Airbnb Faced the City Council and No One Baked Welcome Brownies

Airbnb officials went head to head with City Council members at a committee hearing Tuesday morning, defending the right of its hosts to rent out their apartment even if it breaks New York State law.

The morning started with a rally of more than 100 protestors, organized by the Share Better coalition. Employing more traditional methods than , the coalition gathered in front of City Hall to show their opposition to Airbnb and other short-term rental websites. Before regrouping for the hearing inside, several city officials joined the protesters in criticizing Airbnb for taking tax revenue from the city and business from traditional hotels. But mainly they railed against the sites for not cracking down harder on hosts who abuse the short-term rental system. The illegal practice of owning or leasing apartments for the sole purpose of renting to tourists contributes to the city’s lack of affordable housing, they said.

“Illegal hotels are not just a problem in Manhattan. With the demand for tourism in the outer boroughs, they are becoming an issue there as well,” said Antonio Reynoso, City Council Member for District 34, which covers Bushwick and Williamsburg.

“Illegal hotels give unscrupulous landlords an incentive to drive up apartment prices and drive out longtime residents,” added New York State Senator Brad Hoylman, who represents the East Village, West Village and Hell’s Kitchen. Some landlords even harass tenants in rent-controlled units, an issue that Manhattan Borough President Gale A. Brewster expanded on during the hearing. “The greatest problem is the threat to tenants by owners who hope to vacate as many units as possible to then be used as illegal hotels,” she said. “Over the years all of us have all encountered cases where owners harass tenants or refuse to renew leases all in an attempt to clear out units for use as illegal hotel rooms.”

In an effort to better understand how the city is attempting to take control of the illegal hotels issue, council members spoke with Elizabeth Glazer, head of the Mayor’s Office of Special Enforcement, a department of 12 people who respond to 311 complaints regarding short-term rentals. She said that within 24 hours to two weeks (depending on the urgency of the call) a building inspector goes to the residence in question to see if there are any violations. Building owners face a fine of $1,000 for a first-time violation or up to $25,000 for repeat offenses.

The Office of Criminal Justice has brought civil law suits on two illegal hotels, Smart Apartments and City Oasis, but city officials said the office should be doing more. “I would argue that’s part of the problem, that it’s more of a reactive group than a proactive group,” said New York Senate Assembly Member Linda B. Rosenthal, adding that while some people may call 311 to complain, many violations are left unchecked because residents don’t want to speak up or don’t know who to call.

To use a more proactive approach (for example, searching listings on Airbnb and other sites for blatant violators) would require a different skill set than her unit has traditionally employed, said Glazer. “This unit was created for inspection,” she said. “It’s gone well beyond its inspection function by bringing litigation against landlords and others involved in this business, but it is not an investigative body.”

The issue is complicated by the fact that in 2010 (before Airbnb was the multi-billion dollar company it is today) New York State passed a multiple dwelling law that prohibits the use of apartments for stays of less than 30 days unless the host resides in the apartment at the same time as the paying guests. This means that technically you’re breaking the law if you want to rent out your one-bedroom apartment for a week while you’re on vacation — the logic being that if you only have a one-bedroom apartment, and you’re renting it out, you could possibly be living elsewhere and using the apartment for Airbnb guests exclusively. A 2014 investigation by the New York State Attorney General found that 72 percent of the private units used as short-term rentals on Airbnb violated New York State’s multiple dwelling law and/or the New York City Administrative Code.

David Hantman, head of global public policy for Airbnb, refuted that number at the hearing, saying Airbnb has removed many illegal operators from its site since that report came out. Jumaane D. Williams, chairman of New York City’s Committee on Housing and Buildings, asked what Hartman believed an accurate number would be, to which Hartman replied that Airbnb doesn’t keep track of those figures.

Yesterday, Share Better released new data gathered by an independent software products expert indicating that Airbnb had 15,304 “entire home/apt” listings in November of 2014, up from just 12,926 the year before. The number of users renting out two or more units also grew, by about 700 users to 2,764 users.

Williams questioned why the site hadn’t gathered data about illegal hosts. “Isn’t that what a responsible company would do?” he asked. Hantman said that Airbnb is committed to removing large illegal hotel operations from its site but doesn’t believe people in single occupancy homes should be penalized for renting it out for a few weeks a year. The vast majority of hosts, even the ones who are out of town while guests stay at their homes, are responsible people who thoroughly vet their guests, he said. He added that Airbnb allows for tourists to stay in neighborhoods that lack traditional hotels, and the visitors help boost the local economy when they spend money at local businesses.

“What we’re trying to do is focus on whether that should be against the law,” Hartman said. “When that 2010 [multiple dwelling] law was passed, the public was promised that those people were not the subject of the law, yet now we see every hearing involves all of those people, not just people doing this as illegal hotels.” He said lawmakers had good intentions when they passed the law, “it just went a little bit too far, as I thought people acknowledged at the time.”

Council members disagreed, saying the law is the law and Airbnb should care more about whether hosts are renting their apartments legally. They also brought up the subject of people who are “duped” into breaking their leases by hosting Airbnb guests, putting them at risk for eviction, to which Hartman responded that Airbnb makes every host acknowledge that they have read their lease and are not violating it by allowing tourists to reside in their home.

Airbnb supporters like Joshua Greenberg and Karen Wight-Greenberg showed up at the hearing to defend the website, saying it has allowed them to live in New York City when they wouldn’t be able to afford it otherwise. The couple has two children and has been renting an extra room in their Flatbush condo for three and a half years. They say the experience has enriched their lives, as well as their bank account; they host guests for about 75 percent of the year, which they say amounts to about one-sixth of their income. Of course, what the Wight-Greenbergs are doing is perfectly legal; they have three bedrooms and live in their home year-round.