Posted by Leonard Steinberg on August 20th, 2013

Have you noticed your neighbor hosting a lot of ‘guests’ at their apartment recently? They may just be running a little home-made B + B next door to you, and the hotel industry does not like the competition one bit! How dare anyone compete with their over-priced, under-sized, tacky little rat-traps? Each week, the Mayor ‘s Office of Special Enforcement receives about 10 complaints about residential apartments that are being rented out to tourists for overnight stays (which is illegal in New York but one of the hardest laws to enforce).

While thousands of New Yorkers advertise their apartments on Airbnb and other similar sites as an alternative to pricey hotel rooms, some of their neighbors are complaining about the strangers filing into their buildings on a nightly basis. Government agencies are looking at new ways to regulate this shadow industry, while hoteliers are mapping out strategies to punch back at what they see as unfair competition. Is the ‘sharing economy’ under attack? One involved a tenant who was fined $2,400 by a court for renting out his East Village apartment; another case highlighted the effort of landlord Ken Podziba to evict a tenant in his building who reportedly made $500,000 over four years running a business renting her apartment to tourists.

I doubt this ‘sharing economy’ impacts quality high end hotels much, but I could see it affecting the business of those smaller cheap hotels….that aren’t really that cheap at all. Many of those ‘cheap’ hotels are in fact ridiculously over-priced when you evaluate the square footage they provide, the quality of services and their location. I always shudder when I see those poor tourists arriving at the ‘hotel’ next door to my apartment…..its more of a hostel than a B+B. A dirty one at that. The whole experience must be truly awful for those hapless tourists, as you may witness in one of the comments posted on TRIPADVISOR: “This Hostel was without doubt, the worst I have ever stayed in. The atmosphere was really creepy and conditions were absolutely filthy, toilets on two of the three floors didn’t work, taps didn’t work and the bathrooms were grimey and literally had dirt covered spiderwebs in the corner!” If the hotel industry is to be taken seriously, they should focus on their members quality standards as a priority. Good buildings will have house rules in place to prevent short term sub-leasing. I do understand the point of quality hotels that rent rooms at a fair price:  they must view this shared economy the same way a food retailer views the food truck in front of their costly retail space that comes with a list of governmental fees and rules: is this about fairness? What is so fair about one group operating a business with a fraction of the restraints and costs than another, thereby giving it an unfair advantage?

Airbnb fought the law 3 years ago and is lobbying for new legislation that allows people to rent their apartments as hotels if they pay hotel occupancy taxes and make safety modifications to their apartments like adding smoke detectors among other stipulations. Airbnb says that 87% of its hosts are renting out their primary residence for less than four weeks a year and that many of them are home during the rental, according to a survey the company asked its hosts to complete. Surely that should be allowed? Frankly, I wish my house guests would pay when they come to stay…..maybe they’d stay a little less!