THREE-QUARTERS OF AIRBNB RENTALS IN NYC ARE ILLEGAL

FOR IMMEDIATE RELEASE
October 16, 2014
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NEW REPORT BY NYS ATTORNEY GENERAL SHOWS NEARLY THREE-QUARTERS OF AIRBNB RENTALS IN NYC ARE ILLEGAL

Report exposes new information about Airbnb’s illegal activity and who’s profiting at the expense of affordable housing for NYC residents

Commercial operators dominate short-term rentals, with just six percent of hosts controlling more than a third of all rentals and revenue generated

Just three Manhattan neighborhoods account for 40 percent of all revenue while Queens, Staten Island and the Bronx account for less than three percent of NYC total

New York – Today, New York State Attorney General Eric Schneiderman released an extensive new report showing that nearly three-quarters of Airbnb’s rentals in New York City are illegal, violating zoning or other state laws. The report analyzes Airbnb bookings from January 1, 2010 through June 2, 2014, and exposes alarming data about the extent of Airbnb’s business practices and revenue generated from the mostly illegal use of long-term residential housing units as short-term rentals.

Key findings highlighted in the report include:

  • 72 percent of Airbnb units in NYC are illegal and in violation of state law.
  • Revenue to Airbnb and its hosts from short-term rentals in NYC is expected to exceed $282 million this year. Airbnb rentals grew ten-fold during the review period and associated revenue nearly doubled each year.
  • Commercial operators (not everyday NYC residents) make up 6 percent of all hosts but supply more than a third of the units (36 percent) and generate more than a third (37 percent) or $168 million of all host revenue.
  • More than 100 commercial users each controlled 10 or more unique Airbnb units, accounting for over 47,000 reservations and earning nearly $60 million.
  • The highest earning Airbnb host controlled 272 units, booked over 3,000 reservations, charged an average of $358.19 a night, and received $6.8 million in revenue.
  • The top 12 NYC commercial hosts earned more than $1 million each.
  • In 2013, more than 4,600 units were booked as short-term rentals through Airbnb for three months or more of the year. Of these, nearly 2,000 units were booked for 6 months or more of the year, rendering them largely unavailable for use by long-term residents.
  • A dozen buildings had 60 percent or more of their units used as rentals for at least half the year, suggesting the buildings were operating as de facto hotels.
  • Just three Manhattan neighborhoods – the Lower East Side/Chinatown, Greenwich Village/SoHo, and Chelsea/Hell’s Kitchen – account for 40 percent of host revenue or $187 million, while ALL reservations in Queens, Staten Island, and the Bronx account for just 3 percent or $12 million of total host revenue in NYC.

The full report can be viewed at: http://www.ag.ny.gov/pdfs/Airbnb%20report.pdf

Please see below for two news stories about the report:

The NY Times story can be read here: http://nyti.ms/1De69v1
The NY Post story can be read here: http://nyp.st/1peQ401

Statements By ShareBetter Supporters On The Attorney General’s Report

Manhattan Borough President Gale A. Brewer said:

“Attorney General Schneiderman should be thanked for revealing the truth about AirBnB. Allowing thousands of instances of illegal activity until they get caught, and then arguing that the laws should be changed reveals AirBnB’s arrogance– and no amount of expensive PR doublespeak can hide it,” said “The housing market in New York City is already fragile enough without AirBnB coming into town to make the affordable housing crisis worse by taking available housing units out of circulation. And that’s setting aside the health, safety, and liability issues for visitors using AirBnB and the neighbors who thought they were living in an apartment building, not a Holiday Inn.”

NYS Senator Liz Krueger said:

“It is no wonder that Airbnb fought to keep this data in the dark, because the picture it paints is clear: nearly three quarters of Airbnb’s New York rentals are illegal, and commercial operators account for a large portion of its business. Airbnb’s business model seems to be to ignore the law and spend huge amounts promoting slick ads and cherry-picked statistics, telling a story about their business that, at least here in New York, doesn’t match the reality. In the long term, that just doesn’t seem like an sustainable, ethical, or serious way to run a business. Airbnb needs to figure out how to run their business in a way that’s consistent with the law, that doesn’t enable illegal hotels, and that doesn’t put their users in danger of eviction or worse.” (Senator Krueger was the Senate sponsor of the 2010 legislation to clarify the law against illegal hotels).

Assembly Member Richard N. Gottfried said:

“Airbnb’s cheery ads that show people having lovely brunch with their ‘guests’ hide an ugly reality that Attorney General Schneiderman has documented,” “Illegal hotels violate fire and safety codes, make life a nightmare for law-abiding neighbors, and rob the City of urgently needed housing.  Strong enforcement by Attorney General Schneiderman and Mayor de Blasio will be a big step ahead.” (Assembly Member Gottfried was the Assembly sponsor of the 2010 legislation to clarify the law against illegal hotels).

Jaron Benjamin, Executive Director of Met Council on Housing said:

”The Attorney General’s report exposes the dark secret of Airbnb’s dangerous threat to affordable housing and neighborhood stability. Not only is the illegal hotel industry fueling the housing crisis and jeopardizing public safety, it’s also a slap in the face of our existing rent regulations. Our local government must enforce the laws that are already on the books to make sure that our affordable housing stock isn’t further decimated.”

NYS Assembly Member Linda B. Rosenthal said:

“The facts are clear: Airbnb is breaking the law and bringing home massive profits while playing a key role in the loss of affordable housing for hard working New York families. Attorney General Schneiderman’s report has cast a light on the dark side of the ‘sharing economy’ that we already knew existed, the one in which everyday New Yorkers are pushed out of the city while Airbnb and unscrupulous hosts share massive profits. Airbnb’s behavior is indefensible, and no amount of money spent on ads, public relations experts or slick lobbyists can change the fact that Airbnb is breaking the law and hurting New Yorkers in the process.”

NYS Senator Brad Hoylman said:

“I applaud Attorney General Schneiderman for exposing the extent of the illegal hotel market in New York City. The data shows that hundreds of shady landlords are taking residential units off the market to rent to tourists, thereby reducing our precious stock of affordable housing and driving up apartment prices.”

NYC Council Member Helen Rosenthal said:

“The Attorney General’s report makes clear that as Airbnb continues to grow, our city’s affordable housing shrinks exponentially. Airbnb and their hosts take profits while ignoring NYS laws, putting the safety of neighbors at risk (e.g. regular turnover of guests) as well as the tenants who is at risk of losing their lease because they are renting illegally. If nearly 75% of any business were operating illegally, they would be stopped and so should Airbnb. Airbnb puts at risk thousands of units of affordable housing that our residents desperately need. To meet this crisis head on, I’m continuing my call for the Mayor to expand the Office of Special Enforcement to get more investigators in the field and justice for the growing number of harassed tenants.”

NYC Council Member Brad Lander said:

“The Attorney General’s report reveals that nearly three-quarters of Airbnb listings are illegal, violating our zoning, illegal hotel, or rent regulation laws. In addition, many rent regulated units are being permanently and illegally converted into hotel units, diminishing the already-scarce supply of affordable housing for New York City residents. This report should be a wake up call to strengthen enforcement and address Airbnb’s violations of state and local laws.”

NYS Assembly Member Deborah Glick said:

“Air BnB may consider itself a part of the sharing economy but this new report by the Attorney General demonstrates how selfish it actually is. The results are appalling but do not  come as a surprise to anyone who has seen the first hand impact of illegal hotels. This report ends the debate. Air BnB is hastening the demise of affordable housing across New York City. This must be stopped.”

Jonathan Westin, Executive Director of NYCC said:

“We are grateful that the Attorney General is taking serious the haphazard and illegal practices that Airbnb employs. Tenant’s across the city are facing huge increases in rent, while several large Airbnb hosts are evading the law and making millions illegally, driving up the cost of rent for all of us.”

Michael McKee, Treasurer of Tenants Political Action Committee said:

“The Attorney General’s report makes clear what many already know: that far from being the benevolent innovator that its advertising claims, Airbnb is a threat to public safety, neighborhood stability and affordable housing. The City must step up enforcement of the laws that are already on the books to stop the illegal hotel industry from further decimating our shrinking stock of affordable housing.”

Marti Weithman, Director, Goddard Riverside’s SRO Law Project said:

“The Attorney General’s findings that 3/4 of all Airbnb rentals in the City are illegal confirms the detrimental impact that illegal hotels and Airbnb’s billion dollar business have on our City and their role in exacerbating our housing crisis. This report exposes Airbnb’s false claims that most of their hosts are just trying to make ends meet – it’s just not true and now we have the data to prove it. We hope that the Attorney General’s findings lead to increased enforcement and stronger regulations to ensure that illegal hotels and this type of business model do not continue to destroy our communities and deprive New Yorkers of desperately needed affordable housing.

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