City Council Considers Airbnb Restrictions

City Council Housing and Buildings Committee chair Jumaane Williams (2nd from right opens Oct. 1 hearing on illegal hotels. Councilmember Ydanis A. Rodriguez is on the left. Councilmember Helen Rosenthal on the right. Photo courtesy of Jumaane Williams Twitter.The City Council is considering three bills intended to curb the problem of apartments in residential buildings being illegally rented out to transients. The three measures would strengthen illegal-hotel laws that the landlord lobby has long been trying to undermine, an effort recently escalated by Airbnb.  

The first bill, Intro 0826, sponsored by Councilmember Helen Rosenthal (D-Manhattan), would sharply increase penalties for landlords who convert a residential unit for uses other than those stipulated in the certificate of occupancy. It would raise fines from $800-$2,400 to $10,000-$50,000, plus $2,000 for every day the violations are not corrected, and would be enforced by the city Department of Buildings. Intro 0823, sponsored by Councilmember Ydanis A. Rodriguez (D-Manhattan), would require the Department of Buildings to send the Council an annual report listing the number of complaints about illegal apartment conversions, how many times an inspector was called in, the number of violations issued, and the amount of fines or other penalties assessed and collected. The third bill, Intro 0788, sponsored by Councilmember Mark Levine (D-Manhattan), would require the Department of Housing Preservation and Development to include the restrictions on rent collections if the landlord is found guilty of violating the building’s certificate of occupancy in its booklet on the rights of tenants and owners. 

At a hearing on the three bills Oct. 30, Housing and Buildings Committee chair Jumaane Williams (D-Brooklyn) called Airbnb a company that deals in deception, comparing it to the aliens from the movie Mars Attacks, who repeated “we come in peace, we come in peace” while mowing people down with rayguns. Airbnb spokesperson Chris Lehane, a veteran political consultant best known for being the Clinton administration’s damage-control specialist, repeated over and over that the company was willing to work with the city so no laws are broken, but refused to hand over any information that would help the Council crack down on illegal operations. 

The San Francisco-based company brought several supporters who testified that these laws would hurt middle- and lower-income individuals who are simply trying to stay in their homes by making extra income to help pay their rent. Housing-rights groups and Councilmembers including Williams and Rosenthal, however, see Airbnb and similar “sharing economy” home-rental schemes undermining the supply of rent-stabilized apartments.

Airbnb has 27,000 listings for residential housing being used for transient purposes—more than 50 times as many as it had six years ago—according to a report issued in July by the Real Affordability for All coalition. According to state Attorney General Eric Schneiderman’s office, almost three-fourths of the company’s listings from 2010 to 2014 were illegal under state law. The Web site says that 16,000 of Airbnb’s New York City’s listings, just under 60 percent, use entire houses or units while the owners or leaseholders are not present, which is illegal. One-third of the apartments listed came from “super hosts” who offer multiple units, many of them commercial landlords.

How does this affect the housing supply in a city where the vacancy rate for rent-stabilized apartments is barely 2 percent? The RAFA report looked at 20 ZIP codes in lower and Midtown Manhattan, northwestern Brooklyn, and Long Island City, and found that 10 percent of the rental apartments in them were being used solely as Airbnb hotels. In four ZIP codes in the East Village, Williamsburg, the West Village, and the Lower East Side, “entire home/apartment listings on Airbnb accounted for a staggering 20 percent or more of the entire rental market.” These are all neighborhoods where rents are rising faster than the city average, with the difference most acute in Brooklyn. Last year, more than 70,000 people applied for affordable apartments in a 38-unit building in Williamsburg. 

The report estimated that Airbnb’s yearly earnings from illegal rentals, entire homes or apartments where the owners is not present, amounted to $393 million, more than three times the $117 million the company made from listings where the legal tenants were present and renting out an extra room. On average, rentals were available for slightly more than two-thirds of the year, and were actually rented for about 110 days.

“The data also debunks the false claims that Airbnb executives delivered under oath at a recent [City] Council hearing that most hosts are ‘regular’ New Yorkers renting out their homes for ‘four days a year’ to make ends meet,” RAFA said. “In reality, only 7 percent of full apartment listings are available for 10 days a year or fewer, and nearly one-third of all listings are posted by hosts with multiple units.”

Matthew Abuelo is a Met Council volunteer.