Airbnb is Illegal in NYC, But When There Are Dollars to Be Made…


“Last year we made about $90,000 from this business,” said Leslie, who rents out two rooms in her two-family house in Brooklyn through Airbnb.

Leslie, a stay-at-home mother who is married to a teacher, agreed to speak only if her address and last name were withheld. So did Joe, who said his “dedicated Airbnb room,” which brings in about $2,000 per month that he splits with his two roommates, allowed him to start a small technology company. And P., a musician who rents out two apartments in Manhattan and one in Brooklyn.

One man, however, declined to be identified by his extremely common first name, by his profession or even by the state in which he lives. Instead he described himself as “one of the people they really want to get.”

Elizabeth Harris looks at the lucrative, but illegal (in NYC) Airbnb economy in New York, which I’ve talked a little bit about before in regards to some of the lawsuits that have been filed. One woman says she rents out a room only while she is also occupying the apartment, and started doing it after she racked up some high medical bills during the recession—it’s hard not to be sympathetic to that. [Meanwhile, in San Francisco...]

Photo: Tommypjr

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14 Comments / Post A Comment

EvanDeSimone (#2,101)

I understand the desire to crack down on this for health and safety reasons, but it’s hard not to imagine that the recent stridency isn’t at least in part motivated by a push from the legitimate hotel industry looking to protect their profits.

EDaily (#4,396)

@EvanDeSimone Yes, but also the millions in hotel tax dollars that should be going to the state, according to the attorney general, who has been leading the crackdown on this.

deepomega (#22)

@EDaily Air BnB income is taxed. This is rent seeking, pure and simple.

vanderlyn (#2,954)

@deepomega On the part of whom?

deepomega (#22)

@vanderlyn Hotels. That is, any claim that taxation is getting lost is bullshit. It’s no different from restaurants trying to regulate food trucks – an entrenched economic entity is trying to protect its own income by blocking upstarts. Rent-seeking.

(Your comments below are certainly good reasons to consider regulation, although honestly, blaming the renters rather than blaming the causes of the housing shortage feels about short-sighted.)

vanderlyn (#2,954)

@deepomega Well, of course hotels are going to lobby to protect their interests. But in this instance, their quasi-monopoly is also good public policy. In any case, the presence of other ’causes’ (though I think causality here is extremely confusing and unclear) doesn’t make the behavior of these people any better, in the least. They are breaking laws that are in place for really good reasons!

vanderlyn (#2,954)

I have absolutely no sympathy for New Yorkers whose Airbnb income is threatened—particularly those who rent their entire apartment—and I hope they end up owing huge fines. It’s really very simple: In a supply-constrained housing market with tons of tourists, it’s always going to be more lucrative to rent space to transients than to residents.

I work in real estate, and I can assure you that if this continues, professional landlords will quickly shrink the arbitrage, at the expense of normal renters like you and me. If I rent an apartment to Jane and she re-rents the apartment to Adam for twice as much, it won’t take me long to cut out the middleman. Operating an apartment building as a vacation rental isn’t so hard; new consultants and service providers will rise up to make it more seamless for landlords, and annual leases will become both more scarce and expensive.

Turning attention to Airbnb renters who reside in rent-stabilized apartments, it’s hard to see their actions as anything other than completely immoral. These renters are paying below-market rents to begin with, which prevents supply and demand equilibrium, puts pressure on landlords faced with rising expenses, and raises everyone else’s rents. This is an incredible gift to these tenants; that they would use it as a profit-making opportunity spits in the face of all those with housing insecurity in the city.

It also makes a joke of a valuable program, implicitly threatening it.The more the landlord lobby can collect examples of rent-stabilized apartment abuse, the easier it will be to say, “This program is done, it’s obviously outlived its usefulness.” This is by and large incorrect, but never underestimate the power of perception.

Fuck Airbnb and their transparently self-serving lobbying effort, and fuck you if you’re pulling apartments out of the city’s stock in order to operate an illegal hotel.

honey cowl (#1,510)

@vanderlyn amen.

Cup of T (#2,533)

@vanderlyn Thanks for this response. I’ve used Air BnB in France, where subletting is illegal and leases are hard to obtain especially as a foreign. I found it to be a practical way to lease an apartment for a month or more, typically at the same rent the lessee pays their landlord (I would meet the person, ask to see a copy of their lease, and arrange to pay them directly rather than go through the site). You’ve highlighted a lot of troubling downsides to this system that I wouldn’t necessarily have thought of, and I’ll think hard before using Air Bnb in the future (and for what it’s worth, I now have a legal lease!)

City_Dater (#565)

@vanderlyn

Not to mention the neighbors who have to put up with the temporary tenants on vacation behaving like disrespectful jackasses.

I have no issue with people who have a spare bedroom and discreetly make it available for “paying guests” when they themselves are also home (like a real B&B, people!) but no sympathy for the people couch-surfing in order to rent out a whole apartment.

sea ermine (#122)

@City_Dater I actually have more of an issue with the spare bedroom thing. If you can afford a spare bedroom that you don’t actually use and then rent it to visitors through airbnb instead of to people who actually need a room to live in it just seems a little unfair. I think airbnb is best for situations when you happen to be going away for a week (say, for work, or to visit a relative) and so you rent it out while you’re away (but ultimately you’ll be back in a few days and it’s your home rather than a place you rent so you can rent it to others).

City_Dater (#565)

@sea ermine

The empty apartment with randos is it is a lot more obnoxious and potentially risky to the building at large than a person with an extra room who is home to monitor things. And presuming that anyone with an empty room who doesn’t “need” a roommate is an immoral moneybags is silly. I know a woman who owns her apartment, purchased many years ago when her financial circumstances were different (and places in her neighborhood were more affordable), who has had both long-term “roommates” and short-term vacationers renting her spare room.

Allison (#4,509)

@City_Dater Yeah, I bought a condo this year, and currently have a roommate, but when the time comes that she moves out, I’ll probably take a look at my salary/budget and compare potential roommates vs the airbnb option.

sea ermine (#122)

@City_Dater When did I say anyone was an immoral moneybags?!?! I amso so sorry if I upset you in anyway, that was never my intention! I believe the expression I used was “a little unfair”, and I’m so sorry if that came off as harsh or an attack in any way. When typing my comment I was thinking of the effect that airbnb has on the availability of apartment for city residents. In that case I dont think I was out of line in saying it might be better to rent it out to roommates rather than vacationers who, unlike someone living full time in a city, could stay in a hostel or hotel.

For the record, I would never look down on or attack someone who rented out a spare room either through airbnb or any other service. I just think that on the scale that could happen with a popular service like airbnb, it could end up being a little unfair if lots of people are renting out rooms to vacationers. I dont think that makes someone an immoral moneybags though, that seems a little mean to people who are probably just trying to make some extra money off a room they don’t need. I also agree that large amounts of people traipsing in and out of an apartment would be worse for tenants of that building, I was only thinking of the larger citywide impact something like this would have.

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