I thought you were saying that this bill would raise rents, but it sounds like you actually meant that Airbnb-ing an apartment raises rents, is that right?
Isn't it more like 995k apartments for rent, and 5k hotels? The difference between 10% and 0.5% matters when you're arguing that AirBnB significantly reduces the supply of housing in NYC.
Depends how elastic the supply is. If those 1 million units, what if only 50k turn over each year? So 50k vs 55k units available could have a doubt digit influence on price.
You should't assume that airbnb conversions would turn over 20x as frequently as the existing apartments. So it wouldn't 50k vs. 55k, but 50000 vs. 50250.
Sure, there might be a big spike in supply on airbnb-banishment-day, but then those apartments get rented and we're back to approximately the place we started, as far as long-term rents go, only without airbnb the tourists and property owners are worse off.
http://www.investopedia.com/university/economics/economics3....
Say there would normally be 1 million apartments for rent.
Now AirBNB comes. Some get used as hotels. Now you have 900k apartments for rent, and 100k hotels.
The price of the apartments go up. In fact a very small change in supply could lead to a fairly massive price hike.