Travel to almost any international city, from Berlin to Lima, and chances are you can to drop your bags at a cheap hostel filled with bunk beds and Ikea furniture, hassle free.
Not so in New York City. Even one of the last standouts, the hostel (something of a flophouse, in reality), The Whitehouse Hotel on Bowery, closed “temporarily” last year and has yet to reopen. But a new bill, introduced to City Council by Margaret Chin, could allow hostels to thrive, a prospect that has major implications for how we discuss the battle between Airbnb and critics of “illegal hotels.”
The already meager hostel industry was further hampered when a 2010 law forbid short-term rentals of entire apartments for less than 30 days in residential buildings. The law aimed to guard against unlicensed hotels disrupting residential neighbors, but without separate legislation to define and protect hostels, many were classified just the same as illegal residential rentals and ushered out of business.
At the time, nobody seemed to suspect the impact Airbnb would soon have. With its sheer ease-of-use and web of hard-to-track online transactions, it more than filled the vacant hole left by hostels. Turns out, some legislators miss those hostels more than they expected.
A group of City Council Members, including the Lower East Side’s Chin, is sponsoring a bill that would define and regulate hostels (strictly defined as accommodations with “rooming unit[s] designed to provide sleeping space for not fewer than four but no more than eight individuals, with rent charged separately for each individual sleeping space” in the building code) and create an independent office for licensed hostels.
In an op-ed in Crain’s New York Business titled “Banning youth hostels was an accident that’s helped Airbnb,” Chin argued that supporting new hostels now could help put more apartments on the market for city dwellers by lowering the demand for “apartment gobbling companies like Airbnb.”
“Airbnb is taking thousands of units off the rental market” said Paul Leonard, the communications director for Chin. “What this bill would accomplish is allow for competition for space in this market, for affordable and safe accommodations, especially for global travelers.”
The move comes as Airbnb tries to play nice with the city. Earlier this week it released a compilation of anonymized data from its New York users, in the latest chapter of the company’s protracted battle to stay in business on their terms in one of their most popular markets.
Airbnb claims that short-term rentals mainly help New Yorkers subsidize the cost of their apartments by letting them lease their places when they go on vacation. Their findings say that “typical listings” earn $5,110 a year and “the vast majority of listings are shared only occasionally.”
But some lawmakers and housing groups aren’t swallowing the feel-good narrative about the benefits of a “sharing economy.” They say Airbnb continues to allow wheeler-dealers to snap up much-needed housing stock and hustle multiple apartments for outsize profits, adding to the city’s affordable housing crisis.
ShareBetter, a national coalition of elected officials and community organizations, wrote in a statement: “Analyses by independent sources have shown incontrovertibly that a growing percentage of Airbnb’s revenue comes not from mom-and-pops, but rather from sophisticated and professional illegal hotel operators.”
Indeed, it’s hard to evaluate Airbnb’s claims from the public data summary released online, which you can only fully view with an appointment at the company’s offices. The New York Times profiled a man who sneaks around the data net by enlisting friends to hold the leases and profiles of separate apartments he manages. He said flipping five apartments allows him to earn $500,000 a year, before fees. With that kind of money at stake, we can guess he’s not the only one.