At Reason (“Did NYC Just Kneecap Airbnb?”), Liz Wolfe seems to be diversifying beyond her normal focus on tech platform apologetics and crowding onto the turf of resident landlord whisperer Christian Britschgi. I confess my first reading of the title brought a smile to my face — probably not the effect Wolfe intended — as I contemplated the use of “kneecapping” in conjunction with Airbnb.
There are a lot of errors in the article, but overshadowing any of that is the sheer dishonesty of it. Throughout the article, Wolfe quotes only one person — a homeowner who’s apparently renting out the other half of a restored duplex he lives in — as the spokesman for negatively affected parties. Julian Ehrhardt is associated with a group called RHOAR (Restore Homeowner Autonomy & Rights), which Wolfe describes as “grassroots.” Ehrhardt repeatedly refers to the law as a violation, specifically, of homeowners’ property rights, and bristles at its advocates who “[label] us as wealthy landlords.” And of course, he adds the perfect touch of right-wing populism by singling out the unions, those perennial villains at Reason, for blame.
The only hint in the article that someone’s interests might be affected other than those of “homeowners” — say, real estate holding companies or landlords who own multiple apartment complexes — comes in Wolfe’s passing reference to her visiting relatives who sometimes stay in an Airbnb townhouse rental. Aside from that, the entire narrative is “pointy-headed socialist bureaucrats vs. poor Aunt Millie who’s renting her spare room.”
Framing the primary group affected as “homeowners” — and not absentee owners mass-converting family dwelling units into short-term rentals and causing a housing shortage in order to rent-gouge — is fundamentally dishonest.
The law, Wolfe says, “dictates that hosts ‘maintain a common household’ with guests.” So in other words, it requires that Airbnb actually be what it started out as in 2007, when its name re-elected the two founders’ vision of literally building a bed and breakfast operation around an air mattress in their living room — and not a way for large-scale absentee landlords to evict tenants and convert their apartments and rent houses into short-term rentals.
To be fair, the legislation really does appear to have unintended consequences, in terms of the size of operations affected — according to Wolfe’s article, anyway, it would prevent a family renting out their apartment while they’re on vacation, or somebody living in one half of a duplex and renting out the other. And RHOAR seems to be comparatively legit, with a majority of its membership being owners of “two-family homes” (i.e. duplexes); its primary policy goal is “to exempt owner occupied one- and two-family homes” from the law.
But presenting the primary targets of the law as people with mother-in-law cottages or efficiency apartments over their garage is flat-out misleading. In terms of sheer disingenuousness, it’s comparable to the post-WWII propaganda film shorts by the National Association of Manufacturers and other industry groups, in which “our free enterprise system” was personified by pops the friendly neighborhood druggist explaining capitalism to a couple of teenagers at the soda fountain, or some likeable little guy “starting his own business” or tinkering around with some new gadget. Friendly Pops the corner druggist stands in exactly the same relation to the giant industrial corporations funding post-war capitalist propaganda that Ehrhardt’s poor “homeowners” do to the main villains in the New York real estate market: private equity and other institutional investors buying up residential housing units by the thousand in order to hire them out through Airbnb, and thus constricting the supply of housing and driving up rents.
This is not a positive endorsement of the law, although it’s important to understand that we’re comparing the new law to a status quo that’s every bit as much a product of the state and its laws. So the true question is whether the law is a net increase or decrease in statism compared to the state of affairs it’s replacing. As an anarchist, if I lived in New York I would probably view the law — unintended consequences to Aunt Millie aside — as a net reduction in statism, insofar as it limits the ways landlords’ state-granted privilege can be abused. The primary vector of statism is landlordism itself; the law in question is a secondary constraint on the worst abuses of landlordism (for my distinction between primary and secondary state interventions — the latter being formal but not substantive statism — see my article “Formal vs. Substantive Statism: A Matter of Context”).
Not that this is an optimal solution. It basically amounts to the state acting to ameliorate the harm caused by abuses of its own previous enforcement of privilege, in the interests of the long-term stability of the system. What’s ultimately needed is to attack the problem at its root — landlordism.
But city officials are biting the hands that feed: both the tourists who help power the economy — whether residents like it or not — and the taxpaying landlords who provide housing options to willing buyers at rates all parties accept.
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All this aside, even if short-term rentals were squarely to blame for a housing supply crunch, infringing on the rights of property owners is a terrible precedent to set.
All we need to complete the picture is a dismayed figure labelled “Taxpaying Landlords” and a weeping Statue of Liberty, and this could be a Kelly cartoon at The Onion.
As for “provide housing options to willing buyers at rates all parties accept,” the phrase is meaningless. By definition, if the structural rules of a given system empower particular classes or institutions to provide a service, then those particular actors do in fact “provide” it. And any number of different systems of property rules and institutional arrangements for organizing production are compatible with the existence of a market price system, with wide variation in the market-clearing prices that would result. If buying and selling are permitted at all, and market-clearing prices are allowed to be established, then by definition all buyers are willing and all rates are at least formally accepted by all parties in any system — regardless of the particular society’s property rules or the institutional arrangements governing who is permitted to offer a given good or service for sale. The U.S. Postal Service has a legal monopoly on the delivery of first-class mail — an arrangement that causes no end of outrage among libertarians — and yet, by the same standard Wolfe uses to defend landlords, everyone who buys stamps does so “willingly” and at rates they “accept.”
Wolfe’s comments here are a textbook illustration of the central theme in pro-capitalist apologetics and orthodox capitalist economics: concealing power relations behind a facade of “voluntary exchange.”
In fact, the “rights of property owners” — or the concept of “property” itself — is the problem. And in its origins, the modern capitalist form of property is as far from “voluntary” as anything can be.
For most of history since the Agricultural Revolution, and in most parts of the world, the predominant model of land ownership has been some sort of communal tenure, with eminent title ultimately vested in the village collective, extended family, clan, or some other collective entity. The open field system of medieval Western Europe, the Russian Mir, what Marx called the “Asiatic mode” in India, the Jubilee system in pre-state Israel…. These, and other variations on them, were typical of most of the world for most of human history since the rise of agriculture.
They were brought to an end, not by any mythical Lockean “peaceful appropriation from the common through individual homesteading,” but by sheer, brutal violence. The modern capitalist model of “private property” in land — alienable, fee-simple, commodity ownership — was a creature of the modern capitalist state in alliance with the landed classes. With the help of the modern state, feudal landlords transformed their “property right” from one defined by custom and limited to specified and often nominal rents, to an absolute property right in the modern sense; the peasantry, as a result, were stripped of their own customary heritable rights of possession and legally defined rents, and transformed into tenants at will. In other words, the “property rights” Wolfe pronounces with the same reverence as “Randolph Scott” in Blazing Saddles are nothing but the legacy effect of robbery.
And transforming land into an alienable and marketable fictitious commodity (Karl Polanyi’s term) inevitably results in its concentration into a few hands as the source of unearned income by its owners. And land rent was the original, paradigmatic form of economic rent — a return over and above what would have been required to bring a commodity to market, resulting from economic power. As David Ricardo and Henry George pointed out, the rent on land itself reflects the need of society — the surrounding population bidding up the price of a fixed supply of locations — rather than the actual value of any buildings and improvements by the landlord.
Wolfe’s range of solutions to the affordable housing issue is limited entirely to the YIMBY panacea.
Supporters of Local Law 18 claim short-term rentals are to blame for New York’s housing affordability issues. The far greater problem is how difficult it is to build new housing stock in a city that heaps on onerous permitting restrictions and has for too long allowed lots of “not in my backyard” (NIMBY) veto power. In fact, New York is far less dense with Airbnbs than other cities, points out the Cato Institute’s Scott Lincicome. And cities need all different types of housing configurations at all different prices in all different neighborhoods, not controlled by central planners, but subject to the changing needs of market participants.
Not that I’m opposed to YIMBYism as such. Zoning restrictions on dense housing certainly contribute to the problem. But housing construction, independent of ownership issues, is by no means a Rosetta Stone for addressing the problem. The heart of the problem is landlordism itself, and the modern capitalist model of “private property” in land.
Ultimately, the only real solution to the affordable housing problem is to replace the modern capitalist model of private property in land with a restored commons-based ownership. The range of possible methods includes everything from community land trusts, to tenant unions and rent strikes, to squats. And so long as governments and taxation exist, we can push to make them less extractive and authoritarian by shifting taxes off of buildings and improvements and entirely on the unearned rental value of land, as well as by ceasing or deprioritizing the eviction of squatters on vacant or foreclosed properties.
What Liz Wolfe calls “private property” is just another form of authoritarian statism, and landlords are nothing but states in miniature.