New York Is Too Expensive to Even Visit
The city has cracked down on hotel construction and short-term rentals, with predictable results.
Updated at 3:45 p.m. ET on November 2, 2023
Tourists are like bees: I don’t want a bunch of them circling around me, but I also don’t want them to disappear. It’s a delicate balance. Tourists stick out and may not observe local norms, which can inspire petty grumblings and genuine anger from locals. But they’re a sign that the city is doing something right. Show me a city without tourists, and I’ll show you a city in decline.
In New York, this delicate balance is tipping against tourists as hostility to outsiders becomes a matter of policy. Local Law 18, a measure adopted last January to crack down on short-term rentals, took effect in September. It requires landlords to register their short-term rental properties with the city and prohibits platforms such as Airbnb and Vrbo from processing transactions for unregistered rentals. The parameters are pretty strict, moreover: The law bans short-term dwelling units unless the permanent resident of the space is present during the rental, and it requires that the host “maintain a common household with a rentee.” In layman’s terms, that means “no locks.” Predictably, the number of short-term listings fell by more than 80 percent from August to October 1.
Fewer short-term rentals likely means higher prices for tourist accommodations. As one hotel-industry player told the real-estate publication BisNow, “The notion of Airbnb being available has definitely limited the pricing power of the hotel industry … You take that away, and there’s even less inventory. It’s going to only enhance the pricing power during high levels of occupancy.” A principal of a hotel group with 24 properties in the city also told BisNow that Local Law 18 “will absolutely increase the demand for hotel rooms.”
But those hotel rooms may be in short supply as well. In 2010, New York City banned youth hostels, closing 55 establishments across town. In 2018, the city made it harder to build hotels in areas zoned for manufacturing use. Then, in December 2021, the city council made it harder to build hotels across the city. Prior to these changes, developers could put up hotels as long as they followed existing zoning and building regulations. Now hotels must also acquire a special permit. The city’s own projections warned that the regulatory changes would leave the city with insufficient hotel capacity. They were right to worry: In the 12 months following this change, not a single special-permit application was filed.
Ostensibly, the city made these changes to make room for manufacturing jobs and out of wonky concerns about process. But reporting in The New York Times suggested that the city was doing the bidding of the hotel workers’ union, the Hotel Trades Council, which had “long pushed to limit the construction of new hotels, which are often nonunion. Its calculation [was] that limiting the development of such hotels … would tend to increase hotel room prices generally and bolster the higher-end hotels where many of its workers are employed.”
The Hotel Trades Council was also involved in the short-term-rental crackdown. An official newsletter last winter noted that “HTC’s members have been active in New York City’s fight against illegal hotels since the beginning, when their harmful impact on the hotel industry first presented itself: every stay at an illegal hotel is a guest who is not staying at a union hotel, inevitably leading to layoffs for our members.”
Local Law 18 isn’t going to eradicate tourists, of course. But these laws are buoyed by anti-tourist sentiment that imagines locals and outsiders as opponents in a zero-sum battle for space and resources. A local-news outlet attracted comments in support of Local Law 18 from New Yorkers claiming that short-term visitors are dangerous: “With the upswing in crime in the city, it is nice to know who actually lives in your building.” The hotel-union newsletter also noted that members were concerned about short-term rentals “simply as New Yorkers” due to their effect on the housing supply and on neighborhood character.
There is indeed evidence that Airbnb can reduce the supply of long-term rentals as it increases the supply of short-term rentals, which has moderate upward effects on rents in those long-term rentals. And tourists can indeed be annoying. Have you noticed the way they crowd local restaurants and take up the entire sidewalk while discussing which way to walk? They can bring more noise to quiet streets or buildings. As someone living in a small multifamily building with not one but two short-term rentals, I know that these effects are not imaginary.
Ultimately, though, locals depend on visitors, which should have become obvious during the coronavirus pandemic.
In the fall of 2020, The New York Times published an article headlined “‘If No Tourists Come, I Have No Business,’” which centered on “jarring scenes from all around the city [that] lay bare the devastating impact of the absence of tourism.” No longer could taxi drivers rely on regular tourist traffic from the airports. Restaurants bled workers as their dining rooms sat empty. Retailers shut their doors.
Locals might convince themselves that tourist-centered businesses are not important to them. What New Yorker would go to bat for the souvenir shops in Times Square or for the restaurants in Grand Central? But visitors play an important role in creating demand for goods and services, generally, and therefore in creating jobs.
In 2019, 385,000 workers got most of their income from the city’s tourism industry. These workers have a median wage of just $32,000, are young, and are disproportionately immigrants. And they don’t just work in hotels and restaurants; they are taxi drivers and cashiers, janitors and customer-service representatives, maids and housekeepers. And although locals may not care if fewer We <3 NYC shirts are sold, they may start to worry if Broadway ticket sales dwindle: In the 2018–19 season, 80 percent of patrons came from outside the five boroughs, and 62 percent came from outside the greater New York metro area.
New York is hostile not only to tourists these days but also, arguably, to outsiders in general. Mayor Eric Adams said recently that asylum seekers would “destroy” the city. That’s a remarkable claim, given that more than 36 percent of his residents are foreign-born (the national average is about 13 percent). Adams then embarked on a four-day trip to “push back on the propaganda that is giving people false hopes and false promises” of a good life in America’s largest city—a far cry from 2021, when then-candidate Adams wrote, “New York City is, and has always been, a City of immigrants. We are a destination for diversity and a place where people from every nation seek refuge, raise families, and enrich our communities. Under my administration, our government will reflect that.”
As with tourists, the city’s problems accommodating migrants are partly self-inflicted. New York City used to process up to 10,000 immigrants a day at Ellis Island alone. Now a government larger, wealthier, and with more resources is claiming that 10,000 a month is impossible to bear. The city has the capacity to welcome outsiders; what it lacks is the will to do so.
If fewer tourists come to New York, or if they have to pay more to stay in a hotel or reserve a short-term rental, that is of course in no way equivalent to what asylum seekers are facing. But opponents of migrants and opponents of tourists often sound the same: Who are these outsiders? Are they safe? Why do they have to be in MY building/neighborhood/borough? That’s because their fears spring from the same place: that any space devoted to outsiders necessarily comes at a cost to the people already living there.
It’s easy to see what outsiders take. It’s harder to see the indisputably larger benefits they provide. But you don’t get to keep the honey if you choose to get rid of the bees.
This article originally misstated that Local Law 18 was adopted in 2023.
