City Sues Firm for Running Illegal Short-Term Rental Operation

New York City recently sued Metropolitan Property Group (MPG) along with a number of associated entities and people for turning at least 130 apartments across 35 residential buildings, including one entire building in East Harlem, into illegal short-term rentals primarily through Airbnb. According to the city, MPG and their employees advertised short-term rentals on Airbnb through approximately 250 listings via approximately 101 host accounts using various fake identities.

The lawsuit was filed by the city’s Office of Special Enforcement (OSE). OSE used data obtained from Airbnb through administrative subpoena to connect illegal activity to the ring of real estate professionals. It found that nearly 70 percent of locations advertised by MPG omitted the house number for the rental location. And the data shows that the same contact information was often used to set up the distinct host accounts.

It’s illegal under New York law to rent out a unit in most buildings for less than 30 days unless the tenant is present during the time of the rental. But according to the city, MPG frequently rented out entire units on Airbnb. In its lawsuit, the city states that MPG and others ignored warnings to stop violating the city’s short-term rental laws, but chose to continue to do so, earning more than $21 million in illegal revenue from Airbnb.

Based on data the booking platforms make publicly available, OSE points out that there are approximately 60,000 listings on the top five platforms for vacation rentals. OSE estimates that 33 percent of the listings are commercial listings.