City Council Holds Hearing on Illegal Short-Term Rentals

On Jan. 20, the City Council’s Housing and Buildings Committee held a hearing to discuss various matters related to short-term apartment rentals, especially those listed through Airbnb, the pioneering home rental service. New York has emerged as Airbnb’s largest market. The company says it has 25,000 active hosts in the city and is waging a perception campaign against the idea that its service is exacerbating the housing shortage in New York. The company argues that that the money guests bring in bolsters local businesses and helps New Yorkers pay their rents, while opponents point to the illegality of Airbnb’s business in creating illegal, unsafe hotels.

It’s currently illegal in New York to rent out apartments in buildings with three or more units for under 30 days, according to a law passed by the state legislature in 2010. Scrutiny of this industry has increased since the state’s attorney general, Eric T. Schneiderman, released a report in October that said 72 percent of Airbnb listings for entire units from January 2010 through June 2014 ran afoul of this and other codes.

In a letter sent to the City Council preceding the hearing, Airbnb laid out a plan to change that law. “The law should be carefully amended to make it possible for regular people to occasionally share only the home in which they live, while not providing loopholes for illegal hotels to operate,” the company wrote. If the city legalized short-term rentals, Airbnb said, New York stands to gain $65 million in hotel and tourist taxes, which the company would collect on behalf of its hosts.

Airbnb Actions to Root Out Illegal Listings

At the hearing, the council did not take kindly to this proposal. In some of the most poignant exchanges, Council members Helen Rosenthal and Jumaane Williams, the committee’s chairman, interrogated David Hantman, the global head of public policy for Airbnb, about what actions the company takes to find and eliminate illegal listings on its site.

Aside from requiring New York hosts to pledge that they’re not breaking the law or violating their lease agreements, Airbnb doesn’t actively look for illegal listings. Instead, Hantman said, the site is focused on eliminating listings that are not of a good “quality.”

“We’ve removed thousands of listings in New York, for instance, because they were not providing that kind of experience and they should not have been on our site,” Hantman said. “We’re constantly doing that kind of review. But we focus as a company and a platform on the kind of quality experience where people are providing to their fellow community members.” However, pressed by Williams, Hantman admitted not doing any research to determine what listings are illegal.

Current Enforcement of Short-Term Rental Laws

The City Council also took issue with how the de Blasio administration has enforced the short-term rental laws, accusing the special enforcement unit, part of the Mayor’s Office of Criminal Justice, of being “reactive” rather than “proactive.” Airbnb currently falls under the jurisdiction of the Mayor’s Office of Special Enforcement (OSE), a joint task force formed in 2007 to tamp down on the rise of illegal hotels. That was before the rise of Airbnb, and it didn’t seem credible to members of the City Council that OSE’s staff of 10 investigators were capable of coping with the explosion in short-term rentals.

The task force chiefly responds to 311 complaints. It received 1,150 illegal-hotel complaints last year, a 62 percent increase from 2013. Though the office has taken to using software to cross-reference complaints, it hasn’t gone so far as to look at platforms like Airbnb, said Elizabeth Glazer, the director of the criminal justice office, who oversees the office.

In addition to inspections conducted by the OSE, the FDNY has about 300 field inspectors in its fire inspection bureau that can look into potential code violations, FDNY Chief of Fire Prevention Thomas Jensen said. These comments followed a sworn affidavit recently submitted by Chief Jensen stating that residents and visitors of buildings with illegal hotel rentals face a greater risk of injury or death because Airbnb and other illegal hotel users are unfamiliar with building layouts and evacuation plans, making it more difficult to exit in the event of a fire emergency. According to Jensen, unlike legitimate hotels, where there are standard regulations for smoke detectors with alarms to automatically notify FDNY and where there are evacuation plans with a secondary egress in case of fire, Airbnb and other illegal hotel rentals units don’t meet the same fire safety standards.

Chief Jensen also noted that by law, hotels are required to provide portable fire extinguishers, automatic sprinkler systems, photo-luminescent exit path markings for exits and stairwells in high-rise buildings, manual and/or automatic fire alarm systems on all floors with smoke detection capability, and a fire safety and evacuation plan. Residential buildings—converted into illegal hotel rentals—don’t have to provide for these safety protections, Jensen added.

Numerous Council members suggested a larger staff would allow for inspectors to actually seek out illegal listings rather than respond to complaints. Glazer and Jenson both said such an approach would have to be prescribed by the mayor’s office directly. The chief also said he felt restricted by existing law.

The Attorney General’s investigation into Airbnb is ongoing, and the City Council is likely to have more hearings on this topic. Airbnb, meanwhile, is lobbying for a bill that would amend the 2010 law and make its listings legal.