So basically, she's admitting that the property is more valuable than its current use, and the city is actively denying itself tax revenue because of it.
Sometimes a short term gain in capital doesn't result in a long term social benefit. Of course people on vacation will spend more for a few days than a resident will for rent. But if that grows unchecked, the city will begin to lose its residents. Which additionally will result in a decline in income taxes, so it may even result in a decline in tax revene.
And if the city loses residents, then it can't support its tourism industry as well, and then it become less of an attractive tourist destination. This really seems like a self correcting problem.
Virtually all problems of civilization are "self-correcting" in one fashion or other.
But that doesn't mean that the residents of a city are obligated to just sit around until a problem, say gang violence or murder-for-hire, corrects itself. "Society" is about taking action to, uh, "proactively" correct these things.
That correction cycle could take decades, and some neighborhoods could be altered dramatically in the process. It really doesn't affect me at all either way, but I can acknowledge that some people have concerns, or at least a legitimate interest in managing probable outcomes.
It isn't necessarily the case. When individuals optimize their outcomes, they often make decisions that are not optimal from the whole group perspective. In such cases regulations are necessarily to achieve optimal global solution.
Some would say the purpose of government is to provide the services the voters voted for it to provide at as low a cost as reasonably possible - rather than to maximise tax revenue.
There are many things that would increase short term government revenue but which would be terrible public policy.
If the AirBnb rentals complied with hotel regulations you would have a point, but it's not an apples to apples comparison. Renters/owners like to take advantage of the fact that by not being in compliance with hotel laws they can undercut hotel prices and make an illegal profit. That's not the same as what the underlying property value is if you comply with regulations.
Investors in NYC given the choice of building hotels, office buildings, or residential properties are generally building residential properties. In fact a lot of the rezoning has been turning commercial space into residential space over the last 5-10 years. The market is clearly demanding residential space (specifically luxury units) first and foremost.
I think she's taking the position that there's inherent value in providing affordable residential property in New York which exceeds the value in extracting maximum tax revenue from every square inch of the city. At the very least, I find that to be a defensible position.
@moron4hire: It's a good point. But there are side effects of reducing residential property. What happens to the city's economy when everyone's commute is doubled because housing in the city is becoming prohibitively expensive as supply shrinks? Without zoning laws, how do you attract people to move to your city when there's no guarantee their apartment building will still be an apartment building once the lease is up?
To answer the question, I think it's the city government's job to balance the interests of people and businesses that reside in the city. In a perfect world, every side effect and externality would be neatly quantifiable, and municipal leadership would be fair and evenhanded. For now, we have to trust that the feedback loop of election will produce pretty good solutions to problems. I can't think of a better way to approach things in the current system.
Yeah, I get that, but it seems pretty tenuous. All this talk about the "value" of the property with regards to it being used for one thing over another, when price is the way in which we quantify value.
Who gets to decide what the value of a piece of property to The People should be? Should it be elected officials, who probably only represent the interests of the people on even numbered days, or should it be The People themselves, through price movement?
It's a common belief - especially on the internet - that whatever the unfettered free market decides (or would decide) is good and correct. You may believe this, and you may even take it as axiomatic, but you should be aware that very many people disagree, and will reject any argument with this as its foundation.
I forgot to clarify the opposing view. Some people see or foresee a negative outcome of an unfettered market, and want to take steps to prevent it. Then they pass laws or regulations, like hotel zoning. They see the improvement as justification for the burden placed on the market. There are so many of these baked into society that you probably don't notice them. Minimum wage laws, overtime laws, vehicle safety laws, workplace safety laws, noise ordinances, etc.