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NYC becoming a battleground for Air BnB apartment rentals

NYC becoming a battleground for Air BnB apartment rentals

Old Oct 21st, 2014, 04:56 AM
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NYC becoming a battleground for Air BnB apartment rentals

Recently Air BnB started an advertising campaign aimed at New Yorkers (not sure about other places) featuring a family that says they want the right to welcome visitors to the city - and make their income stretch further - by offering rentals through Air BnB. (The ads are careful NOT to specify if they want to sublet their entire apartment - which is NOT legal - or just rent out a room while they are in residence, which seems to be legal.) The ads have appear her on Fodors and also on our local 24 hours news station. Not sure where else but assume on tripadvisor and possibly other travel sites.

The authorities in NYC recently issued a report on Air BnB in NYC pointing out that there are numerous landlords who are illegally warehousing apartments as they become vacant and illegally renting them out to visitors to the detriment of the safety and quality of life of the buildings legal tenants, as well as taking more than 2,000 "reasonable" apartments - tracked so far , they know there are more - out of circulation at a time when the city is struggling to provide more affordable housing for poor and working families. In addition the city is concerned that these apartment do not meet transient fire and safety laws - as well as do not contribute the required transient taxes (about 18%) to city coffers.

Now there is reportage and apparently a counter ad campaign (I have only seem one so far) in which local residents (elderly and not well off) talk about how they feel unsafe in their buildings - which instead of housing long-term residents who form part of the building and city community - are a constantly changing group of strangers. A special concern is the number of strangers who now have keys or fobs giving them access to the building and how they might be used illicitly and/or passed on to others. (After all, Air BnB does not do background checks of all their members and in such a large group there are undoubtedly a number of miscreants - as shown by one group that completely trashed an apartment they rented and another group refused to vacate the apartment they rented.)

Separately, Air BnB has apparently been reviewing their membership lists of NYC, have removed some group offerings of several apartments and are considering doing so for other members that offer a number of apartments for rent , rather than just a single one.

Not sure how this will all shake out. But it's apparent that Air BnB may be starting to back down - and the authorities are determined to better evaluate the situation and alleviate the worst abuses.

Just something to think about for people who want to rent an apartment in NYC versus staying in a hotel.
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Old Oct 21st, 2014, 06:52 AM
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Thank you for posting this, nytraveler.

I follow this in the media and on other travel forums. I am surprised at how many tourists defiantly rent from Air BnB even though they are warned that most are illegal.
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Old Oct 21st, 2014, 07:10 AM
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How is that a report on Air BnB? Seems like a report on unscrupulous landlords. Crack down on them, eliminate them, but why pit yourself against Air BnB?
Old Oct 21st, 2014, 08:34 AM
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It's the existence of Air BnB that has encouraged the landlords to do this and they are doing it through Air BnB, which is knowingly supporting illegal activities through its service. Previously Air BnB released statements about changing the laws in NY to make this practice legal - apparently they have now given up on that idea.

Each landlord may be doing this with 8 or 10 apartments - its Air BnB that has thousands of listings. It is a business built on flouting the law here - and promoting others to do so.. Why should they not be held responsible for that?
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Old Oct 21st, 2014, 08:39 AM
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AirBnB is facilitating the illegals, that's why.

See: http://www.businessweek.com/articles...er-new-numbers

Notably: "The top earner in New York made $6.8 million—and sent $800,000 to Airbnb. There were 12 operations in New York that made more than $1 million over the course of the study. The top host controlled 272 units and brought in $6.8 million in rental revenue, accounting for more than 2 percent of total host revenue."

And: "The attorney general found that the 10 most-booked listings averaged 1,920 booked nights per year—or about 5.3 bookings per night each. "
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Old Oct 21st, 2014, 09:25 AM
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<It's the existence of Air BnB that has encouraged the landlords to do this and they are doing it through Air BnB, which is knowingly supporting illegal activities through its service. >

Yeah, no. By this logic, newspaper classifieds "encouraged" scams, Craig's List "knowingly" supports fraudulent listings, and so on.

Focussing on AirBnB is a distraction. Landlords who violate the terms of their ownership are the criminals.
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Old Oct 21st, 2014, 04:41 PM
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No - focusing on Air BnB is NOT a distraction.

Ye, this has been going on illegally for years - but on a much smaller scale. It the size, efforts and succes of Air BnB which has made them the largest play - and therefore the worst offender. the city has for some time been cracking down on local real estate agencies who helped landlords do the same thing - but it's been much more difficult - since a large part of their business was legitimate longer-term rentals.

Air BnB is the first large one that has focused solely on the tourist trade - and as you can see above has rapidly escalated the size of the problem. No - people should not be advertising sublets on Craig's list - but those one offs have limited effect (and many are, in fact, nonexistent - pure scams) so the damage was limited.

Air BnB is making it all more obvious and more egregious.

And I'm sure the attorney general will find a way to address this - despite Air BnBs self-serving advertising.
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Old Oct 21st, 2014, 07:36 PM
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Air BnB may be abetting the crimes, but they really are nothing more than a better listing service, and so far, their refusal to truly vet their listings has worked for them. I am sympathetic to the problem: as a condo board member, I would be incensed to find an illegal short-term rental in my complex, Air BnB or not. But I would take legal action against the owner of the unit, not the service he used to list his unit, because my legal, contractual relationship is with the owner. A large, powerful body such as the City of New York can pressure Air BnB to help fight the problem and threaten legal action if they don't, but I doubt they will succeed that way. We shall see, in any event.
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Old Oct 21st, 2014, 07:38 PM
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Btw, Air BnB has been in the vanguard of the sharing economy, and Silicon Valley is watching very closely. Do not be surprised to find intense lobbying from the tech world against restrictions on Air BnB.
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Old Oct 21st, 2014, 07:44 PM
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And just as intense lobbying by local authorities everywhere (re uber as well) because they are losing millions of dollars in TOT and sales taxes.

Even places that end up allowing them will find ways to regulate them. Then their cost advantage will evaporate.
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Old Oct 22nd, 2014, 01:09 AM
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This is one of those things that I think is age-related.

Younger people accept the premise that Air BnB, Uber, and the like are simply online markets which facilitate exchanges between individuals who control a commodity and individuals who need that commodity. In this view, AirBnB is only an online version of all those homeowners in Croatia who greet arriving travelers with signs offering rooms in their houses.

The problem with this is that you can assess a potential renter when he approaches you at the bus station and choose another if you have negative feelings. Online services are different.

The companies in general equate their business models with the utility model that absolves, say, Tumblr from responsibility for the porn transactions that are facilitated by its software. If a user publishes nude photos, he is responsible for it, not Tumblr. If you accept a ride from Uber or rent a room through Air BnB, that is a transaction between you and the supplier; Uber and AirBnB are just software utilities.

This is an emerging area. Like janisj, I think we are only at the beginning of a long period of regulatory and legal activity to protect lives, consumers, and revenue streams!
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Old Oct 22nd, 2014, 04:58 AM
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Agree that the Air BnB model has been wildly successful. But it will end up being regulated in some places due to local conditions (if it's a place that does not have a severe shortage of budget/moderate housing it's not such an issue).

But in the long run - at least in NYC - they will have to modify their model or end up with solutions that may severely restrict their business.
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Old Oct 22nd, 2014, 05:25 AM
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It's a great idea but obviously has turned into something more than what it was intended to do. It sounds like there are serious rental violations and sounds like the city is starting to take notice. Of course, the fact that the city is losing millions in tax revenues possible has something to do with them taking notice.
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Old Oct 22nd, 2014, 07:51 AM
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<Of course, the fact that the city is losing millions in tax revenues possible has something to do with them taking notice.>
Yes.
But.
What tech lobbyists will be pointing out is that crushing innovation will lead to a longer-term and ultimately larger loss of tax revenue, particularly if a city is seen as hostile to innovation. (They will also point out that housing regulation in NYC is an unmitigated disaster, as a way of arguing against more such regulation.)

The trick will be regulating in such a way as to protect consumers and property owners while allowing Air BnB to continue to thrive.
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Old Oct 22nd, 2014, 08:08 AM
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I just put this on the Lounge site:

According to the State Attorney General Eric Schneiderman 72% of Air B&B rentals in NYC are illegal. They're run by large scale operators.

http://www.nytimes.com/2014/10/16/bu...ends.html?_r=0
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Old Oct 22nd, 2014, 08:25 AM
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I'm not sure that anyone is that interested in protecting landlords (which is a curse word in NYC due to an enormous history of landlords accepting tax benefits from the city in building or upgrading their properties and then charging tenants illegal rents that much higher than those mandated by the agreement under which they accepted the tax abatements). This activity with Air BnB is only apart of that - since landlords prefer to rent illegally short-term to visitors rather than rent to locals under the regulations under which they accepted abatements.

So - the ones that need the benefits are the current residents of the buildings (whose safety and security is being compromised by the landlord's illegal actions) and the city residents who can't find a rental at a reasonable rent since the landlords have illegally pulled the apartments off the market and the city residents who are paying higher taxes tht support the abatements to the landlord.

I won;t argue about NYC rental policies. The simple fact is that if landlords want to charge any rent they please they can do so merely by building or rehabbing the buildings without taking the city tax abatements. Almost non opt to do this (except for luxury buildings) and the others opt to take the abatements and then proceed to charge illegally high rents. (I understand the process - was victim of such a landlord - who I had to take to court for a rent reduction. He had charged me more than $8K more than allowed while I lived in the building for only about 3 years - and we found out he was doing the same to almost every other tenant.)
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Old Oct 22nd, 2014, 08:25 AM
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I read that article last week. Note that it says that San Francisco appears close to legalizing AirBnB, with restrictions. That is, IMO, the way to go.

Let's cast our minds back to pre-Internet days. If it had been found that 72% of For Sale listings in the newspaper were fraudulent, would the city go after the newspaper?
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Old Oct 22nd, 2014, 12:16 PM
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NewbE - I don't think that your comparison of Air B&B with a newspaper really makes sense. However, it wouldn't be a bad idea in that the newspaper would then have to vet the "for sale" ads that they make money from. Air B&B obviously doesn't care who puts their property up for short term rent under them as long as they are making money.
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Old Oct 22nd, 2014, 12:45 PM
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<Air B&B obviously doesn't care who puts their property up for short term rent under them as long as they are making money.>
I think that's true. So what I'm saying is, NYC can try to treat Air BnB like a realty agency and hold it responsible for the listings it carries, which would require some legal wrangling to classify it as such; or it can go after the landlords who are breaking laws that are already on the books and enforceable.
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Old Oct 22nd, 2014, 12:46 PM
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Upon further consideration, I am also saying that if were a New Yorker, or someone who lives in a city where there are a lot of illegal AirBnB listings, I would press my elected officials to do the latter rather than the former.
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