City Files $1.2 Million Lawsuit to Shut Down 'Airbnb Hotels'

The city recently filed a $1.2 million lawsuit against an owner for using Airbnb to advertise sublets of a dozen apartments in three buildings on the Lower East Side for fewer than 30 days. This lawsuit represents the biggest crackdown thus far on an owner illegally using Airbnb. It’s illegal in the city to rent out a place for fewer than 30 days without being properly licensed as a hotel or bed and breakfast or another similar business.

According to the city’s lawsuit, the owner has been hiding behind a middle man and at least nine aliases to create a network of transient hotels. And one of the building’s permanent residents told city officials that the owner is trying to evict rent-stabilized tenants from her properties to convert even more units into profitable Airbnb units.

In an emergency hearing, the judge granted the city a temporary restraining order that bars the owner from renting any short-term units in her East Village and Lower East Side buildings. She also was prohibited from “illegally” advertising short-term rentals, and the Airbnb guests staying in the apartments in question had to vacate within 24 hours. The judge warned that if she violated his order barring her from continuing to rent the apartments through Airbnb he could find her in “contempt of court” and the city could put the properties in receivership.