New York State & Airbnb

Did you ever see the 2002 movie Minority Report with Tom Cruise? It is a great film with a brilliant premise which is that  it is better to stop a crime before it ever happens. Tom Cruise plays a police officer in a unit called “The Pre-Crime Task Force.”  With the aid of super psychics, they use their abilities to stop crimes just prior to their commission.

precrime

Once notified by the psychics, the police officers arrest the perpetrators before the crime is committed and incarcerate the “criminals”  before they can take action. So, even though they’ve committed no actual crimes, they are still sent to prison.

The “intent” was all that mattered.

Although it’s a science fiction movie and takes place in the “future” you’re left with the impression that the idea is far fetched and could never happen. That is….until now.

Just last week Andrew Cuomo, Governor of New York State, signed a bill making it illegal to advertise your home for short-term rentals on websites like Airbnb. So, even though you might not ever rent your space, the sheer fact of publicizing your intent to rent will run you afoul of the law. Like pre-crime, you don’t even have to rent out your unit to get into trouble.  You just need the intent. No it’s not science fiction…its New York State.

As it stands, New York already has a law on the books making it illegal to rent out your home, or rooms, to short term tenants. The state also has heavy handed condo Boards that rule and restrict New York real estate associations. Most of them have stringent measures that forbid short term rentals.

The penalties to advertise carry up to a $7500 fine. Seem egregious? Yes…when D.W.I fines in N.Y range from $500 to $5,000 dollars and reckless driving fines are only $300 dollars! These are fine for actual crimes not an intent to commit one.

The fact is, Airbnb solved a huge issue for visitors to N.Y.  New York, especially New York City, has some of the highest hotel rates in the world along with some of the highest hotel occupancy rates. It is hard to find a hotel room that rents for less than $200 a night in New York City, so cheaper alternatives were needed.

Companies such as Airbnb filled a need. It’s not like New York City isn’t benefiting. Airbnb generated over $400 million dollars for New York City property owners last year.  So, at face value, it would seem everybody would be better off by having Airbnb in New York.  Hotels still have high occupancy rates that are not being negatively effected and property owners can generate additional income while having visitors enjoy a better experience. Finally, even the politicians get their tax slice of the $400 million.

Now those benefits are gone.

The reason why Airbnb was barred was alleged to be “safety reasons.” This seems always to be the justification of every action the government takes.  The statement read, “The government must ensure that all buildings comply with fire, building and other safety codes relative to their class.”

Give me a break!

I lived in New York City. You can barely walk down the street without obtaining a multitude of permits. Now, all of a sudden, those rental properties built over the years somehow slipped through licensing and zoning agency purview and were built without the government’s oversight in the first place? Please.
 
State Senator Liz Krueger issued a statement in favor of the law, calling it “a huge victory for regular New Yorkers over the interests of a thirty-billion dollar corporation.” Really?  The majority of Airbnb’s profits flow to individuals. In fact, the company Airbnb has lost billions of dollars since it was founded. It has never generated a profit. The platform was designed for individual parties to benefit, not corporations. Senate Liz Kruger is a liar for saying something so blatantly false and misleading!

So this “victory” is actually one for the power brokers and against regular New Yorkers…ordinary people who use the site to generate extra income and help make ends meet. These people will now lose that needed extra income.

With stupidity like this so pervasive in government, especially in N.Y., it’s no wonder why people are leaving the state. Since the 2010 census  653,071 people have left the state. This was the largest decrease of any state, both in absolute terms and as a percentage of estimated population since the start of the decade.

The Empire State doesn’t say why residents are leaving, but we can think of several possible reasons: high taxes, high unemployment upstate, high housing costs in the city, and a large (and corrupt) bureaucracy—for starters.

Ironically, New York City already has the infrastructure within the surveillance state to “detect” pre-crime…not unlike the world which “Minority Report” portrayed.  So it should not come as a shock that in real life, and in real time, the bureaucrats and administrators are already writing laws that will allow them to impose upon New Yorkers what they obviously thought was a darn good plot.

Truly scary stuff.

Steve

sleeclark@gmail.com

Alone in New York

At various periods of my life I have lived in New York City. I both love and hate the place. Its full of energy and excitement but also filled with tension and stress. NYC is not an easy place to live. Because I have also lived in many other cities, as well as countries, I’ve developed a broad understanding of human nature. I have never seen as much loneliness in one city as I have in New York.

New York CityOn its face, NYC seems like it would be a great place to meet people and make long-lasting connections. While that is true for some people its certainly not true for all. The floor of the building in which I lived was a microcosm of the cruelty and despair that can be NYC. Over a 10 year period, I witnessed alienation and heartbreak… and from what I’ve read and heard from others, my observations were more the norm than not.

  • Donna, a retired secretary, died alone in her apartment. Her body wasn’t found for three weeks.  No one had noticed her absence until the smell from the apartment became unbearable and the police broke into it and discovered her decaying body. Her daughter lived only 20 miles away and had not been in touch with her mother for over a year.  Having no friends, no one had checked in on her to even see if she was alive.
  • Tom, a retired businessman, died in the same manner. Luckily he was found after two weeks when the delivery boy became nervous about all the papers piling up outside Tom’s door.
  •  Boots, my next door neighbor, lived in a rent-controlled unit and had used lawn furniture to decorate as she couldn’t afford  anything else. She had very little money, a terrible job and a family that lived thousands of miles away in the Philippines. She lived alone… always hoping that her fortunes would somehow take a turn for the better.
  • Clarice, the French woman whose husband had been convicted and was serving time for tax evasion, waited years for him to return from jail. When he did, he died  shortly thereafter of a heart attack. Clarice would smoke marijuana every night, crying endlessly over the years missed with her husband and the untimeliness of his death.
  • Doreen, the travel agent, did not date until she was about 50 and then got married to a divorced businessman. Prior to that time, she had spent years years living alone with few friends ever coming to visit.
  • Mike and James were a gay couple who lived down the hall. Mike was a drag queen and would have vicious, knock-down fights in the hallway every few months with Mike. Mike was in the habit of going out completely covered in winter attire even on the hottest days of summer. He died in his 40’s and the tragic loss caused James’s life to spiral out of control. He was kicked out of their apartment and never heard from again

In economics, they would call this phenomenon a “supply” problem because the supply of people being so great makes it easy to discard people for the smallest of reasons. There is always a new batch of people from which to choose. But in the end, what so many New Yorkers unwittingly do is discard all of their relationships and end up with nothing… ironically… because nothing real is valued. Many New Yorkers never even fully choose and commit because there is always someone new around the next corner and these new possibilities always seem better in anticipation than what they turn out to be… and so the pattern goes on. In contrast, people who live in smaller cities or towns where “supply” is limited tend to have greater appreciation for others and a willingness to commit to the work that any long-lasting relationship requires.

I’ve been in finance most of my adult life. What I came to realize living in NYC and elsewhere was that whether its commodities or relationships, a “glut” in the market tends to have an inverse effect upon value. Its a bad enough situation in finance. Its tragic in human interactions and may explain the alienation so many wind up feeling who flee small towns for the bright lights and glitter of the “big city.”

NYC it turns out is like having a hero. Better kept at a distance than up close and personal… where its all too easy to see the imperfections.