Grumpy Incumbents

New York’s New “Illegal Hotels” Rule Means Some Airbnb Users Are Breaking the Law

airbnb manh New Yorks New Illegal Hotels Rule Means Some Airbnb Users Are Breaking the LawThere are 1,193 rooms for rent in Brooklyn and 3,250 rooms in Manhattan (and 141 in Queens!) listed now on Airbnb, which claims it books more rooms a night than any of the big hotels in New York City. The company is revving up, launching new social features this month and announcing a sublet service coming soon–and now TechCrunch reports the company has raised about $100 million at a $1 billion valuation. But some local Airbnb users, whether they’re aware of it or not, are breaking the law.

A state law that went into effect this month makes it much tougher to rent residential rooms for less than 30 days, a response to “online activities in promoting illegal short stays at much cheaper prices than the regular pricey New York hotels. The enforcement is complaint based, and fueled largely by calls to 311,” according to IBTimes.

Airbnb’s founder Brian Chesky spoke out against the law when it was being debated last year. “This legislation is being painted as slumlords who convert apartments to illegal hotels,” he told the New York Times. “But as far as I can tell, this will affect thousands of families, young professionals and elderly people” [who use the site to subsidize their rent].

The law appears to be directed at landlords who use Airbnb in addition to sites like Craigslist and Roomorama to rent rooms–or in the case of “Hotel Toshi,” rooftops–for short-term stays. But tenants who rent out their space using Airbnb may also be on the wrong side of the law.

Peer-to-peer rentals are allowed under the “appropriate exceptions for roommates, boarders, etc. who live or rent in the unit with the permanent occupant.” But if the tenant is away–as many listings on Airbnb advertise–it’s technically illegal. These illegal listings also live on other sites, but Airbnb has a specific “private apartments” category.

Some Airbnb users in the city were the target of legal action even before the recent “illegal hotels” law came into effect.

“The renting out of some or all of their space by the night is an obvious and egregious overcharge, the operation of a hotel without paying hotel taxes, and a violation of the zoning laws, not to mention the terms of the residential lease,” Adam Rose of Rose Associates told the Town & Village in March.

Rose Associates manages Stuytown, the residential complex at the edge of the East Village, where some residents have complained about transients and bedbugs coming in through the site. The residence’s manager, Rose Associates, has declared Airbnb-ing illegal and says it is “aggressively” pursuing legal action against residents who rent their apartments through the site.

“We are directing our efforts at the tenants,” he said. “To attempt to control the actions of websites with which we have no relationship or connection would not be a productive activity.”

We’ve reached out to the Mayor’s office and Airbnb for further clarification. UPDATE: Airbnb responded.

Follow Adrianne Jeffries on Twitter or via RSS. ajeffries@observer.com

Comments

  1. Kelly Sutton says:

    As someone that has used both Airbnb abroad and domestically, most of the fears around the site are way overblown. Let people make some extra cash. All parties are aware of the risks and rewards.

  2. Mike Cane says:

    I’m not going to cry because someone who can afford a whopping $165 *per night* feels oppressed.

  3. Anonymous says:

    NY’s laws are just the beginning, think how many people use AirBnb to rent rooms in their houses/apts where their lease specifically says “no additional people, you must notify mgt, etc etc”

  4. Crazy Eddie says:

    I live in Stuy Town. The people who initially rented these apartments
    here and now advertise them as B&B’s (WTF?) don’t even live here. Besides being against
    the recent law, these arrangements are illegal as per the NYS rent stabilization
    laws and current management rental lease agreements. I’m sure a lot of co-op
    boards are also feeling the pain that these type arrangements bring, the pain
    being unscreened tenants, potential catastrophic consequences such as fires (see
    any recent NYC article),, noise, liability issues, tax revenue not paid,etc. I
    could  on and on.

     

  5. Alex Hamilton says:

    Airbnb hosts can have their Facebook friends leave positive reviews on their accounts as if they were real customers. The whole thing is shady!

    1. Obvious says:

      No, they are not posing as customers.  They are leaving positive reviews as their facebook friends.  You can only leave a review if you (as a guest) if you actually stayed there.  There are also “Friend recommendation” reviews as well as “Facebook Friend recommendation” reviews.  They are divided and it differentiates how the reviewer knows the host.  

      PLEASE get  your facts straight before writing what you are ignorant of.

  6. Brucerosard says:

    Why do I keep hearing this silly comment, just published on TechCrunch from Allen and Co’s conference today:  – “one
    investor had a theory, “Airbnb is printing money. They operate more rooms in
    Manhattan than all the [big]
    hotels combined.”  – It’s not combined, it’s as many as any  ONE big hotel in Manhattan.  Does TechCrunch own a piece of this business?

  7. Pleople and  hotel chains and operators are just jealous they didn´t think of it before airbnb.

  8. Ryoukidingme says:

    Im in chicago and the police just surrounded my home last night because 3 malaysian tourist coming home from touring downtown.  the crime?  Basically bringing white people into the englewood community and having the ‘potential’ of causing an international incident.  It turned out that every white guest that walked the street were pulled over to the side and asked what and why are they in the area…even escorting some home only to harrass me for bringing ‘these’ people to the neighborhood with the liability of causing an embarrassment to the City of Chicago.  I couldn’t believe it.  I have a court appearance at the end of september.  Anybody have any information they can share with me about the legality of this harrassment?  I have a you tube video called ‘Chicago Police Dont want White People in the Neighborhood (by ryoukidingme).  
     
    This is absolute nonsense.  I don’t understand why they dont let people make a living in an economy that sucks!

  9. Kris Allien says:

    I have just read several good feedback about Airbnb.. They’re successful now right?

  10. Tenant says:

    I live in a residential building on the upper west side 94 and Broadway and it runs an illegal hotel. The Days Hotel. They don’t bother to hide, they advertise on the internet, have huge banners and illuminated signs outside, and they have about 250 illegal rooms. The mayor’s office for special enforcement showed up twice in 15 years, and gave them a 10 and 13 thousand dollar fine each time. They are transforming now into a new franchise “The night hotel” which advertise as :”Party all night and sleep all day, just because you can starting at $450.00 a night.”  They have been harassing tenants all this time and HPD has denied the certificate of no-harassment, however, DOB keeps giving them permits to keep transforming more units into illegal hotels. They have been using every single excuse they can to harass me, I am one of the few on a top floor. They turned of my electricity 5 times in the past month and I had to call the police 3 times to have it back. They do construction on weekend ONLY in the unit above mine, wake me up with the noise. They use the units illegally demolished adjacent to mine as a construction deposit and keep doors open so dust and particles are drafted into the hallway. They do not clean the place after daily construction. they leave dirt hotel linen overflowing near my unit, they leave hotel guests bags all over the loby. Despite uncountable complaints, NO ONE is stopping it. DOB, Mayor’s Office for Special Enforcement, Public Advocate, Borough President’s Office, Gale Brewer, Rosenthal, SRO Law Project, The Fire Deparment, DEP, NYPD, Housing Court. The Landlords or slumlords are doing whatever they want in this administration quietly and undercover. Just in the building where I live, they have destroyed 300 rent stabilized units, some class A, and are on the go, NO ONE is stopping them. So that you know and people stop talking that some new law made things tougher. No , on the contrary, they passed the law and they are enforcing whatever they had less.

  11. Brittney Stonewall says:

    I feel like this will be an issue that will forever be disputed
    and if public doesn’t take a stand: nothing beneficial will come forth for
    them. Now I’ve never rented from a vacation rental, but I also know that the
    new multiple dwelling law states “the rental of New York City apartments cannot
    be rented for less than 30 days.” However, you play with the hand you’re dealt and
    if you’re do not understand the law in it’s entirety- there’s a problem. It’s a
    fair game.  If you’re just ignoring the law and you’re an equal
    opportunist in illegal conversions of vacation rentals in a residential
    building- that’s another problem and the list goes. But my question is, what
    happens to the legitimate companies who abide by the law? Are they assigned
    code prisoner No. 036504 too, and would they be pigeonholed in the same category
    as the illicit properties? I think we’ll never know because as I have said
    before and I will say it again- people like Toshi Chan are a fudging “JACK
    IN THE BOX,” you’ll never know the exact probability of their popping up!
    When it happens, it happens. In addition, I don’t believe I concur with Airbnb
    in any way, shape or form. In fact, I gather they could be just as bad and in
    the city- you never know who to trust.

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  13. Sal Ratsep says:

    Not to hijack this thread, but I’d like to find out if I’m eligible for a short sale and I have no idea how to find a local, highly regarded realtor… do you know anything about this realtor? They’re located in Fair Oaks, CA near my home and I can’t find reviews on them – Becky Lund & Associates, 8814 Madison Ave Fair Oaks, CA 95628 (916) 531-7124.