New York homeowners barred from renting to tourists

NYC skylineNew York Governor David Paterson signed it. The new law, which I alerted you to last month, bans homeowners and apartment holders from renting their homes to tourists. The law, which Mayor Michael Bloomberg pushed for, claiming it would protect vacationers from "unsafe conditions", will affect personal pocketbooks: It will make New York City's hotels, where rooms are routinely $350 a night, nearly the only game in town.

There are solid arguments on both sides of the issue. Housing advocates are rightly upset that some unscrupulous landlords have been forcing legitimate renters out in favor of the more lucrative tourist trade. In fact, a building that I once lived in was largely and unfairly converted to that under-the-table trade.

But instead of crafting a law that cracked down on that practice, the politicians in Albany simply banned by-owner rentals to tourists completely. It's the way of the lazy politician: Rather than repair the plumbing, simply rip it out.

Although the politicians have consistently stoked fear, framing the matter as one of protection for consumers and renters alike, some small-time New York City accommodations providers have claimed the city is deliberately targeting mom-and-pop properties. One hostel owner went so far as to allege the changes are part of a clandestine campaign orchestrated by the hotels lobby.

Whether or not that's true, the hotel industry is the clear winner. Budget travelers have lost an important option for legitimate money-saving accommodations in one of our country's most expensive cities.

Individual property rights have also received a blow. Homeowners have lost the right to use their property as they see fit, and with this revision of classic rights goes an age-old option for extra income. The only exemption is for people who still live in their apartments while renting extra space -- in other words, a B&B, with minimal privacy.

The law takes effect on May 1, 2011, in time for the summer vacation season.

There is a way around the law: You can stay for at least 30 days. It won't be long before tourists figure out that all you have to do is sign a lease that claims to be for 30 days on paper, but is actually only used for the duration of their vacations.

If anything, Albany has succeeded in driving the itinerant hotel trade further underground, leaving fewer protections than ever for the budget traveler. A true black market has been created.

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