A warning for Airbnb hosts, who could be breaking the law

In September, Nigel Warren rented his room in the apartment he lives in for $ 100 a night on Airbnb, the rapidly growing website for short-term house and apartment stays. His roommate was cool about it, and his guests have behaved well during their stay in the East Village building where he is a tenant.

But on his return from a three-night trip to Colorado, he heard from his owner. Special city law enforcement officers showed up during his absence and the owner received five infractions for breaking the rules for illegal passing hotels. Taken together, the potential fines appeared to be over $ 40,000.

Mr Warren, like many if not most Airbnb users, hadn’t read the terms and conditions on Airbnb’s website telling him not to break the laws (while also wiping the company’s hands off the responsibility of the respect by the hosts of these laws).

So he swallowed, begged his landlord not to evict him and told him he would attend the mandatory administrative hearing related to the violations and pay any fines. Then he swallowed harder and hired a lawyer for $ 415 an hour. He also sent a note to Airbnb, which collects the overnight charge on behalf of its hosts and keeps some for himself.

Since the company is well aware that many of its site hosts who live in large cities break the rules, he said, why not warn people more explicitly of the type of problem they might be in. ? “By ignoring local laws, you are killing the people you need to make your site successful. ”

From the perspective of an Airbnb customer who needs a place to stay – and I count myself among the growing number of satisfied Airbnb customers – their service pushes every possible button of consumer enjoyment.

You beat the system by avoiding high hotel rates, you stay in areas where there are no hotels at all, and you can also connect with connected local hosts.

But all the airy talk in tech start-up circles about “collaborative consumption” and the “sharing economy” aside, five-figure fines and the possibility of deportation are no joke for these hosts. .

In fact, local laws may prohibit most or all short-term rentals in many circumstances, although the enforcement can be sporadic and you have no way of knowing how tough your local authorities will be. Your landlord may not allow such rentals in your lease, or your condominium board may not view it with kindness.

Mr Warren, 30, admits he broke city rules and didn’t read his lease to see if that kind of sublet was kosher. Ignorance of the law is no excuse, although Airbnb avoids educating the people who provide its inventory.

But a lingering mystery for him was why the city pursued him in the first place. He didn’t rent his room that often, after all.

Yet he was breaking the law. And that law says you can’t rent single-family homes or apartments, or rooms inside, for less than 30 days, unless you’re living in the house at the same time.

Popular Airbnb markets like San Francisco and New Orleans have even more restrictive rules, and London and Paris have their own ordinances. People who wish to go through the official licensing process for hostels or guesthouses have this option if they wish.

That said, New York City officials don’t come and pick you up unless your neighbor, doorman, or janitor has complained to authorities about strangers walking around.

“This is not the deal that someone who bought or rented an apartment has entered into, that their neighbors could change from day to day,” said John Feinblatt, chief planning adviser to Mayor Michael R. Bloomberg political and strategic and coordinator of criminal justice. The city is also concerned about fire safety and maintaining at least some availability of rental inventory for the people who live there.

Since the Mayor’s Office for Special Enforcement began to seriously consider the short-term rental issue in 2006, it has received over 3,000 complaints, conducted nearly 2,000 inspections and issued nearly 6,000 notices. of violation.

On Thursday, Mr. Warren became one of the lucky offenders. He arrived on the 10th floor of a building in the city of Lower Manhattan, expecting to take his pieces at a hearing and write a big check. Instead, he found out that the buildings department never filed the appropriate documents with the Environmental Control Board, which is conducting the hearings. A clerk there dismissed all violations against him without a fine, and I could see the color come back to Mr. Warren’s face.

His complaint to Airbnb remains, however. “They have to start to be a little more responsible, to recognize what has happened and to warn users,” he said. “They’re in a kind of brawl with the cities, and the users are paying the price.”

Mr. Warren makes a living making websites easier to use, and he and I pitched the idea of ​​a box that would appear when you sign up as a host on Airbnb in certain cities where the laws are clear.

It may not be reasonable to expect the company, which estimates it’s worth at least $ 2 billion according to a TechCrunch report on its latest fundraising efforts, to hunt down every zoning law in tiny holiday hamlets. But he can certainly clarify the rules in urban areas where he knows people like Mr Warren could easily end up in hot water.

“I think any business that claims that kind of value should have a social responsibility to disclose the laws of the jurisdiction in which it is located,” said Janan New, executive director of the San Francisco Apartment Association, a membership group for owners who have repeatedly become entangled with Airbnb. “And if they can’t do it, then their value isn’t that high.”

I asked Airbnb two questions. Why not implement the disclaimer I described above? And given the number of listings on the site from hosts who are breaking the law or the terms of their lease or the rules of their condominium board, does he want each of those people to remove those ads today? hui?

Airbnb spokeswoman Kim Rubey didn’t answer any of the questions over the phone and emailed a statement hours later that didn’t really answer them either. I reprinted it in its entirety (and dissected in detail) on our Bucks blog. The company “is constantly re-evaluating how to do its job better,” the statement said.

Where is it? Many people believe that living on the web allows them to belong to an exalted class to which the old laws cannot apply. That kind of arrogance takes your breath away, until you realize how brilliant a business strategy it is. If you stopped considering all the 80 year old zoning laws or tried to change the ones you knew your customers would violate, you would never even open the market.

But if you can create facts on the ground – and 200,000 lists around the world – then you have a constituency that is ready to lobby on your behalf. Better then, walk forward with earplugs, blindfolded and fingers crossed. If you hear no evil and see no evil, then you have a chance of fighting for a billion dollar valuation until the regulators have enough firepower to slow you down.

All of this is great for venture capitalists, startup executives, and Airbnb guests who don’t mind underinsured hosts. But if you are a host, there are a few things to consider. Could you afford the kind of fines Mr. Warren was facing? Otherwise, remove your ad.

Even if your guests are considerate, as Mr. Warren is supposed to be, it won’t protect you. Curious neighbors are everywhere, and if they don’t like you or your music or your dog or the smells of your kitchen, they won’t hesitate to report you anonymously to the proper authorities as soon as they see strangers in or around. near your home.

Next, consider tactics like the ones Ms. New and her members in San Francisco are currently deploying.

Their solution, in a city that has many restrictions on the type of rent landlords can charge, is to simply evict people.

“If the goal of my building owners is to make their buildings profitable, and you have rents capped, and you can get rid of the tenants, well, there you go,” she said. Sounds pretty hard, I told him. No second chance at all? “We are not in the parenting business,” she replied. “We are in the real estate business.

There is no joy for someone like me, a fairly regular Airbnb customer, to report all of this. But when I called Arthur S. Levine, the mayor’s office special law enforcement sergeant who came to Mr. Warren’s apartment in September, he seemed happy to hear from me.

“If you take it out on Airbnb God bless you,” he said. “It would make my life a lot easier. “


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