegal for users to rent out their units for less than 30 days unless they were present. This meant that, legally, people could only rent out rooms in their residence, not rent out the entire place.

Now, they’ve gone one step further. That arrangement is still illegal, and now it’s illegal to advertise it as well.

Over at Sovereign Man, Simon Black has a few words to offer on this new development. His write-up includes an appropriate level of outrage and contempt, even if the title is possibly a bit over the top. I think you’ll like it:

Pre-crime returns to America with new Airbnb law

Why This Matters

The question at hand in this story is no less than whether property rights exist in New York or not. The government of New York is clearly determined to answer that question in the negative.

If property rights exist, then a property owner should have the right to let anyone use their property on whatever terms are mutually agreeable.

Perhaps an old friend wants to come by and crash on your couch. That should be legal.

Perhaps you’re ready to have your significant other move in (but you aren’t positive they like you enough to pay rent). So you invite them to live with you for free. Great! That should be legal.

Or perhaps you have enough faith in humanity that you’d trust a complete stranger to stay in your house without you around–for a small fee of course. As long as you’re fine with it, that should be legal too.

But like most governments, it turns out that New York knows what’s in your best interests better than you do. So that last scenario is illegal.

In the process, the government impoverishes property owners by denying them an opportunity to earn additional income. It also deters would-be travelers because, all things equal, the new regulation will restrict the supply of lodging options in the city and thereby drive up prices. This in turn is likely to have an adverse effect on anyone who works in New York City’s tourism industry.

But of course, one group who does stand to benefit somewhat from this arrangement. And that’s the hotel companies who are unable or unwilling to compete with the often lower price point offered by Airbnb. As the old saying goes, “If you can’t beat them, lobby the legislature to make their business model illegal.”

Or something like that.