Technology has revolutionized the way we live. We order rides on Uber, rent cars through Turo, and stay at a person’s home though AirBnB rentals. The rise of the sharing economy pervades every sector of the economy, and our lives, with the idea that we can “share” our possessions – homes, cars, time – and rent them.
Sometimes its cheaper for the individual, but not the community. Like the car share rented through Uber, Airbnb allows our neighbors a platform to rent their homes and apartments to people for short periods of time, mimicking (some say replacing) hotel rooms.
Just as with any new approach to living, driving and shopping, our old laws may not adequately address or comply with how others in that industry, or that community want to enforce those laws.
For example, in New York City, the home sharing site, with its ease of home-living convenience and lower costs, has disrupted private apartment buildings, cooperatives and homes, with strangers traipsing in and out. The City of New York claims that Airbnb will “compromise efforts to maintain and promote affordable housing by allowing those units to be used as unregulated hotels.”
Meanwhile, Gov. Cuomo and state legislators are concerned that there will be a dearth of affordable housing for low-income individuals as hosts snap up properties in an already tight market to rent out to travelers. The legal battle between Airbnb and Cuomo has been going on for years. In 2010, Cuomo outlawed short term rentals for less than thirty days. This has been difficult to enforce, and Airbnb resisted cooperating, saying that it cracked down on illegal commercial operations of hotels without licenses. In 2016, Cuomo agreed to not prosecute Airbnb for short-term listings, instead telling Airbnb to crack down more thoroughly on offenders. Airbnb has greeted the news warmly, saying it will restart positive relations with the State of New York.
In New York, furious federal litigation and state law making has lead to regulation and court battles. For example, Gov. Andrew Cuomo, to much fanfare from the hotel industry, signed a bill putting harsh fines on violations of local housing ordinances. Hosts can now be fined up to $7,500 for listing properties on Airbnb for short-term rentals if the host isn’t present. In response, Airbnb filed a lawsuit claiming this law causes “irreparable harm” to residents, although such a law definitely hurts the company which makes a billion dollars a year from New York City in rentals.
Airbnb argues that federal law protects sites from what users post, but this argument did not hold up in court in San Francisco. The new law causes a massive headache for Airbnb, since it would have to closely review each listing on its site; this would steeply increase its compliance and personnel costs as well as hamper the ease it claims it gives hosts to rent out their properties. Similar struggles abound in Barcelona, Berlin and Amsterdam.
Closer to home, the community of Sleepy Hollow, New York, (formerly North Tarrytown) in Westchester County, passed legislation requiring real property owners to register for a permit if they wanted to allow boarders in local community homes. The law does not apply to “short term rentals” because it defines a “BOARDER or ROOMER as
“A person who permanently occupies a room in a dwelling unit for sleeping purposes for which he or she pays compensation to the property owner, lessee, or other tenant occupying the dwelling”
With that said, however, many communities up and down the Hudson River Valley are grappling with the right balance of boarders, short terms rentals, and single family homes. As the cost of living in our communities rises, our legislatures and planning boards are going to be faced with these struggles more regularly.
If you own a home, and are considering short term rentals, or boarders, you should stay abreast of the law in your community and hire a lawyer to review the zoning codes and laws of your village, town and state. At Klose & Associates we can advise you and help you protect yourself and your property.
At Klose & Associates, we keep you abreast of these real estate law developments and can offer you a legal advice to avoid violating all these different laws and ordinances and make sure your property transactions go smoothly. Give us a call, even with your small questions.