Innovation economy can build the middle class—if New York unleashes it Cuomo backs ride sharing upstate. How about home sharing downstate?

By Josh Meltzer

Gov. Andrew Cuomo’s budget proposal includes a new law allowing ride-sharing companies such as Uber and Lyft to operate outside of New York City. It is a welcome step forward, one that promises to provide new transportation options for millions of New Yorkers by allowing car owners to turn an asset in their driveway into money in their pocket.

As the governor said during his State of the State speech in Buffalo, “embracing the new innovation economy” is critical to building the middle class. However, he noted, existing law creates “unfair duality” between upstate and downstate, with New York City residents enjoying the benefits of on-demand transportation while the rest of the state waits for the 21st century to arrive.

In the case of ride sharing, the governor declared, “What’s good for downstate is good for upstate.” For home sharing, the reverse is true: What’s good for upstate is good for downstate.

Even though tens of thousands of people across the state are using home sharing to turn their greatest expense—their home—into an asset, Airbnb hosts in New York City are still waiting for the 21st century.

Currently a state law applying only to New York City fails to distinguish between middle-class New Yorkers who occasionally rent out their home and bad actors who remove permanent housing from the market. Worse, a law that went into effect last year threatens thousands of residents with historically high fines for simply advertising their home for short-term rentals.

There’s a better way. We at Airbnb call it Sharing for a Stronger New York. It is our vision of comprehensive reform that works for the Empire State.

At the heart of the proposal is our One Host, One Home policy, which limits New York City hosts to a single, entire home listing. Since November 2015, we have voluntarily removed more than 4,000 listings that violate this policy. Today, 96% of Airbnb hosts in the city share a single home.

As part of a recent settlement agreement with New York City, we agreed to cooperate on ways to address the city’s permanent housing shortage, including through compliance with One Host, One Home. That’s an important step, but we still need Albany to act.

State law should limit the activities of commercial actors such as illegal hotels and landlords who turn permanent housing into short-term rentals, not senior citizens on fixed incomes who rely on hosting to pay medical bills, millennials trying to pay off student debt and achieve the dream of homeownership, and families in the city’s low-income communities.

Moreover, our comprehensive reform plan would require Airbnb hosts to register to aid enforcement efforts and ensure that lodging and sales taxes are collected on short-term rentals.

That’s common sense, and it would be big money for the state—nearly $100 million in the first year alone.

The vast majority of New Yorkers recognize the difference between a middle-class family sharing their home and a landlord who evicts tenants to churn apartments as full-time short-term rentals. It is long past time for New York state law to recognize this fundamental distinction by permitting the vast majority of hosts to rent their own homes while cracking down on bad actors who threaten our communities.

A version of this article appears in the February 20, 2017, print issue of Crain’s New York Business.