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NYC Tells Airbnb Hosts: Don’t Get Too Cozy

Tuesday, February 05, 2013 - 01:00 AM

The internet is causing big changes in New York’s hospitality business. Many visitors now spend the night in private homes, which they find through websites such as Airbnb. While these rentals tend to be cheaper, they are also very often illegal, and a growing number of hosts – people who rent out their homes or additional rooms – are being slapped with violations by city authorities. Now Airbnb says it is working to change local laws to make it easier to rent out an apartment.

$30,000 Fine For $300 Rental

The night before he was due in court last Thursday, Nigel Warren slept badly. He rose before daybreak, made himself coffee, and considered the cloud he’s been living under for the past five months.

Last September, Warren used Airbnb to rent his fifth floor East Village walkup to a visitor from Russia for three nights, making $300 while he was out of town for a few days.

He now faces fines as high as $30,000, for running what the city contends was an illegal hotel.

When The New York Times first reported Warren’s story in 2012, the violations had been dismissed on a technicality. Warren said a court officer assured him that was the end of the story.

But it wasn’t. The 30-year old web designer has since received five new violation notices based on the same September rental.

“The punishment doesn’t fit the crime,” Warren said, adding that he doesn’t believe his rental violated the law at all.

An Upstart Startup That’s Hard to Ignore

Until recently, it wasn’t very common for New Yorkers to rent out their homes on a short-term basis. But websites like VRBO, HomeAway, and Roomorama make person-to-person rentals easy. Airbnb said it helped 17,000 people find a place to stay in New York last New Year’s Eve.

The company also said it arranged temporary housing for more than 400 New Yorkers made homeless by Sandy.

“I think it’s another great example of the private sector using technology to help address this emergency,” said Mayor Bloomberg when he announced the program one week after the storm.

But Airbnb is also the latest example of how rapidly growing tech companies can run smack into government regulations. New York’s multiple dwelling law, which was tightened in 2011, makes most short-term rentals in larger buildings illegal.

Inspectors issued 1,897 related violations in 2011, the most recent year for which there are available records. The city continues to enforce the law vigorously.

John Feinblatt, chief policy advisor to Mayor Bloomberg, noted the city has different building codes for private homes and for hotels.

“Hotels have sprinkler systems, hotels have those instructions on the back of the door that tell you how to get out during an emergency,” Feinblatt said. “Hotels have to have two means of egress. Because we know that people who stay for a week or a day or three days need these extra supports in case of an emergency.”

Targeting Local Laws

For a long time, Airbnb brushed aside these kinds of concerns. The site said it was up to individual users to know what local laws apply and to follow them. The Airbnb Terms and Conditions page runs more than 12,000 words long.

Recently, however, the company has signaled a change in tone, positioning itself as an advocate for its hosts.

“What we’re really trying to do is look at the big markets where they have some laws, like in New York, that make it harder for hosts to host, and to change those laws,” said David Hantman, Airbnb’s head of global public policy, who was recently recruited from Yahoo!.

The company paid $30,000 to Bolton-St. Johns, an Albany lobbying firm, in the first six months of 2012, public records show. Hantman now travels regularly to New York City and Albany to speak with lawmakers, but to date, there is no legislation to amend the multiple dwelling law.

Hantman said the law needs to distinguish between people who occasionally rent out their own homes, and landlords who illegally run residential buildings as hotels.

Changing the law is also very much in Airbnb’s interest. A quick search of available rooms shows that many may not be legal under the multiple dwelling law. While the city has concentrated its enforcement efforts on individual hosts, the company could also find itself vulnerable.

 

A $30,000 Question

Nigel Warren arrived at the Environmental Control Board on John Street with a folder full of documents, ready to make his case, and expecting to make it by himself.

So he was surprised to find three people wanting to speak with him in the windowless waiting room: Airbnb’s David Hantman, an outside attorney hired by Airbnb, and Lindsay Garroway, a lawyer representing the management company responsible for Warren’s building, the A. Michael Tyler Realty Corp.

“There’s a whole party here,” Warren said. “I feel a little bit like I’m in over my head.”

Hantman explained he was there as an observer. Garroway said that the management company had an obligation to defend the landlord, who is named on the violation notices.

Inside the administrative law judge’s chamber, a lawyer for the New York City Department of Buildings requested more time to produce evidence, and the judge set a new hearing date for February 20th.

Afterwards, Warren noted that he could easily admit the violations, and pay a much smaller fine, about $6,000. Or he could just let the landlord deal with the violations, and face likely eviction.

Instead, he’ll go to court again to try to get the violations thrown out.

“Not that I need to justify my decision here – it's just that this is reminding me how insane this entire saga has been, given that the trigger was a several day rental that netted me a few hundred dollars,” Warren wrote, in an email.

 

Clarification:  New York City says it makes home inspections and issues violation notices based on complaints the city receives from neighbors about possible illegal occupancy of residences.  While Nigel Warren is contesting the violations issued as a result of his using Airbnb and says he will take responsibility for them, the violations were issued to his landlord.

 

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Comments [29]

Bob from brooklyn

The law confuses me. I own a single family home and would like to rent out a room on occasion for a part that has a separate entrance. It does not sound like this should be illegal, but I have heard reports of folks in similar situations in my neighborhood shutting down because of these new rules.

May. 05 2014 01:48 PM
Host in BK from Brooklyn

1) How on earth does hosting cause the potential for more trash? My guests have all been exceptionally clean. No bedbugs. Almost 90% were from some part of Europe. Do you haters think it's more likely Europeans have bedbugs? I think I'd have a better chance of taking how some stranger and getting bedbugs from him. And let me ask you-- are you going to tell your neighbors that they aren't allowed to take home strangers from a bar? NO YOU WOULDN'T!!!

2) I host while I'm in my apt too and I use the money TO PAY MY RENT. That's all. It's not taking housing units off the market and driving rents up. I have a one-bedroom apt with a converted loft space in the living room which my airbnb guests stay... Most people wouldn't want to live in a loft bed in a living room full time. GIVE ME A BREAK!!!!

Jun. 30 2013 12:52 AM
Alejandro Moreno S. from Marin County, CA

I don't doubt that "illegal rentals" may hurt the locals that live there full time. But don't think that the city is going after these rentals just because they don't have as many sprinkler systems and entrances and exits as actual hotels do. They are defending the hotels because they are defending the hotel owners, who pay the city lots of tax $ every year. Not only that, the hotel owners are frequently large corporations that lobby at all levels of government, and you can bet that most, if not all, of the lodging industry is VERY unhappy about Airbnb's success. So let's keep a big picture perspective here, this isn't just about fire codes, this is about money, and who and who is not, getting paid.

Jun. 19 2013 01:53 PM
ny medical malpractice

Great post.......

May. 28 2013 04:06 AM
Dylan from NYC

Anyone has the direct link to this law?
Is it illegal in NYC only, or also in other large US cities like Miami, LA, S. Francisco, etc.?

For what i know, the host must be reported, read below, and the city must prove that the guests are paying to stay to the host's place, and that the host isn't staying with them in the apartment.

I might be wrong, but this is what I remember.

"Clarification: New York City says it makes home inspections and issues violation notices based on complaints the city receives from neighbors about possible illegal occupancy of residences. While Nigel Warren is contesting the violations issued as a result of his using Airbnb and says he will take responsibility for them, the violations were issued to his landlord."

As for paying taxes on this extra income, please note that Airbnb reports everything to IRS. Then, of course, it's up to the host to declare the extra income or not.
I know a person who rented a place, got some money, and regularly paid taxes on that income. this person didn't bother the building/neighbors, and got decent people. it doesn't seem a big deal to me.

May. 22 2013 04:20 PM
bedbugger Dotcom from NY, NY

AirBnB is a real concern to me. Renting out rooms for a night -- even if the tenant is present, which I understand IS legal -- greatly increases the chance of bed bugs in the unit and building. Why should other tenants be exposed to this?

Apr. 28 2013 01:25 PM
AJ from Brooklyn

We've been trying to have one of AirBNB's featured listings taken off for two years. It's a unit in our building. Tenant doing the listing was evicted, condo unit owner was fined, use was shut down, and AirBNB knows it all. Still continues to list the unit with 14 reviews and an active calendar. How's that for misleading?

Apr. 17 2013 08:52 AM
Alex from Bklyn

Petebk from Brooklyn:

It wasn't "King" Bloomberg who created this law.

It was Governor David Paterson.

And in fact, this law makes the city MORE livable for those of us who live here.

Not sure if you rent or own, but if you rent and your landlord could legally rent to tourist at 3x the rent what you pay now, how livable would the city be to you then?

Feb. 23 2013 08:12 PM
Alex from Bklyn

Una:

Condo building, with a minimum stay of 2 nights, according to the links you provided.

Yes...
Those are ILLEGAL.

Feb. 23 2013 08:06 PM
Lou from Manhattan

I don't know if every one knows this but rental income is taxable, including short term rentals.

That is to say, companies like Airbnb report host income to the IRS, so don't think that people renting out their homes, or rooms in their homes, is untaxed. In fact, in contributes to the common good, tax revenue, city revenue, and retail revenue, not to mention offsetting some of the high costs of living in NYC.

One suggestion I have is that if you are living next to a short term rental situation, I would consider asking the landlord for a discount on your rent. Otherwise there are laws against landlords allowing this kind of rental situation and they would be liable for it.

If the landlord/owner is the person arranging the illegal rentals, again, I would suggest asking for a discount in your rent. There are laws against landlords arranging this kind of rental situation and they would be liable for it.

If you're a hotel, tough luck. Better get competitive.

My point being, if others are gaining from this kind of rental situation, why shouldn't you?

Get smart.

Feb. 13 2013 06:14 PM

Dear Peter Watkins, What should one do if one's landlord/building owner is the person converting rental apartments in the building into permanent AirBnB hotel units?

Feb. 11 2013 11:35 AM
Peter Watkins

For families and individuals that are concerned about strangers walking through their apartments halls - this is an issue that can easily be handled by landlords, building owners, and management rental companies placing limits on property usage in rental agreements. If this really matters to you, you'll probably seek out an apartment building that prevents this practice by contract.

Choice is a wonderful thing that benefits everybody.

This isn't another issue that needs to have government dictate one-size-fits-all rules. If you want to go on vacation for a week or two once in a while, it doesn't make any sense for your property to remain empty while you're paying rent on it. There are certain cases and lifestyles where it makes sense and is beneficial to be able to easily rent out your apartment for a while if you want to.

A flat out government ban on this practice only benefits the hotel industry and doesn't give individuals an opportunity to seek out their own best interests.

Feb. 08 2013 04:24 PM
Petebk from Brooklyn

It seems to me that a lot of the comments here pertain to landlord tenant relations. Why must the city get involved in that? The landlord, management company, building association has rules that they must enforce. It is not right for renting tenants to use Air BnB, but that is a matter for tenant and landlord. I believe what the city is doing here is overstepping and using strange requirements to fine people. 2 forms of egress for example. What hotel room has that? There is only 1 way out unless you jump out the window. I'm bothered by the city's abuse of the citizens here.

Feb. 07 2013 09:55 AM
Una

Are these legal? I dont think so...

https://www.airbnb.com/rooms/568997

https://www.airbnb.com/rooms/203272

Feb. 06 2013 09:18 PM
Real B&B owner from Manhattan

Dear Host in Brooklyn, You explained you have a single family home. If that is what it says on your Certificate of Occupancy then you are allowed to rent rooms out in your home(up to 4)if you live there. You should be registered with the city and state and pay appropriate taxes.
The real B&B owners in New York have been forced into court as well,paid astronomical fines and many have closed. These are tax paying businesses that have registered with the City and State, have sprinklers, own their small buildings and do not have tenants. The group STAY-NYC formed to try and keep these small businesses alive, most of which have been operating for 20 years or more. New Tech City should write about us! You can find out more and sign our petition at www.staynyc.org

Feb. 05 2013 07:47 PM
Anna

I think someone who occasionally rents out their apartment is no big deal. But the problem, and it is a MAJOR problem, is when people, owner or renter, permanently place their apartment on things like Air BnB. 1) It means fewer apartments for rent = higher price of available apartments. Bad for everyone. 2) Whatever you guys complaining about the "hotel lobby." Fact of the matter is they have a ton of regulations that they have to adhere to, that permanent Air BnB rooms don't. Also, they provide a nice tax base in the room tax, that Air BnB participants don't.

Feb. 05 2013 07:06 PM
Francis from NYC

Robert said: "Now I can't rent my apt out, or swap it if I want to travel?"

Except it's NOT your apartment.

And $140,000 in 1978 dollars would be the equivalent of more than $530,000 in todays dollars.
Do you remember what NY was like in 1978?
Your landlord took the risk to invest that kind of money in NY in 1978, when this city was a hell hole.
You did not.
And now to travel to Spain, Hawaii and Italy, stay in airBnB apartments, driving up the rents and real estate in those markets... Don't be surprised if the neighborhood you like to visit so much is actually full of other toursits and not locals.

Feb. 05 2013 04:42 PM
Robert from Manhattan

I've been to Spain and Italy and Hawaii, and a few Islands in the Caribbean and have rented apts instead of staying in hotels. Honestly it was cheaper than high end hotels but about the same cost as moderate hotels. I just liked living in a neighborhood, with local people, and having the option to make my own food. I see no reason why people should not be able to do this here in NYC. I've lived in my rental apt for 25 years. Its under market value, but still expensive for an average middle class working guy. I've paid my landlord close to $200,000 in rent, (he paid $140,000 for the entire building 35 years ago) Now I can't rent my apt out, or swap it if I want to travel? Come on. This is really petty. Most tourists are out most of the time, and most are very respectful too. Credit card security for damages usually does the trick. Dont rent to young party animal hipsters. :)

Feb. 05 2013 03:21 PM
Alex from New York City

Many point to the "greed" of the hotel lobby, but what about the greed of the individuals renting out their units without *ever* having the intention of living there? If there was no regulation, I could see people hanging onto leases and apartments indefinitely to rent them out exclusively to tourists paying high prices. That would make the housing crisis in NYC and SF much, much worse.

I can understand a resident wanting to rent out their apartment to make a little extra money on occasion. However, I feel like the practice should be limited to those who own their units (to limit landlord liability) and there should be a cap on the number of days a year that you can rent it out.

Feb. 05 2013 03:08 PM
Sajh from Brooklyn, NY

My building in Brooklyn had a shareholder/owner who rented out their apartment to many tourists. She knew the law and got caught. However, we could not get the ad removed. I called AirBnb and told them of our buidings policy and that it is illegal to rent in our building. I asked something simple of AirBnb: could they blacklist my buildings address from having any listings in it? They replied: No. They know their listings are illegal in NYC and yet claim reliance on the contract of the person renting the apartments. However AirBnb knowing the law, knowingly enters a invalid contract with NYC listers. Ask AirBnb how to discern between a landlord lister and an "occasional" individual landlord. They cant and neither could the city. Basically: AirBNB to NYC: Drop Dead.

Feb. 05 2013 02:44 PM
Sh!t My Tenants Say from NYC

"Hantman said the law needs to distinguish between people who occasionally rent out their own homes, and landlords who illegally run residential buildings as hotels." -- What about landlords who run good buildings but have some individual Rent Stabilized tenants who illegally rent out their rooms? They bring all sorts of dangers and bedbugs into buildings, and have no liability and are impossible to evict. THIS is the major problem, and was completely missed here.

https://twitter.com/SMTSay

Feb. 05 2013 01:49 PM

The hotel lobby is obviously out in force again. Obviously the hotel lobby hates airbnb.

If the guy wants to rent out his apartment while he's gone for a few days it should be allowed. Period.

Feb. 05 2013 01:26 PM
Lee Morandi from Manhattan

AirBnB + an unscrupulous landlord = a nightmare for residential tenants. Apartments vacated by legal tenants are being converted into permanent AirBnB hotel rooms. Studios and one-bedrooms that used to house 1 or 2 long-term residents, now house ever-changing groups of 3 or 4 people --- tourists who may be quiet and respectful, or loud and disruptive. This is unsafe, illegal, oppressive and disturbing.

Feb. 05 2013 11:49 AM
Host in Brooklyn from Brooklyn

I have been renting my single family home to occasional visitors from out of town since a long time. Now I am using airbnb which allows me to host a different group of people, especially families who come to town to celebrate a wedding, thanksgivings and similar. It diffuses my high NYC living costs, and allows me to travel, I am NOT raking in the millions here.
I have no idea how this "compromises the health and safety " of others, as Tom Cayler from NYC claims.
And I really don't understand Fred from Midtown's cynical comment, I housed two sandy refugees for over 5 weeks.
Nevertheless I would like to understand the laws and legality of renting a owner occupied single family. Does anybody know?

Feb. 05 2013 11:11 AM
Cerise from Bklyn

Not to mention the trouble you could get into with your building's management, whether you rent or own. In our condo, some units are owner-occupied, and some are sublet. Short term sublets of less than one year are not allowed. I would not mind if people rented their place one or twice a year, but I would not want them doing it all the time because of potential problems with security, noise, trash, etc. I think AirBnB is a great idea, but clearly it's complicated for the close quarters that we share in NYC.

Feb. 05 2013 09:45 AM
Fred from Midtown

DIDnt nyc list air bnb as a resource after sandy? ha!

Feb. 05 2013 09:17 AM
Stella from downtown

No one mentions the havoc some "tourists" cause in residential buildings. A friend of mine rented his apartment to a couple who partied all night night, left trash in hallways, were drunk and abusive... and left his apartment in a
mess! AirBnB should be banned from placing tourists in residential buildings.

Feb. 05 2013 08:08 AM
Petebk from Brooklyn

Another example of King Bloomberg treating the citizens of this city like his subjects. He likes to fine the living daylights out of ordinary working people while his developer friends exploit the city and reap our tax money. I also wonder how much the hotel lobby is behind this? More attempts to make this city unlivable for ordinary working people and haven for the super rich and tourists. Any attempt to get ahead and Bloomberg will make sure you know your place.

Feb. 05 2013 08:07 AM
Tom Cayler from NYC

AirBnB is a merchant of misery. Placing tourists in residential buildings is not only a crime in NYC, something that AirBnB's David Hantman likes to ignore and disregard, but it also compromises the health and safety of the residential tenants.

Tom Cayler
West Side Neighborhood Alliance
Illegal Hotel Committee

Feb. 05 2013 06:41 AM

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