Gentrification, the process of renewal and rebuilding which accompanies the migration of middle-class or affluent people into historically poor urban areas, may on its face seem beneficial for all members of a community. After all, gentrification provides numerous benefits to blighted neighborhoods – it can help stimulate economic growth, garner greater resources for public education, public safety, and other areas of public welfare through increased property taxes, and provide new job opportunities for community members. While these benefits are noteworthy, the poor and people of color rarely enjoy them.

Gentrification emphasizes the interests of the middle and upper classes—frequently at the expense of the poor and communities of color. With the renewal and rebuilding of dilapidated structures comes higher property values, large corporations and businesses that target the middle and upper classes, and highly skilled workers. The result is often the displacement of poor communities of color from the neighborhoods they have lived in their whole lives and embraced as their own. Thus, while gentrification encourages economic growth, it also results in increased homelessness among the original residents who cannot keep up with the rising property values.

In an attempt to combat the negative consequences of gentrification, many low-income residents across the country have turned to home-sharing (i.e. Airbnb) as an additional source of income. For example in recent years, low-income communities in New York City have experienced an 80% increase in home-sharing earnings, particularly in zip codes with the largest percentage of African American residents. This additional source of income is often the difference between the displacement of low-income residents and the opportunity to keep families in their cherished neighborhoods.

However, rather than recognizing the value of home-sharing (especially for communities of color), the New York Legislature recently passed a bill that essentially outlaws home-sharing for millions of New Yorkers. This bill prohibits home-sharers from advertising or renting out their homes for less than 30 days and penalizes violators with fines of up to $7,500. The New York Legislature argues that the new bill would reinforce an existing law that seeks to prevent landlords from setting up illegal hotels by removing apartments from the permanent rental market and instead promoting only full-time, short-term rentals. While the new bill could effectively mitigate the creation of illegal hotels, it is clear that it will penalize innocent home-sharers who depend on home-sharing earnings to remain in neighborhoods that they may not otherwise be able to afford.

Because home-sharing is more common in minority communities, this new bill presents an additional housing obstacle that threatens to have a greater impact on people of color. Under the pressure of hotel unions, Governor Cuomo recently signed the anti-home-sharing bill thereby ensuring that the new law will become enforceable beginning November 1, 2016. In response, Airbnb immediately filed a lawsuit to block the new law which it has called unconstitutional, and has publicly released new home-sharing rules that would limit the number of listings a person can have on its site to one, crack down on repeat violators, and push for permission to collect and remit hotel-like taxes as an alternative to the anti-home-sharing law. It is unclear whether the federal court in Manhattan will block the new law; however, if it chooses to give deference to the New York Legislature, thousands of home-sharers will lose their additional sources of income and possibly their homes. The case is Airbnb Inc. v. Schneiderman, 16-cv-08239, S.D.N.Y. and its progress can be followed here.

 

Suggested citation: Donovan Suh, New York’s Home-Sharing Law: An Obstacle To Combatting The Consequences Of Gentrification, Cornell J.L. & Pub. Pol’y, The Issue Spotter, (Feb. 1, 2017), http://jlpp.org/blogzine/new-yorks-home-sharing-law-an-obstacle-to-combatting-the-consequences-of-gentrification/.