Ask the average American today what their greatest asset is and he or she will give you an answer that is 180 degrees wrong.
Even after the largest economic failure in living memory, which was predicated by the collapse of housing prices, most Americans will tell you that their major asset is their home.
This wrong answer shows how most people fail to appreciate how expensive it is to own and maintain a home. To own a home, each citizen must pay real estate taxes, pay for repairs and maintenance and pay for home insurance. Many people also pay a mortgage. These are significant, nontrivial costs. Thus, since there is a steady outbound set of cash flows associated with housing, a dwelling is, by definition, a liability — not an asset.
Now, I know that the housing crisis is over and that home prices are rising. Indeed, the North Fork has seen a doubling of prices. Houses in my village of Greenport move off the market at a rapid rate. Still, whoever owns the dwelling is saddled with a list of ever-escalating expenses. It has always been this way and it always will.
The easiest method for a dwelling to move out of the liability column and into the asset column is when the owner of the dwelling makes income from renting all or part of the house. I think it is a wonderful thing for my neighbors to put some cash in their pockets. If you search for Airbnb in Greenport, the entire village grid lights up. Good for those people. It’s comforting to know they are making a few extra dollars from their homes and can afford to pay for repairs, paint, landscaping, taxes, insurance and all the other things that make a neighborhood viable and thriving.
My grandparents emigrated from West Prussia in the 1890s, met and married in Buffalo and started a family. My grandfather worked in a tanning factory his entire life — hard, debilitating work, but he was happy to be in America, where he could speak his own language and not have to serve in the Kaiser’s army. My grandmother fermented her own sauerkraut, smoked sausage and did all the home chores while raising 10, yes 10, children. How did they own a home and raise two basketball teams on the wages of a factory worker? They always took in boarders. A century before Airbnb, they rented out rooms to offset the cost of housing.
I clearly recall as a young man dreaming of renting a garage apartment in a nice neighborhood as opposed to the sheetrock apartment complex villas where I lived. Rooms in good neighborhoods have a high market value, as rentals and owners need that extra income.
Most American homes are much larger than the occupants need. So renting out a room or two during the peak summer months, when New Yorkers (and Brooklynites in Greenport’s case), need an escape from their stifling environment is reasonable and efficient.
Of course, there are valid objections to my point of view. Obviously I may be in the minority, as the Town of Southold has enacted a two-week rental minimum and Greenport is contemplating an even longer one-month minimal rental law. I ask the elected officials to tread lightly on the one major method homeowners have to offset the taxes we all know those same elected officials plan to raise.
One objection to allowing Airbnb rentals is not that they devalue property values. Adding positive cash flow to a housing unit will increase its value in the marketplace. The most valid objection is the vague “quality of life” concerns that many citizens voice. They claim parties erupt in short-term rental units. Well, if I or one of my neighbors has a late-running party, the police will be summoned and the noise will abate. Making noise is a violation in and of itself, whether by the home owner or a renter, that can easily be remedied.
The concern that “the neighborhood will change” is an argument. However, what the character of a neighborhood is can be very subjective. All things change. The North Fork is trending toward our southside neighbors. Greenport is getting Sag-like and Southold and Southampton are becoming, like their spelling, more similar by the year. While these trends are real, their impact is so subjective that it difficult to quantify — and much more difficult to legislate.
Selective enforcement of existing statutes is rampant in Greenport and I suspect the same is true in Southold, although I only pass through there when going to the dump or NYC. There is a modern tendency toward noisy crowds at Town Hall-cowing officials. Some people have laws enforced and other laws, like I was recently told by several village officials, are enforced depending on who sits in the mayor’s throne. Selective enforcement is a type of anarchy that leaves law-abiding citizens stewing. I will state that if short-term rental laws are enacted, they will be irregularly enforced, just as our existing rental laws have been ignored.
If noise is the problem, attack it with existing laws. But let people put a few dollars in their pockets so they can pay all the expensive bills associated with the American dream of home ownership.
Mr. Osinski, a former Village Trustee, is the author of the Intex Structuring Tool, mortgage securitization software. He is also a co-owner of Widows Hole Oysters and president of the Long Island Oyster Growers Association.