Sunday, July 22, 2012

Wall Street Journal Reports Financial Losses to New York City due to Vacation Rental Ban

CBS and the Wall Street Journal report that "New York City may be losing as much as $155 million annually in tourist business because of new restrictions on short-term rentals", according to statements by the Committee for Short Term Rental reform.

The group says a new law has been too broad, and legitimate vacation rental operations have been banned as a result. They point to the amount of money brought into London for the Olympics and money brought into Sarasota during racing season as examples of what could be happening for NYC.

The Committee for Short-Term Rental Reform is a coalition of elected officials, business owners, community leaders and hospitality professionals who have come together to call for responsible regulation of New York’s short-term vacation rental market.

In 2010, Albany passed legislation that was designed to eradicate an underground rental industry of overcrowded SROs, illegal hotels and internet scams. However, the legislation was written so broadly that it effectively made vacation rentals illegal for legitimate owners, renters and brokers that were providing short-term vacation rentals to tourists throughout New York City. 

These local residents, small business owners and hospitality professionals pay occupancy and sales taxes, and serve an important and growing piece of the NYC tourism industry, as affordable accommodations are provided to families with small children, relatives of residents living in underserved areas of the City, and tourists looking for the cost saving ability to cook for themselves in their own kitchen.

The Committee for Short-Term Rental Reform is calling for passage of a bill would seek a carve-out for vacation rentals from the 2010 legislation. The bill would insert a definition of “short-term rental unit” and include further restrictions on the number of permissible units from the “permanent occupancy” requirements passed in 2010 that would be included in the registration process. In order to qualify as a legitimate short-term rental, the unit must abide by a strict set of requirements that would protect New York City housing stock and tenants rights.

Short-term rental reform will boost tourism, inject millions into New York’s economy and create jobs. As the state recovers and Governor Andrew Cuomo declares New York “Open for Business,” improving the economy and creating jobs is the first priority for Albany. Between tax revenue, income tax and spending by new tourists, it is estimated that this bill would bring in upwards of $155 million annually for the state’s economy.

Consumers deserve an affordable alternative when deciding where they stay in New York City. Very few New Yorkers can afford to stay in a Manhattan hotel for more than a weekend. Offering consumers a choice for short-term lodging is not only sensible for the tourism industry, it’s also the only responsible option to protect consumer rights.

The state has an obligation to regulate this industry and protect consumers. Current law has been ineffective, creating a “Wild West” black market when it comes to short-term rental in NYC. Hospitality professionals understand better than most that by calling for self-regulation, the industry is putting their responsibility to their customers first.

This amending legislation regulates the short-term rental market, while protecting New York’s affordable housing stock and tenants rights. The spirit of the 2010 law is being upheld with this amending legislation, which is designed to allow the responsible business owners to thrive while protecting tenants rights with strict short-term rental regulations and protecting New York’s affordable housing stock by restricting the amount market of short-term rental locations.

More on the Committee
Wall Street Journal Article

Doug Coates

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