New York’s New “Illegal Hotels” Rule Means Some Airbnb Users Are Breaking the Law

There are 1,193 rooms for rent in Brooklyn and 3,250 rooms in Manhattan (and 141 in Queens!) listed now on Airbnb, which claims it books more rooms a night than any of the big hotels in New York City. The company is revving up, launching new social features this month and announcing a sublet service coming soon–and now TechCrunch reports the company has raised about $100 million at a $1 billion valuation. But some local Airbnb users, whether they’re aware of it or not, are breaking the law.

A state law that went into effect this month makes it much tougher to rent residential rooms for less than 30 days, a response to “online activities in promoting illegal short stays at much cheaper prices than the regular pricey New York hotels. The enforcement is complaint based, and fueled largely by calls to 311,” according to IBTimes.

Airbnb’s founder Brian Chesky spoke out against the law when it was being debated last year. “This legislation is being painted as slumlords who convert apartments to illegal hotels,” he told the New York Times. “But as far as I can tell, this will affect thousands of families, young professionals and elderly people” [who use the site to subsidize their rent].

The law appears to be directed at landlords who use Airbnb in addition to sites like Craigslist and Roomorama to rent rooms–or in the case of “Hotel Toshi,” rooftops–for short-term stays. But tenants who rent out their space using Airbnb may also be on the wrong side of the law.

Peer-to-peer rentals are allowed under the “appropriate exceptions for roommates, boarders, etc. who live or rent in the unit with the permanent occupant.” But if the tenant is away–as many listings on Airbnb advertise–it’s technically illegal. These illegal listings also live on other sites, but Airbnb has a specific “private apartments” category.

Some Airbnb users in the city were the target of legal action even before the recent “illegal hotels” law came into effect.

“The renting out of some or all of their space by the night is an obvious and egregious overcharge, the operation of a hotel without paying hotel taxes, and a violation of the zoning laws, not to mention the terms of the residential lease,” Adam Rose of Rose Associates told the Town & Village in March.

Rose Associates manages Stuytown, the residential complex at the edge of the East Village, where some residents have complained about transients and bedbugs coming in through the site. The residence’s manager, Rose Associates, has declared Airbnb-ing illegal and says it is “aggressively” pursuing legal action against residents who rent their apartments through the site.

“We are directing our efforts at the tenants,” he said. “To attempt to control the actions of websites with which we have no relationship or connection would not be a productive activity.”

We’ve reached out to the Mayor’s office and Airbnb for further clarification. UPDATE: Airbnb responded. New York’s New “Illegal Hotels” Rule Means Some Airbnb Users Are Breaking the Law