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Proposed Bill Threatens Innovation in New York

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  • Posted on: Jun 29 2018

Traveling is an amazing way to see the world. New York is an amazing place in the world to see. As the global capital of fashion, art, finance, and more, it comes as no surprise that tourism has always accounted for a large amount of the state’s revenue. Individuals travel from all over the world to see the many things that New York has to offer. With all of the opportunity in New York and the amount of business conducted within the state, New York has become the second largest hub for technology in the country. That’s why a new proposed bill appears to threaten that very status as an industry leader and innovator.

Recently, members of the City’s Council have proposed a bill that stands to threaten New York’s economy by passing legislation that would punish and restrict technology home sharing platforms, such as Airbnb. The proposal would serve to regulate short-term rentals, with the potential to jeopardize the economic contribution of home sharing. As of now, a majority of City Council members support the bill, making it most likely to pass.

The Purpose of the Bill

The purpose of the bill is to crack down on illegal shadow hotels, rentals scheduled for under 30 days where the homeowner isn’t present. The concern is that these situations, if not regulated, would make housing more expensive, pushing out lower-income tenants.

Abuse of the system has been experienced by certain rent-stabilized tenants, with prostitution rings and illegal sex clubs using the rentals for their own illegal purposes. The bill would require Airbnb to submit the names and addresses of its hosts or otherwise face a hefty fine.

Airbnb, an app (and website) that allows for individuals to rent out the homes of others, acts to serve as a reliable source for supplemental income for the owners of those properties. These rentals also serve to help travelers and tourists save money while also immersing themselves in the city’s neighborhoods and culture, further adding to the local economy.

The Downside of its Potential Passing

The technology industry in New York City already accounts for more than 326,000 jobs, with the opportunity to only continue growing. However, if new legislation, such as the proposed bill, is implemented, growth within the industry is not a guarantee.

Airbnb is in support of legislation that would safely regulate hosts to register with the state, limiting them to one property per state, and remitting taxes to the state. Although there is a concern that individuals may extort the opportunity to host their homes by instead of operating illegal hotels and other properties, the bill fails to differentiate between the two.

What Might This Mean?

Unlike New York, Connecticut, Vermont, and Pennsylvania have figured out a solution to this potential issue without compromising the ability of these housing technology companies to contribute to the economy in a safe way. These states have extended state taxes to home sharing.

However, Council Speaker, Corey Johnson, contends that the bill would not be used as an abuse of power. “We’re not going to use it to go after every person. It’s to know if there are bad actors that are operating outside of the legitimate framework that’s in place.”

 

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