Airbnb In Focus

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AirBnB “Service” Runs Afoul of NYC Laws



Perhaps the one thing most bloggers miss while being focused on the latest headlines is how various media outlets actually cover the news. This especially important at a time when the viewing public seems to be growing more critical of the reporting being conducted by the various television stations and their affiliates. This has not stopped commercial networks from flooding the viewing public with stories that seem to be blurring the line between actual reporting and just parroting the official line presented by Government or business officials. So from this point on I will start conducting my pieces more on how these various stories are being reported, along with what is being left out in a given presentation. Call this, if you will, the story behind the story.


One of the most pressing subjects for many renters around the world focuses on the California-based hotel chain known as AirBNB. The company is clearly being catered to by some media outlets but taken to task by others since their service handily provides resources for tenants who want to cash in on the illegal hotels trade. Their head spokesman, Brian Chesky, was interviewed in a segment on CBS ion which the host all but fell over herself congratulating him for his company’s work even, stating, “this is so cool”.: http://www.cbsnews.com/8301-505266_162-57560182/airbnb-ceo-addresses-legality-of-rental-service-recent-issues-in-nyc/


Chesky starts the segment recalling how he and his roommate saw a way of making money thanks to a conference not far from their San Francisco apartment. With only about $1000 dollars in the bank they set up air mattresses and ran what was the first of their Bed and Breakfasts. At first glance this may seem like a harmless, even banal story - until he mentions that his company is operating out of 300,000 different homes and 500,000 different rooms. In his musings, he states that their customers get the feel of being in a home no matter where they are. In places like New York City, especially in Brooklyn where they have such a strong presence, tenants are running these businesses in residential buildings where other people live full time. Unlike a legitimate B&B operation, these tenants do not live in the units and rent out spare rooms. They are leasing entire apartments at multiple sites throughout the city.


Why is this so important? Not the least of which is that New York City is losing many of its rent regulated and other affordable units. Operations like AirBNB only add to the ever increasing housing crunch. As it is, the many long time NYC residents are being forced to move further out of the city to find housing and in many cases are forced out of the state altogether. The second problem is quality of life issues for tenants unlucky enough to live where these illegal hotels are operating, having to interact with a constantly changing crowd of often loud and unruly tourists. It is not uncommon for these visitors to throw parties all hours of the night, often with loud music and drunken yelling. Drug dealers and prostitutes are engaged for services. For the existing residents this is a clear deterioration in their quality of life. Safety becomes an issue since there is no accounting for who can enter the building. Crimes such as assault become more prevalent in these buildings. There is little doubt at this point that similar situations are arising in the 30,000 cities where AIRBNB have their listings.


When the interviewer asked Chesky about the problems he encountered in New York, he simply said that he supports his hosts learning about their local laws and that his company is trying to educate cities on who or what AIRBNB is, essentially side stepping the question. Instead of pressing him on the issue, both interviewers gave Chesky an out and asked him something about a trip he took his mother on. Had they really pressed him on it, or had they done their home work, they would have learned that Chesky and the rest of AirBNB have spent $30,000 for lobbyists up in Albany to try to weaken the state’s multiple dwelling law which was enacted to protect rent regulated tenants from being harassed by their landlords and making clear the difference between a commercial building and a residential one.


In a January 9th article on the Huffington post on January 9th of this year, David Hantman of AirBNB explained why the company so openly is willing to break the multiple dwelling laws 30 stay rule, complaining that the law was “complicated” and his company could not keep up with all of the laws in each of the cities in which the company operates. This seems to fly in the face of Chesky‘s assertion that his company supports his hosts to educate themselves on local laws. As the journalist of the article correctly points out, http://www.huffingtonpost.com/skift/airbnb-new-york-city-law_b_2434298.html,


“It just doesn't fit with their business model. Before New York State passed the current law, residents and community leaders (and not hotel chains, as some uninformed AirBNB backers claim) had been complaining about a glut of illegal hotels and apartments for years, but a patchwork of contradicting laws meant that it was nearly impossible to stop them, especially since fines were so small. But the profits were nice: A studio apartment on a vacation rental site can go for $175 or so a night, bringing in much more than the monthly income from someone with a standard year-long lease. The hosts could basically operate like a hotel, but without all the pesky safety regulations, insurance requirements, permits or zoning that real businesses have to deal with. Screw the neighbors.” And while Chesky claimed in the CBS interview that the company was meant for some individuals around the city earn a few extra dollars while they are away, evidence on the ground strongly suggestions a very different story. Bigger operations like “Smart Apartments” which uses AIRBNB, is known to rent out as many as 200 apartments in as few as 50 buildings, according to the article.


CBS is not the only news outlet who is overlooking the questionable legal practices of AirBNB. Tim Wu, of the New York Times, starts off an Op Ed by praising an app created by Uber which links users to such services like AirBNB but quickly pointed out the questionable legal status in both San Francisco, ironically the home of the hotel chain, and New York. http://www.nytimes.com/2012/12/20/opinion/the-best-way-to-regulate-urban-living-apps.html?_r=1&


Wu mentions briefly that neighbors of these operations are outraged by them since younger travelers are not always the best behaved and are often noisy. Curiously enough he then switched course, stating that these laws seem more designed to protection hotel chains than to help tenants. In the interest of disclosure, I used to live in a residential building on Manhattan’s upper West Side which was being used as an illegal hotel. I’ve experienced first hand the loud music blaring all night, the rooms illegally (and dangerously) overcrowded, vomit in the elevators, the tiny, overused elevator constantly breaking down from the constant traffic of transients and their heavy bags. Further I must openly admit that I volunteered on the campaign to strengthen our rent laws and had more than a little to do with pushing for the illegal hotels law.


Wu’s piece lays out how this app might work for AIRBNB “Cities could require the company to provide co-op boards and landlords, at their request, with an app that listed any advertised rentals at their addresses. That way, instead of one uniform rule for the city, landlords and boards could decide for themselves how they wanted to handle Airbnb rentals.” What Wu seems to forget in this statement, although oddly enough he mentions it in his own article, is that renting out a residential apartment for less than 30 days for non-primary residence is illegal - plain and simple. While many NYC landlords have shown no hesitation in breaking these laws, it doesn’t make it any more legal.


Part 2 of this series will focus on some of AIRBNB’s legal battles while it becomes the focus of crack downs both in the US and overseas.


Until next time…



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