The Airbnb Economy in New York: Lucrative but Often Unlawful

http://www.nytimes.com/2013/11/05/nyregion/the-airbnb-economy-in-new-york-lucrative-but-often-unlawful.html

by davidf18 • 13 years ago

47 27 13 years ago

kurtko• 13 years ago

I'm all for AirBNB in NYC and otherwise, but the taxation issue is the real issue. I think other laws/zoning can and should be relaxed to accommodate them, but this is business - they need to pay their taxes to put everyone on a fair footing.

benastan4• 13 years ago

I agree. It's clear that (1) hotels aren't worth the cost; (2) people would rather 'live like locals'; and (3) distributing hotel management & maintenance is more effective that concentrating it in giant hotels.

Not to mention that the booking experience on Airbnb is way better than using the counterparts of hotels and hotel booking sites.

gmjoe• 13 years ago

In most residential apartment buildings, renting out your space for less than 30 days is illegal, unless you are present when you have that visitor.

Why can't NYC come up with some common-sense regulation, like everyone is allowed to rent their apartment to up to 8 separate groups of people, for not more than 6 mos out of the year total, or something? And that landlords are not allowed to interfere?

This would prevent "hotel"-style abuse, like different tenants every night in a residential building, but still give people the flexibility to rent out for the occasional weekend, or month, or whatever.

The 30-day thing is just ridiculous.

greenyoda2• 13 years ago

"Why can't NYC come up with some common-sense regulation, like everyone is allowed to rent their apartment to up to 8 separate groups of people, for not more than 6 mos out of the year total, or something? And that landlords are not allowed to interfere?"

If someone's renting an apartment, it's by definition not "their" apartment but the landlord's apartment. The landlord decides to rent to a particular tenant based on things like background checks, references, interviews, etc. These kind of assurances are not available for random people that the tenant rents to. Unless the tenant bears complete legal and financial liability for anything bad his subtenant does, it's asking the landlord to take on a significant risk.

Also, if each tenant in a large building could rent their apartment to up to 8 separate groups of people, you would have a constant flow of strangers through the building. Since the short-term renters don't have any stake in keeping the building clean or safe or quiet, this could pose problems for the other tenants. I've lived in apartments where even the long-term tenants left garbage in the halls and played loud music at 2am. I can imagine that someone who is staying in the building for a weekend might be even more anti-social, since there would be no personal consequences to their bad behavior.

benastan4• 13 years ago

Airbnb has sought to bake in accountability both at a large and small scale.

1) Airbnb has a crazy insurance policy [1]

2) Both the host & guest get reviewed. A single bad review can impede your ability to rent on either side.

This is purely based on my experience, but it seems like guests really don't misbehave.

Maybe there is the occasional party or guest who trashes the place. Good hosts tend to hire cleaning services to deal with messes. Generally, guest are tired from traveling and doing activities and are low impact.

[1] https://www.airbnb.com/guarantee

gojomo2• 13 years ago

"8 rentals not more than 6 months per year" seems just as arbitrary and ridiculous to me as the "under 30 days disallowed unless present" rule. So the problem is "common sense regulation" varies a lot based on perspective.

For me, the common sense rule would be: let people contract however they want. Let them talk out or complain/negative-review/sue for any actual abuses that develop.

A parade of responsible short-term tenants incurs little negative impact, while a single bad tenant (or even house-guest) can be a disaster of crime of destruction. Let the right checks and balances evolve, rather than trying to dictate beforehand what formulas might work for wildly different tenants, properties, landlords and neighborhoods.

URSpider942• 13 years ago

For me, the common sense rule would be: let people contract however they want. Let them talk out or complain/negative-review/sue for any actual abuses that develop.

First of all, NYC landlord-tenant law is so far past the "let people contract however they want" phase that it would be laughable to let AirBnB operate under these rules. Nearly 50% of the apartments in New York are rent-stabilized, meaning that the tenants can't be evicted except for non-payment of rent, and are guaranteed a below-market-rate rent with government-dictated annual increases. It's ridiculously unfair to landlords to allow rent-stabilized tenants to re-rent their apartments at market rate and pocket the difference.

Second, have you ever actually tried to sue someone? It's incredibly difficult, time-consuming and expensive.

Third, there's the issue of moral hazard. A renter whose AirBnB tenant burns down the building is unlikely to have the resources to pay for the damages to the property of the landlord or the other tenants (and is unlikely to even have insurance to cover those costs). Upside always looks better when you know you'll be able to walk away from the downside.

yardie• 13 years ago

Apartments don't have 24-hour security. And that is 1 of the reasons I don't use it. The other being corporate discount and frequent flyer miles usage.

And AirBnB is suffering from it's own popularity. Once you get beyond a certain size your audience stops being responsible, early adopters and grows to include everyone and anyone.

xixi775• 13 years ago

These are not city regulations, these are buildings rules -- the owners who would like a rule like you are suggesting are surely free to propose that at condo owners association meeting.

Zoning BS is quite another matter.

tgeek• 13 years ago

I lived in a building where the landlord stopped renting out apartments normally and started instead putting them on Airbnb. He charged ~30% for doing it via Airbnb than the normal rents would have been. Then they raised rents more on apartments in the building. When I left ~4 out of 50 or so units were on Airbnb. Apartment next to me was a continuous ramble of people who left trash around and threw late parties(more than the normal residents).

I'm all for the idea of Airbnb, but there needs to be something in place that prevents this type of thing. Finding an apartment in NYC is rough enough, but artificially reducing supply via this type of thing causes the rent increases even more.

Taxing it seems like the only way to put the reverse pressure on landlords doing this, but I'm doubtful it will do enough.

bradleyjg• 13 years ago

What they should do is throw 'P' and Leslie in jail for six months or a year. It'll make the next people think twice before breaking the law.

Prison shouldn't just be for poor people. This is much more likely to harm me than some guy selling pot.

benastan4• 13 years ago

Your landlord was running a hotel.

I've stayed with people who had a few properties that they rented on Airbnb. Renting 1-5 seems okay. More or less, you're running a B&B.

When it gets to whole floors or buildings, you've got a hotel on your hands. That is and should be illegal and Airbnb should work with authorities to shut that down.

laxatives2• 13 years ago

I'm living in one of these hostels right now (the landlord has half a dozen buildings and probably ~50 rooms available in the area on AirBNB) and I posted about it before. In brief, its a shithole (ffs the showerhead is held up by electrical tape). From before:

"I'm living in one of these places now and I could not say enough negative things about the place or AirBNB. Its a mess, most of the rooms are either filled with beds or used entirely for furniture/tool storage. There were no shared trashbins until about 4-6 weeks after I had arrived. One of the guests had a severe breakdown and would spend hours in the middle of the night rapping or shouting at the top of the lungs, forcing his roommates to move to the permanent tents in the backyard. Eventually the guy left during one of his rants and disappeared for a few days, during which the landlord had us avoid calling the police because he did not want to have them involved. Worst of all, I feel like none of us are in a position to do anything. I complained within a few hours of arrival on my first day because the place is a mess, but AirBNB charges a months rent to leave early on a long term stay and there's nothing to gain in destroying our relatioships with the landlord. The rating system also makes it so that taking any action would probably result in an open flame war so that I'd probably get rejected by future landlords. I'll probably never use AirBNB again regardless."

I'm sure AirBNB is great for a night or two if you're backpacking and just need a matress to crash on before you move on, but if you're expecting anything more than that, I would highly recommend against using it.

jacalata• 13 years ago

I'd guess that airbnb is pretty heavily invested in not getting the cops called to any of these clearly-professional places in New York right now. Have you tried doing the whole executive email bomb requesting a refund for yourself/anyone else you can get together with there?

Edit: and if that doesn't work, you should absolutely report the landlord to all relevant authorities when you leave, probably including the NY attorney general currently chasing airbnb.

laxatives2• 13 years ago

I don't know about an executive email bomb, but I requested a refund and was basically told I was free to cancel at any time, but they'd bill me a fat cancellation fee equal to a month of rent. I complained the first night I was here and I spoke to a bunch of residents who also complained. I heard an AirBNB representative was supposed to come check out the place due to the number of complaints, but from what I gathered he never showed up. Also this is in California, not NY.

rtpg• 13 years ago

if you've been there long enough and it's not a licensed hotel, you might be under an implicit lease agreement and could force his hand for not maintaining the property correctly.

xixi775• 13 years ago

Looks like the landlord is really quite worried about getting authorities involved in anything, and surely he is much more worried about getting a negative review than you do (read a recent post here from a guy in LV for the landlord's perspective). You have a lot of leverage over him, use it, get a refund, move out and find a better one.

Unless of course you can't find a better one for the same money that you are paying now -- in which case you are getting what you are paying for, so relax and enjoy the savings :)

URSpider942• 13 years ago

Ex-NYC landlord here. I'm glad to see how many people realize that re-rental of a rental property in a multi-tenant building is problematic.

NYC rentals are some of the most regulated in the country; nearly half of rentals are covered by rent stabilization law, which makes it all but impossible to evict tenants as long as they pay rent, and dictates annual rent increases regardless of the gap between current rent and fair market value. Rent-controlled tenants who rent out through AirBnB are, quite literally, rent-seeking -- using their government-granted preference in the housing market to extract a profit.

Beyond that, there are very real issues of security and disturbance of community when strangers are coming in and out of a property. My wife and I lived in our building, and it was like a little neighborhood. People left their boots and umbrellas in the hall on rainy days, and we had a communal BBQ grill in the backyard. If you haven't lived in a super-dense city like London, NYC or Tokyo, it's hard to understand how sacred the interior of an apartment building is.

One way to look at it is that AirBnB is "disrupting" the stale hotel industry. Another way to look at it is that hotel laws and regulations were put in place to put paid to the crush of illegal/dangerous/unhealthy boarding houses that cropped up near the turn of the last century. Stories like laxatives' make me fear that we are headed right back there.

xixi775• 13 years ago

Surely they are rent-seeking -- I personally can't blame them. Perhaps if more people do this, it might even lead to the end of these immoral and wasteful "government-granted preferences". The fact that NYC rentals are some of the most regulated is not a good thing, nor does it prevent all kinds of horror stories with regular landlords. Is an average AirBnB customer less satisfied with his experience compared to an average NYC renter? I suspect not, particularly given the review system.

I have no problem with condo associations limiting what individual owners can or cannot do (or charging them extra for the privilege), same with landlords limiting re-rentals, but neither one calls for city involvement.

The Airbnb Economy in New York: Lucrative but Often Unlawful

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