"I have been living in this apartment for 34 years"
If she's in lower Manhattan, I'd bet almost anything her apartment is rent-stabilized (and I think she's been here long enough to even have a rent-controlled apartment, potentially, though she might have missed the cutoff by a few years).
The bulk of the legal debate around Airbnb has nothing to do with rent-regulated apartments; it's the fact that in NYC, short-term subleases are illegal, period. (Most subleases are also violations of the original lease, though that's secondary).
The bulk of the economic debate is around the practical implications. If you're a renter (not owner) in NYC and renting out your apartment on Airbnb, one of two things is happening, economically:
1) You pay sub-market rent due to rent regulations (control or stabilization), and are making money off of this disparity between your rent and market rent. You are pocketing money that, if you were in a non-regulated apartment, would go to your landlord. (And since subletting regulated apartments is illegal, he will evict you and find a tenant to pay full price[0])
2) You are making additional money on a market rent, which essentially means that the rent you are paying is too low (from the perspective of the owner), and it will go up next year.
If I can make $200/week on my apartment (hypothetically) and my landlord knows that, he will simply raise my rent by $800/month when my lease is up for renewal. In either case, money eventually flows towards the property owner, whether this convergence happens immediately or with a slight delay. This has nothing to do with the regulation; it's just the basic economics of rent at play.
[0] The law in NYC is obviously incredibly complicated, but that's the eventual result.
EDIT: Fixed typo: should have been $800/month ($200/week for four weeks).
I agree with your larger analysis, and wish that Airbnb would essentially pack up and go home. But I don't think you're correct in assuming that rental rates and short term vacation rental rates are in the same economic bucket. That someone can make more off a property does not mean that the property is necessarily worth more, it may also mean it's zoned in a way that is economically locally suboptimal for that property. In this case that's relevant because hotels need to charge more for the same space because they pay very different taxes than homeowners. So an apartment wouldn't necessarily fetch that $800 more a month on the renters market, though it does in a different marketplace under a different premise (Airbnb and short term renting, respectively).
The different economic buckets exist largely because of regulations. The apartment might not fetch a full $800 per month in short term lets if property owners across Manhattan could charge the highest rent they wanted for the most profitable letting period, but it certainly wouldn't be possible for tenants to make a living off the difference between an artificially high price for [illegal] subletting and the artificially low price of renting long term for established tenants.
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If she's in lower Manhattan, I'd bet almost anything her apartment is rent-stabilized (and I think she's been here long enough to even have a rent-controlled apartment, potentially, though she might have missed the cutoff by a few years).
The bulk of the legal debate around Airbnb has nothing to do with rent-regulated apartments; it's the fact that in NYC, short-term subleases are illegal, period. (Most subleases are also violations of the original lease, though that's secondary).
The bulk of the economic debate is around the practical implications. If you're a renter (not owner) in NYC and renting out your apartment on Airbnb, one of two things is happening, economically:
1) You pay sub-market rent due to rent regulations (control or stabilization), and are making money off of this disparity between your rent and market rent. You are pocketing money that, if you were in a non-regulated apartment, would go to your landlord. (And since subletting regulated apartments is illegal, he will evict you and find a tenant to pay full price[0])
2) You are making additional money on a market rent, which essentially means that the rent you are paying is too low (from the perspective of the owner), and it will go up next year.
If I can make $200/week on my apartment (hypothetically) and my landlord knows that, he will simply raise my rent by $800/month when my lease is up for renewal. In either case, money eventually flows towards the property owner, whether this convergence happens immediately or with a slight delay. This has nothing to do with the regulation; it's just the basic economics of rent at play.
[0] The law in NYC is obviously incredibly complicated, but that's the eventual result.
EDIT: Fixed typo: should have been $800/month ($200/week for four weeks).
I agree with your larger analysis, and wish that Airbnb would essentially pack up and go home. But I don't think you're correct in assuming that rental rates and short term vacation rental rates are in the same economic bucket. That someone can make more off a property does not mean that the property is necessarily worth more, it may also mean it's zoned in a way that is economically locally suboptimal for that property. In this case that's relevant because hotels need to charge more for the same space because they pay very different taxes than homeowners. So an apartment wouldn't necessarily fetch that $800 more a month on the renters market, though it does in a different marketplace under a different premise (Airbnb and short term renting, respectively).
The different economic buckets exist largely because of regulations. The apartment might not fetch a full $800 per month in short term lets if property owners across Manhattan could charge the highest rent they wanted for the most profitable letting period, but it certainly wouldn't be possible for tenants to make a living off the difference between an artificially high price for [illegal] subletting and the artificially low price of renting long term for established tenants.