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72 percent of Airbnb’s NYC reservations called illegal

As many as 72 percent of Airbnb Inc. reservations in New York City in recent years violated the law, state Attorney General Eric Schneiderman said, vowing to “shut down illegal hotels in the five boroughs.”

The short-term home-rental service also is used by commercial enterprises operating “multimillion-dollar businesses” in the city, Schneiderman said Thursday in a report based on data subpoenaed in May.

“In one instance a single commercial user made $6.8 million in less than five years,” Schneiderman said in a statement accompanying the report.

Airbnb, founded in 2008, lets users rent out a couch, bedroom or house and makes money by charging a fee for each transaction. The company has listings in more than 34,000 cities, according to its website, and has raised financing from venture-capital firms including Sequoia Capital, Greylock Partners and Founders Fund. Investors and analysts have speculated that it may go public with a $10 billion valuation.

Schneiderman has been probing San Francisco-based Airbnb since last year. He said in a statement Thursday that a joint city- state task force will investigate and shut down illegal hotels that violate laws on safety and affect neighborhood quality of life.

Of more than 35,000 listings studied from 2010 to June 2, 2014, 25,532 apparently violated city multiple dwelling and zoning laws, and the company generated about $40 million from the transactions, Schneiderman said.

‘Incomplete and outdated’

Nick Papas, an Airbnb spokesman, said the report relies on stale information.

“We’re proud that Airbnb has helped countless families,” Papas said in an email. “We should not deny thousands of New Yorkers the chance to share their homes, pay their bills and stay in the city they love.

‘‘The report’s conclusions rely on incomplete and outdated information,’’ he said. ‘‘For example, the findings do not account for the more than 2,000 listings we have already removed.’’

The state found that in 2013 about 200 units were booked for more than 365 nights apiece, citing their use as illegal hostels.

‘‘The 10 most-rented units were booked for an average of 1,900 nights in 2013, with one top listing averaging 13 reservations per unit per night,’’ the attorney general said.

He said short-term rentals are ‘‘displacing long-term housing options’’ in the city.

‘‘In 2013, more than 4,600 units were booked for at least three months of the year,’’ he said. ‘‘Of these, nearly 2,000 were booked for a cumulative total of six months or more, rendering them largely unavailable for use by long-term residents.’’

Schneiderman said fewer than 3 percent of the reservations were on Staten Island, Queens or the Bronx. Gentrified Manhattan neighborhoods were preferred, such as Greenwich Village, Chelsea and the Lower East Side, and some in Brooklyn.

Officials identified ‘‘numerous’’ illegal hostels, where ‘‘multiple unrelated guests’’ share a unit for the night, Schneiderman said. Nightly rents ranged from about $14 in Brooklyn to $132 in Queens to $178 in Manhattan.

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