City Sues Commercial Building Owner in Airbnb Crackdown

New York City recently filed a lawsuit against an owner of three Manhattan buildings over allegedly using Airbnb to advertise illegal short-term rental units in the properties. According to the lawsuit, the owner and his companies formed at least 21 illegal listings at the buildings through Airbnb and tried to sidestep the city’s laws by saying they were using former office space rather than apartments to offer visitors to the city a place to stay, the suit says. The company made more than 2,800 illegal short-term rental reservations to almost 9,400 guests between 2016 and 2019 and earned about $1.7 million in revenue from the listings, according to the lawsuit.

City inspections found that the defendants illegally converted the ninth floor of one building from a showroom and factory space to short-term rental space; the fourth floor at another building from manufacturing space to short-term rental space; and the three floors of a third building from showroom and office space to short-term rental space, the lawsuit says. The defendants did illegal construction work at the properties as well, according to the suit.

The lawsuit also criticizes the owner for supplanting “small businesses that could have used the commercial and manufacturing spaces” in his buildings by converting it into residential space. The city hit the three buildings with more than $46,000 in civil penalties before filing the lawsuit, according to court documents.

The suit asks the court to ban space in the buildings from being used as short-term rentals going forward and have the defendants pay the city a fine of $1,000 per day for each day they violated its rules on short-term rentals. It seeks $500,000 in punitive damages for the city as well.