Simple question: Do you have the right to turn your apartment into a hotel room to make extra cash? Simple answer: No.
Airbnb, the 5-year-old vacation-rental business, lets you post your apartment online and snag a paying guest to stay for a night or 10. A huge chunk of the company’s business is in the city — and is illegal.
Albany and City Hall have long made a legal distinction between apartments and hotels. An apartment is for people to live in — for at least 30 days.
There’s a real difference. People tend to act differently when on vacation — drinking more and partying later, carrying more cash. Out-of-towners also accept help from the wrong person more often. Bottom line: They’re more likely to be crime victims or perpetrators.
That’s why hotels spend big on security, and why they must comply with special fire-safety and other rules.
Airbnb makes it easy, if not legal, for both tenants and landlords to convert apartments into hotels while ignoring these risks.
- Tom Cayler of Manhattan’s West Side said when his landlord starting renting out apartments as hotel rooms, he had to contend with French visitors blasting late-night music as they practiced for a DJ contest. A Danish tourist in his building endured worse: A criminal followed her inside to assault and rob her. Cayler complains, “The door would be left open,” making him nervous about his wife’s and son’s safety.
- Ken Podziba, who owns a building on Elizabeth Street, endured headaches when one of his tenants began renting out her $1,100-a-month rent-stabilized apartment as well as two of her neighbors’ apartments to tourists. “I’m liable if anything happens” in the building, Podziba notes; he wound up paying the woman to leave.
- Maurice Michaane, a real-estate agent, got into a scuffle when he wouldn’t let loitering strangers into Stuy Town.
In response to complaints, New York did something unusual: acted to fix the problem. Three years ago, state Sen. Liz Krueger got a bill passed to close loopholes dealing with illegal rentals. City Hall tweaked its own laws, too, raising fines for violators.
“This started with tenants’ concerns,” Krueger notes. “People they had never seen had keys to the front door.”
Now state Attorney General Eric Schneiderman is seeking Airbnb’s records, to see if clients are evading hotel taxes.
These enforcement efforts have Airbnb worried. It has hired lobbyists to get the law changed. In this effort, it paints its “hosts” as innocent victims who shouldn’t risk big fines.
In fact, if you rent your apartment out a weekend a year, you’re unlikely to get caught. Enforcement is based on complaints.
And Airbnb’s data show that this is a business, not a hobby.
The company says that 87 percent of its New York hoteliers — er, “hosts” — rent out their home “occasionally.” But these “occasional” renters earn $7,530 a year. That’s hardly “occasional.” At $300 a night, that’s 25 nights — nearly a month.
One Airbnb user, Kimberly Kaye, freely admits she vacates her apartment at least once a month for tourists. If everyone who lived in a 30-unit apartment building did that, they’d transform the building into a hotel.
Airbnb’s other argument is that its “hosts” need cash. We all need money, but we can’t break the law.
Plus, by enabling rent-stabilized tenants to violate their leases as well as the law, Airbnb puts its “hosts” in danger of eviction.
Such “hosts” are unlikely to find public opinion on their side. Says Michaane: “If you’re getting government help” in the form of a policy that caps rents, “you shouldn’t be renting out at a profit.”
Airbnb also says the money its hosts make helps them keep New York affordable. “This income is actually helping them to stay in their homes,” Airbnb policy director Molly Turner said last month.
But a landlord can get $3,000 a month for a one-bedroom legally, or $9,000 illegally. After he eventually cuts out the middleman — the tenant who thinks she’s smart in making a few extra bucks — that’s an apartment that someone can’t live in, pushing up rents for everyone.
You don’t have to believe in rent control to realize that the city should enforce laws to keep apartments as apartments.
Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal.