Mostly Illegal Airbnb Ads, New York State Says

Airbnb, the pioneering home rental service, touts itself as useful and virtuous, but the reality is far less benign, according to a report Eric T. Schneiderman, the New York attorney general, released Thursday.

The report will state that nearly three-quarters of all Airbnb rentals in the city are illegal, violating zoning or other laws. Commercial operators, not unlucky locals, provide more than a third of the units and generate more than a third of the income. At least a handful of owners run what amounts to illegal hostels.

Owners on Airbnb do make money, but it doesn’t spread. Most rentals are in three prestigious Manhattan neighborhoods. Queens, the Bronx and Staten Island barely figure.

Airbnb has refused to aggressively challenge the figures in the report, which draws on four years of data it provided to the attorney general after a court battle.

“We need to move forward,” Airbnb spokesperson Nick Papas said. “We need to work together on some sensible rules that stop bad actors and protect ordinary people who just want to share the house they live in.”

Airbnb, which is most likely considering a public offering in the next few years, seemed keen to avoid another fight. Its latest fundraiser valued its valuation at $ 10 billion.

The real estate broker and his imitators, like the Uber taxi service and its clones, are causing upheaval everywhere they go.

Admirers say these stars of the so-called sharing economy are breaking monopolies that have become greedy and lazy. They empower individuals. Critics say start-ups are unsavory efforts to avoid regulation and taxes, and that the very term “sharing economy” is ludicrous.

In some controversial places, like San Francisco, where the local government last week approved a plan to essentially legalize Airbnb, a resolution may be in sight. But in New York City, where real estate is often seen as a blood sport, the battle only deepens.

Mr Schneiderman and city regulators will also announce a joint enforcement initiative on Thursday to shut down illegal hotels. Various regulatory bodies will investigate violations of building and safety codes and tax regulations.

“Anyone operating an illegal hotel should be informed that the state and the city will take aggressive enforcement action in this area,” Schneiderman said. “A smart advertising campaign does not change the fact that this is an illegal activity.

However, he was careful to speak of “illegal hotels” rather than “illegal rentals”. Airbnb is already too popular to dislodge it altogether, no matter what the housing laws say. It also thrills travelers, who enjoy cheaper and generally more attractive accommodation.

“Most of our guests are regular New Yorkers, and the overwhelming majority live outside of Manhattan,” Papas said.

As for the 72 percent of listings that Mr. Schneiderman declared illegal, Mr. Papas said it was difficult to say what was going on.

“Every home, apartment, co-op and living space in New York City is subject to a myriad of rules, so it’s impossible to make that kind of blanket statement,” the spokesperson said. “This kind of uncertainty and lack of clarity is exactly why we are arguing for clear and fair rules for sharing the house.”

The report, Airbnb in the City, relies on anonymized data from 497,322 private stays in 35,354 unique locations that lasted less than 30 days and did not involve a shared room.

The report says the service is dominated by large-scale operators, finding that 6% of hosts made 37% of the revenue, or $ 168 million. The number of units they administered ranged from three to 272. The individual with those 272 units billed an average of $ 358.19 per night, bringing in $ 6.8 million, according to the report.

Some of these operators may have already disappeared. In April, amid Airbnb negotiations with Mr Schneiderman over disclosing its data, the company said it was evicting hosts with 2,000 homes in New York City because they “didn’t offer a local experience. quality to customers “.

Some of the large-scale operators that remain are as unhappy with Airbnb as they are with Mr. Schneiderman. More than 100 hosts were told by Airbnb over the summer that Mr. Schneiderman had requested information about them and that the company would release the data unless a court prevents it.

A group of hosts has now filed a lawsuit against Airbnb as New Yorkers trying to make ends meet in the sharing economy.

“It is not acceptable for a website that has collected sensitive personal and financial data in order to market and profit from short term rentals to turn around and hand that private data to a politically motivated attorney general, just to save his own skin, ”said the group’s president.

It declined to be identified because he said it would make its properties a target for regulators. All of its units are legal, he said.

A Quinnipiac poll last month revealed strong divisions among New Yorkers over companies like Airbnb. When asked if city residents should be able to rent rooms to strangers like a hotel, 56% of those surveyed said yes and 36% said no.

“Airbnb allows longtime residents to stay in their homes by earning just a little extra money to make ends meet,” the company says in its promotions. He points out that only 18% of his rentals in New York City are “where the hotels are”, which he defines as Midtown. The remaining 82% are “outside the traditional tourist areas”.

But the attorney general’s report says rentals in three areas of Manhattan – Lower East Side / Chinatown, Chelsea / Hell’s Kitchen and Greenwich Village / SoHo – accounted for 40% of private stay revenue, or $ 187 million.

Bookings in Queens, Staten Island and the Bronx were only 3%, or $ 12 million.

The report also indicates that an increasing number of units were rented on a more or less permanent basis. While still small in absolute numbers – around 2,000 units are rented for six months of the year or more – affordable housing advocates have warned that this trend could push up prices for long-term residents as they go. that the units disappear from the building stock.

A dozen buildings had 60% or more of their units used as rentals for at least half of the year, “suggesting the buildings were functioning as de facto hotels,” the report said.

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