An Annoying Law

Arnold Kling

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In New York:

This month, thousands of New Yorkers will hand over their apartment keys to strangers, making a few extra bucks by renting out their homes when they head out of town.

But they might not know they're actually breaking a city law. A law that went into effect this past May bans renting out apartments for fewer than 30 days.

The law was created to target residential buildings illegally converted into makeshift hotels, but still applies to those who rent out their room for a night or two on popular sites like Airbnb.com.

Presumably, the point is to protect hotels and hotel tax revenue.

We were in New York this weekend, and we took an architectural tour of some recent skyscrapers. The tour guide said that the way to get rich is to be a zoning lawyer. He also said that a lot of zoning issues end up being resolved politically, that is by developers buying off politicians.

The result is to make real estate in New York a field for crony capitalism. And it is not surprising that any attempt by anyone to try genuine capitalism is likely to run afoul of the law.

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CATEGORIES: Public Choice Theory

COMMENTS (6 to date)

Latest Comment

Qgambit writes:

He also said that a lot of zoning issues end up being resolved politically, that is by developers buying off politicians.

Thats pretty much how zoning works everywhere else too.

Posted December 13, 2011 6:06 PM

Wlado writes:

No end to the new laws; no end to the creative resolutions.

Posted December 13, 2011 7:57 PM

Becky Hargrove writes:

Looks like we need our charter cities right here, where zoning can be determined by the increasingly scarce species of democracy.

Posted December 13, 2011 7:57 PM

Joe Marier writes:

The law is reasonable. Apartments and townhomes involve sharing walls. The "freedom" to run a hostel out of your apartment means forcing someone else to share a wall with a hostel.

Posted December 13, 2011 8:28 PM

hanmeng writes:

Rather than "a field for crony capitalism", perhaps a haven or playground.

Posted December 13, 2011 11:58 PM

Thomas Boyle writes:

Joe Marier,

There are already plenty of remedies for rowdy neighbors, whether they are temporary or permanent residents of the apartment.

And if the neighbors aren't rowdy, who cares that they're in residence for less than 30 days?

This law simply seeks to transfer wealth from ordinary New Yorkers to the politically powerful.

Oh, there's a surprise.

Posted December 14, 2011 8:07 AM

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