Airbnb Seeing Problems in New York State
People from all over the globe want to visit New York. So, an online community marketplace – Airbnb, was introduced to connect people who are looking to rent their homes with people who are looking for accommodations.
Now, according to a recent report by Eric T. Schneiderman, the New York attorney general, this home rental service may not be as useful and virtuous as it presents itself to be.
The report, with four years of data provided to the attorney general after a court fight, indicates that almost three-quarters of all Airbnb rentals in the New York City are illegal – violating zoning or other laws.
It was pointed out that more than one third of units are supplied by commercial operators who dominate this service, not residents experiencing hardship, generating more than a third of the revenue. Also, some landlords are running and offering on Airbnb what seem to be illegal hostels. Even though the profit is being made, it is not being shared.
“Airbnb allows longtime residents to stay in their homes by earning just a little extra money to help make ends meet,” claims Airbnb advertising, and further states that only 18 percent of its New York rentals are “where the hotels are,” (Midtown), and the other 82 percent are “outside of traditional tourist zones.”
However, the attorney general’s report says that most places for rental are in three high-profile Manhattan neighborhoods: Lower East Side/Chinatown, Chelsea/Hell’s Kitchen and Greenwich Village/SoHo — which accounted for 40 percent of private stay revenue, or $187 million.
Reservations in Queens, Bronx, and Staten Island accounted for only 3 percent, or $12 million.
The report also reveals that an increasing number of units were being rented out on a rather permanent basis. Even though still not a significant number in the big picture — about 2,000 units rent for six months plus — affordable-housing advocates have warned that this trend could cause increase in prices for long-term residents, since units disappear from the housing stock.
The report states that about a dozen buildings had 60 percent or more of their units rented out for at least half the year, “suggesting that the buildings were operating as de facto hotels.”
Airbnb seems to be more than willing to avoid another fight, especially since they may be doing a public offering in the next few years. They have not strongly denied the statements or disputed the data in the report.
Some people are excited about the so-called sharing economy and say it is great to break up “monopolies that have grown greedy and lazy”. Critics, on the other hand, say that such start-ups are “unsavory efforts to avoid regulation and taxes”; as far as the term “sharing economy” – they find it ridiculous.
Although in some places a resolution may be imminent, in New York the battle seems to be further expanding.
Mr. Schneiderman is taking steps to stop illegal hotel operators from further eroding New York City’s affordable housing stock. He joined city regulators in their initiative to shut down illegal hotels, as they investigate violations of building and safety codes and tax regulations.
“Anyone operating an illegal hotel should be on notice that the state and city will take aggressive enforcement actions in this area,” said Mr. Schneiderman. “A slick advertising campaign doesn’t change the fact that this is illegal activity.”
Airbnb has already become a rather popular online community, and regardless of what the housing laws say, it is not easy to dislodge it completely. Mr. Schneiderman even made it a point to speak of “illegal hotels” rather than “illegal rentals.”
“We need to move forward,” an Airbnb spokesman, Nick Papas, said. “We need to work together on some sensible rules that stop bad actors and protect regular people who simply want to share the home in which they live. Most of our hosts are regular New Yorkers, and the overwhelming majority live outside of Manhattan.”
Addressing the 72 percent of listings that Mr. Schneiderman said were illegal, Mr. Papas said it was hard to tell what was going on.
Some of the large-scale operators may be out of the picture already. In April, as Airbnb negotiated with Mr. Schneiderman over submitting its data, the company said it was expelling hosts with 2,000 listings in New York since they “weren’t providing a quality, local experience to guests.”
Some of the large-scale operators that are still providing their service are equally upset with Airbnb and with Mr. Schneiderman. During the summer more than hundred hosts were told by Airbnb that Mr. Schneiderman had requested information about them, and that they would turn it over unless a court prevented it.
A group of the hosts has now filed a lawsuit against Airbnb under the name New Yorkers Trying to Make Ends Meet in the Sharing Economy.
“It is not O.K. for a website that has gathered sensitive personal and financial data in order to market and profit from short-term rentals to turn around and hand this private data over to a politically motivated attorney general, simply to save its own hide,” said the president of the group, who did not want to be identified so as not to make his properties a target for the regulators. He maintains that all his units are legal.
An independent poll conducted in September by Quinnipiac revealed sharp divisions among New Yorkers when it comes to companies like Airbnb. 56 percent of the respondents said yes when asked whether city residents should be able to rent rooms to strangers like a hotel; 36 percent said no.
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Source:
http://www.nytimes.com/2014/10/16/business/airbnb-listings-mostly-illegal-state-contends.html?_r=0
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