By Kevin Glass  /   November 7, 2016  / from WatchDog.org

New York City has been fighting a war against the sharing economy for years, and the anti-innovation forces scored a big victory last month when Democratic Gov. Andrew Cuomo signed legislation that outlaws the advertisement of short-term rental properties.

Previously, it had been illegal to rent — but not to advertise — such properties, a loophole that helped many participants in the sharing economy skirt the law. Adding another layer of regulation — with stiff penalties for violations — will likely decimate the market.

The new law imposes hefty fines: a minimum of $1,000, up to $7,500 for multiple offenses.

Courtesy of Flickr user Pietra and Silva

HOTEL OR NOTHING: New York’s new law aims at outlawing homesharing, but might run afoul of the First Amendment.

The new prohibitions were a huge victory for the hotels, labor unions, Democrats and housing activists who were pushing for the measure. LaSalle Hotel CEO Michael Bernello told investors on-the-record that the legislation was “a big boost in the arm for the business,” according to Fortune Magazine. The hotel industry – both its executives and labor unions – has long been worried about how Airbnb and other homesharing and rental services cut into their business.

Homesharing services “compromise efforts to maintain and promote affordable housing by allowing those units to be used as unregulated hotels,” a spokesman for Cuomo said, according to the New York Post.

The new restrictions apply only to those who engage in homesharing for their entire units, however. It will still be legal to advertise short-term rentals of single or multiple bedrooms.

Gig economy advocates are crying foul, not just on the principle but on the law.

“Section 230 of the Communications Decency Act of 1996,” said Berin Szoka, president of TechFreedom, “bars states from doing precisely this: making online platforms responsible for the speech of their users. That safe harbor has been vital for the development of Internet services.”

The law also presents free speech concerns.

“New York will also likely lose on First Amendment grounds,” TechFreedom legal fellow Ashkhen Kazaryan said. “It’s not clear, but New York may to be trying to evade First Amendment scrutiny simply by criminalizing sharing your own home, as other jurisdictions have.”

New York’s challenge to the sharing economy and its broader battle to regulate what people can do with their private property have reached new lows with the ban on short-term rental advertising.

New Yorkers are not allowed to rent out their own property as they see fit. The cartel-like alliance of hotels and service employee unions has triumphed over property rights and innovation.

The overreach may yet prove a bridge too far as the legislation is challenged in court, but for now the nannies have scored a win.