Air Bnb Declared Illegal in NYC
 

We had a lot of discussion of Air BnB at times in these forums, particularly as it relates to New York City, where sublets of less than 30 days are illegal. Well, a court has now declared that Air BnB cannot operate legally in NYC because of this law. Here's a link: http://tinyurl.com/kzs2dql

Since this is now a court order (it will almost certainly be appealed, but I have no idea if the company will win), I suspect the site will have to take down all NYC listings, at least for now.

Are there other states that have the same law?

Other than Paris (which has the same law as NYC, though it is widely flouted), I'm not aware of any city that has these kids of laws, but San Francisco is considering something.

It's still not clear to me what precisely will happen in the near term here, but it's clear that the court has indicated that AirBnB rentals are illegal here.

I should have been a bit clearer. The court did not order that AirBnB must take down all NYC listings, but since all AirBnB rentals are now officially in violation of NY law, I can't see many other options.

It was only a matter of time. And with an increasing number of legitimate tenants making complaints about transients I think the illegal sublet market is going to be dicier and dicier.

Frankly, I always felt Air BnB was dicey, and would never use it.

" but since all AirBnB rentals are now officially in violation of NY law, I can't see many other options."

Well, actually they have been in violation of the law since the law was enacted. AirBNB has been lobbying to change the law so now someone is saying to their face that they're illegal whereas before they would claim ignorance. Of course how and why would they bother fighting the law if they didn't think it was against them? And the other listing sites are equally aware, but you don't see them taking down their listings

I'm not sure if the ruling affects all of AirBNB's rentals, including "hosted" ones. Any details on that aspect?

"Hosted" is still illegal. One is not allowed to sublet or rent apts for less than 30 days in New York.

You can have family or friends to visit FOR FREE - but if money is changing hands it is illegal (unless this is house wholly owned by the renter who wishes to rent a room - NOT a multiple family dwelling.)

And the instance of that situation in Manhattan is VERY small. Most people who own a $5 million plus townhouse don't want to rent out a spare bedroom and have strangers tramping around their house.

Actually hosted was NOT always clear as it is not a case of "sublet or rent apts " The bigger issue there is the building management or board not allowing it. And though I agree that most people in fancy buildings don't want to share an apt with a stranger, there will always be some who do. You may "own" a $5 million townhouse, but still have huge mortgage or other expenses. Not to mention people who just like the concept of having visitors, even if they're paid ones.

<Not to mention people who just like the concept of having visitors, even if they're paid ones.>
This is a surprisingly large facet of AirBnB's success.
It's also the case that some people have a garage apartment, or an apartment over their business, or a second apartment in the same building that they are happy to rent out. Granted, this would be rare in NYC, but it explains how people are comfortable renting to strangers, given that they are not literally sharing this personal living space.

This is the sort of question that arises normally only for large cities with densely packed populations. When people live cheek by jowl like that, chances for friction arise exponentially.

For those in the rest of the country who own their own homes and don't have condominium/apartment associations dictating their lives, these frictions don't arise.

In this case, the finding of the Administrative Judge, apparently a lawyer practicing Environmental law in New York, that "boarders and lodgers" couldn't be "strangers" with no "relationship" with the residents is a bit odd.

After all, if a person rents out his apartment for more than 30 days - apparently legal in NY - then this "boarder" or "lodger" could be a "stranger" with no "relationship" with the residents.

Or maybe it was that the people who rented from Warren didn't speak with him nor with his roommate, so they were "strangers". The cautionary tale then would be that someone in the household exchange some words with the potential airbnb renters, then these renters wouldn't be "strangers" any more.

Sorry, I don't get it. But then I don't live in New York, cheek by jowl with my neighbors and governed by arbitrary condo "laws".

This is just another shot fired in this controversial area and relates only to airbnb in NY, not elsewhere in the world where apparently it's pretty successful as well. I've not used airbnb overseas as I prefer local resources in country. I have used airbnb a couple of times in the US but only in the West and have found the hosts/hostesses to be more than acccommodating and friendly. Absolutely no problems.

"Boarders" and "Lodgers" by definition have a "relationship" with the landlord.

Not necessarily. There are plenty of hi tech - techies in particular - people who have to go on a temporary overseas assignment and so sublet their room/apartment/house to someone else without ever exchanging a word with that person. Sometimes the roommate handles everything. If it is an apartment/house, then a neighbor or a relative may be handling all matters.

There's no "relationship" whatsoever in situations like this, but if it for over 30 days, it's legal in NY.

Tabernash: you need to elaborate a bit more on your perennial one-liners without always being afraid of what would happen if you wrote more than one line.

"Sorry, I don't get it. But then I don't live in New York, cheek by jowl with my neighbors and governed by arbitrary condo "laws". "

This ruling and the law behing it have nothing to do with condo or coop law. In fact even before this law was enacted, most condo or coop boards had very strict rules about letting someone stay in your apartment for pay, whether for 2 days or for 2 months. My building wouldn't allow it for 31 days even though that's "legal".
Rental apartments are also subject to whatever rules (unless illegal, like discrimination)the landlord puts in your lease. Most rental places do not want or allow short term sub-rentals but this is less strictly enforced since the owners don't necessariuly live in the building and know what's going on , And if a renter gets thrown out, he usually just finds another rental. Being thrown out of your coop or condo is a much more serious problem.In a coop or condo, everyone who lives there is an owner so for better or worse(a little of both actually) things run differently.

My problem with AirBNB is that they clearly knew that a portion of their listings were inherently illegal, yet they allowed them to be listed . This wasn't an obscure law in Croatia that no one had ever heard of, but a well publicized hotly debated topic. The fact that they continued to allow it (and without any specific disclaimer) tell me something about the ethics of the company, and in my opinion hints at the type of service you might get if you have a complaint. It's not a company I would choose to do business with.

It's by no means just condos and coops.

Most landlords have very strict requirements to rent an apartment long-term - and the other residents of the building have a right to safety and security of tenants who have met the requirements of the landlord - or are friends or relatives that these people know and are responsible for. Not random strangers wandering in and out of their personal residence.

Croatia is set to join the EU in slightly over a month. By then it will have in place many "obscure" EU laws. :)

nyer, I understand your making a distinction between public law and private covenants.

We've been through this before, several times. It's always with NY. (I mean "we all" not you and me)

I don't understand why you have a problem with airbnb listing places for rent in NY while the meaning of the public law was being debated.

If a tenant or an owner breaks a private covenant with a condo association/renting agency, that's one thing. However, this controversy over the NY city public law is another matter.

This decision was based not on the breaking of a private agreement but based on this particular judge's interpretation of public law.

All I'm saying is that this isn't the end of the matter. It's a lot more complex than it seems and for some NYers to blast airbnb for everything it's doing is to apply the NY situation to the rest of the world.

Easytraveler, I don't blast AirBNB for everything,I just said I don't like the way they do business including overlooking illegal activity that they are completely aware of.

"I don't understand why you have a problem with airbnb listing places for rent in NY while the meaning of the public law was being debated. "

My understanding is that the law existed and it was being willfully violated. The only debatable parts are that 1) some people don't think the law is just , that it punishes people who just want to earn a few extra bucks, so they fight to have it overturned or narrowed . I have no objections to trying to change a law, but respect it while it is still standing.
2) The "hosted" situation covered by this legal action might be a gray area. The judge decided that it is covered by the law. But there was no gray area about unhosted apartments, and AirBNB and others have continued to advertise those, too.
To me, and I've said it's an opinion, that indicates a business model I find unappealing, even if the majorityy of their operation is above board.

I'm not sure that the law itself is the best solution, but I still won't support companies that violate it. And when something is illegal, people may get caught in a scam or dangerous or unpleasant situations with no recourse.

FWIW, many condo associations across the US prohibit short-term rentals. Mine does, with the definition of "short-term" being anything less than a year. The problem I have with AirBnB is that they dissociate themselves from anything that may go wrong with a rental with a big disclaimer, even though they know that some percentage of the listings are illegal. I just disapprove of the business model, which places the majority of the risk on the lessee, the rest on the lessor, and none on the company that brought them together.

nyer: I didn't say you were one who blasted everything airbnb does, but there have been several recent "articles" which have nothing good to say about airbnb based solely on what is happening in NY.

<i>My understanding is that the law existed and it was being willfully violated.</i>

That may be your understanding but whether it is being "willfully violated" is still a question. There are apparently two pertinent sections (we've been through those two sections on this forum) and the two sections are not entirely clear. That's why there is controversy. That's why some people interpret it one way and other people interpret it another. That's why some people don't feel like they are "willfully violating" that law and others feel like they are. So, it's not as if there's absolute clarity and that all or most people can agree on what it means.

Again, I disagree with you on the "hosted" versus "unhosted". If the renter stays for over 30 days, even if it's unhosted, that's legal (provided there are no private covenants being violated). That 30-days or more part of the law is not in controversy. The host could be in residence or the host could be in Timbuctoo, but as long as the renter is staying for 30 days or more, that's legal.

It's the under 30 days portion that is in controversy. Because space is at a premium in NY and landlords or sellers can command high prices, friction will develop over whether a renter/owner can rent out/"sublet" his room(s)/apartment for less than 30 days or not. Those who want to have fairly decent dwellings or not have a long commute or want something else will say that they can rent out for less than 30 days. Those opposed, like the hotels, will say they can't. This one decision by one judge will not end the controversy.

As for criticism of airbnb's business model, the new technology has generated new ways of doing business. In this respect, IMHO, Facebook has KNOWING violated a number of laws. I find that much more distasteful.

Sorry, that's "knowingly"

The only one "debating" the meaning of the law is Air BnB. The state and city knew clearly what the law meant, as did most local residents.

Now a judge has clearly ruled that Air BnB is acting illegally. So - this judge isn't good enough? How many more judges do we need? How many more residents have to make complaints? Do we need to take this to the supreme court?

Air BnB can do whatever they want elsewhere. In NY the rentals they are offering are illegal - and they should just stop doing it. And people renting through them need to understand that what they are doing is illegal - and they have no recourse if they are not able to use the property they "rented".

Sometimes we all just have to follow the rules - even if we don't like them.

I'm just wondering how you all feel about "escort" ads on Craigslist?

Escort ads really have nothing to do with a travel board.

But comparing disguised ads for prostitutes to disguised ads for illegal rental is a fair comparison.

That's my point.

You'll forgive me but you're taking me way out into the wilderness. I know nothing about "escort" ads, etc.

So, back to the topic.

nytraveler: you ask good questions but there isn't a way that most people can answer your questions.

First of all, if a law is poorly written, then it can be challenged. How many lawsuits? A few, many - it's up to the lawmakers to remedy a law that is unclear.

People can take issues up to the Supreme Court and the Supreme Court can make a ruling, but that ruling can be overturned by Congress/other lawmakers. All the Supreme Court is saying is that the law appears to say such or so.

IMHO, this doesn't affect only airbnb, although it is probably the "biggest" entity affected by this law. Let's say a Mom and Pop live somewhere and while their son is away, they want to supplement their income by renting out the son's room. It used to be that people advertised in the local newspaper, posted the room in a public laundry, etc. - very "primitive" types of advertising. Today they use airbnb or Craigslist or a college website. These are the people who are affected also.

There are also the smaller B&Bs in New York who will be affected.

It's those with the big guns - the hotels, the condo associations - who tend to have a lot of say, but their say may not always be "right".

<<<People can take issues up to the Supreme Court and the Supreme Court can make a ruling, but that ruling can be overturned by Congress/other lawmakers. All the Supreme Court is saying is that the law appears to say such or so.>>>

Well, except for this bit of mumbo-jumbo, I agree with you :-)

As far as I am aware there is no one filing lawsuits challenging this law. AirBnB did a lot of complaining and saying they wanted to "work with the city" but that just meant they wanted to be left alone.

Now that there is a specific ruling against them - they would have to challenge it legally. I can't imagine they will do so - they prefer simply to ignore the law and hope they will get enough naive people who will rent not knowing it's illegal.

I don;t see Air BnB rushing to challenge the law (since they know they will lose) - not would they take it to the supreme court (which I can't imagine would listen to something so local and without any sort of constitutional issues involved).

Just saw further information about this on the local news this morning.

The city has now established a task force which is investigating web sites offering these illegal rentals with the goal of identifying and fining those people renting apartments illegally. The fines for initial convictions range from $800 to $2400 and they can increase from there to up to more than $20,000 for multiple infractions.

Also the city 311 system is now being offered for use by legal residents who are aware than others in their building are illegally subletting. This is especially important for buildings in which the miscreant may be the landlord. For co-ops and almost all condos the board will take action, ranging from fines, to changing locks at the cost of the illegal renter, to act to rescind their residence in the building if they are repeat offenders.

New Orleans has laws on the books prohibiting short term rentals too but I'm not certain if that was just for the Quarter.

Good riddance, air bnb. What a lousy idea you were.

So, if I have met my prospective landlady socially, for dinner, say, it is legal for her to rent me her spare room, but if I have only met her over the internet (on Fodors, say) it is not?

I can understand landlords having clauses against sub-letting, and, although with much more difficulty, condo associations having similar requirements, but to have laws telling owners what they can do inside their own property is just ridiculous. I thought the US was supposed to be the land of the free. This is just to keep the hotels happy.

No doubt these laws are driven by the hotel industry, but why not? Tourist dollars support many city services.

Also, these laws protect the consumer from staying in unsafe dwellings that might not be up to code. And of course, these laws protect the consumer from fraud.

I don't see a downside to this law, thursdaysd.

I'm just as much a tourist spending dollars if I'm staying in a private house as in a hotel, and the profit from the rental will also be spent in the city, as opposed to going to a corporation based elsewhere.

How often are hotels inspected for safety? I would have had an easier time escaping the apartment I stayed in in NYC in case of a fire than I would have done the hotel.

And what about the acccomodation taxes that are not being paid by these illegal short-term rentals?

AIRB&B is curious to me. Like 'couch surfing' it sounds like a wonderful idea. AND if it is illegal, go to Hoboken. Rules, schmules.

thursdaysd -

These laws apply only to multiple dwellings - apartment houses. The do no apply to one or two -family houses (in which the owner has the right to do as they choose). However, two family houses are essentially unknown in Manhattan and single family houses are so expensive (anything under $5 million is almost unknown) that the owners are not likely to want to rent out rooms to strangers - although a small number do. There are a number of two-family houses in the outer boroughs - but they are typically not areas tourists would want to stay in - being too far from tourist sights in Manhattan.

As for condos and co-ops - the rules and regulations established by the other owners are made perfectly clear to potential buyers before the purchase - and if they don;t want to abide by them they don;t have to buy the apartment.

And it is a complete fiction that these laws are being driven by the hotel industry. Unlike many other places in the country in NYC the occupancy rate for apartments and condos/co-ops is almost 100%. People trying to buy condos or co-ops often find they have to pay higher than original asking price due to bidding wars. The issue with apartment rentals is that the landlord can make more money renting by the night to tourists (illegally) than to a legitimate local tenant on a 1 or 2 year lease - due to rent regulations. Some landlords are doing this and it is making the apartment shortage for locals worse.

The issue is nothing to do with hotels and everything to do with the shortage of housing - especially affordable housing - in NYC. (Typically the only places on the market for any length of time are the ones at the top of the market since most people can't afford apartments that rent for $10,000 a month or sell for $10 million.

The issue is nothing to do with hotels and everything to do with the shortage of housing - especially affordable housing - in NYC.

Says you. I would say the issue is more complex and multi-faceted than this.

Doesn't change the reality of the law. And these aren't 'rules' like those in a basketball game, 12345. This is the law. However, you do make a point in that New Jersey has no such laws and anyone can rent there for short term stays.

So, I need some clarification.

First: If a multi-family building in New York City does not have its own regulations against temporarily letting a room or apartment, it is none-the-less illegal, is that right? That is still the law telling people what to do on their own property.

Second: is this just a matter of a room, or of a whole apartment? I once rented an apartment for a weekend in New York, but not from airbnb, and I see that vrbo.com still has many apartment listings in New York. What's the difference?

nytraveler - it seems that your issue is with landlords, but in the case of airbnb one is usually renting from owners or tenants, not landlords.

"I once rented an apartment for a weekend in New York, but not from airbnb, and I see that vrbo.com still has many apartment listings in New York. What's the difference?"

There is no difference. Whoever rented this apartment to you in NYC for a short term stay was breaking the law.

I stayed in an apartment in Long Island City. The couple who rented it to us are the owners of the building. I asked her if it was legal, and was told that it was. According to some posters here, it was illegal as the duration was less than 30 days. This apartment was listed on VRBO and AirBnB.

nelsonian, When you asked the owner, did you really expect her to say it was illegal!?!

If it is a multi-family building (apartment house) then city rent regulations apply. This limits what landlords can legally charge for many apartments - especially affordably priced ones (less than I believe $2500 per month). If a landlord has an apartment become vacant with a legal rent of $1500 per month (based on the landlord beneftting from tax abatements to encourage middle class housing) he can make more money renting it out at $150 per month to tourists ($3K per month even if he rents it out only 20 nights per month). This is illegal - since in accepting abatements the landlord has contracted to rent the apartment long-term at rents based on the annual increases approved by the Rent Control Board. If you see a building with many apartments for rent it is likely this is what going on.

Another option is a landlord that does a co-op conversion and for some reason can't complete it and sell the apartments (if everything doesn't comply with safety and fire rules & regs the builder can't get a C of O) and without appropriate legal measures, including a sizable reserve fund, he can't sell the apartments - since no bank will give a mortgage on them. In that case he may sublet them short-term illegally (a couple of years ago one poster here apparently ran into this situation).

And I'm sure the owners would simply lie to be able to rent the apartment. Many people probably don;t really see this as a crime - and until the city enforces more frequently will probably continue to break the law.

And this has nothing to do with AirBnB - it applies to any company or individual illegally renting their apartments - including VRBO - if it's a multi-family building.

Again - the rental situation in NYC is unlike the rest of the country - and has been heavily regulated since WWII - when there was a huge housing shortage and a number of laws were instituted to prevent landlords from unfairly enriching themselves due to wartime conditions (laws similar to those in many other businesses at the time). They have continued in NYC since, except for a few years, we have had a housing shortage (except for the highest price ranges) here.