Three issues with Airbnb in New York City

Airbnb, Vacation Rental By Owner (VRBO), Homeaway and Flipkey are platforms that offer similar benefits; they all allow homeowners or renters to make some quick money by renting their apartments, condos or homes for short periods of time. Not all cities are getting behind these platforms, however, New York is one city that continues to push back against the practice. According to a recent piece by PBS NewsHour, the city is taking matters even further and officially stepping up its efforts to crack down on short term rental operations like Airbnb, which are viewed as illegal hotel operations.

New York versus Airbnb: The issues

In theory, this type of arrangement sounds like a beneficial deal for all involved. In reality, the practice raises a number of issues.

  • It does not collect a hotel tax. In many cities, Airbnb collects the tax on behalf of the hosts who offer their properties on the site. New York City, however, does not allow collection of this tax, which, if collected, would result in an estimated $65 million in revenue. Officials state that they do not collect the taxes because doing so would legitimize what is largely an illegal activity.
  • Not all residents are happy with Airbnb or other short term rental arrangements. Neighbors of Airbnb participants are not in full support of this activity. Some are uncomfortable with strangers renting units in their buildings. Units designed to offer certain safety features are essentially circumvented through the Airbnb rental process by giving keys and security access to strangers.
  • Some hosts are taking advantage of the system. Not all Airbnb units are family homes or apartments put up for the occasional rental. Some business-minded individuals see this market as an opportunity and are taking advantage of the system by purchasing a number of properties solely for the purpose of operating short term rentals. According to the piece by NPR, more than a third of Airbnb's business in New York City consists of hosts that advertise availability of three or more listings.

Aside from these broader issues fueling the debate, there are legal issues as well. As noted above, it is often illegal for renters and Airbnb homeowners in New York City to rent via an Airbnb. (There are exceptions, such as rentals while the owner is also occupying the property.) Violations can result in hefty monetary fines. Additional issues may be present based on the language of the lease or the applicable co-op or condo rules. Depending on the controlling language of the agreement, a violation could result in eviction.

Steps to stop the process: New York is fighting back

The city is taking potential legal violations very seriously and has expanded its enforcement efforts. Those attempting to navigate these issues are wise to seek legal counsel. Whether attempting to remove the practice from your building and moving forward with a legal means of renting out property, an experienced New York real estate attorney can help you determine the best option for your situation.