New Airbnb rule doesn’t ban home-sharing, it targets scofflaws

BY REBNY President John Banks

Thanks to Governor Andrew Cuomo, New York now has a strong new law that will protect affordable housing from illegal short-term rentals.

There’s been quite a bit of misinformation about this issue and a lawsuit filed by Airbnb that may delay some common sense new rules from taking effect.

Despite what you might have read in some news accounts, the new law does not outlaw services like Airbnb — it simply adds steep penalties on hosts who post listings that violate the state’s laws on short-term rentals that have already been illegal and on the books since 2010.

Airbnb is in fact not a home “sharing” company as it often describes itself. The State’s Multiple Dwelling Law does not prohibit “sharing” your apartment. New Yorkers are lawfully permitted rent out an extra bedroom if they choose, but not an entire apartment. The problem with Airbnb’s business model is that encourages hosts to turn their apartments into an illegal short-term hotel rental.

The issue has to do with the growing number of commercial operators throughout the country who are using short-term rental and “home sharing” sites to run unregulated lodging business to avoid licensing, taxes, insurance, safety provisions, and other requirements.

According to an analysis by the American Hotel & Lodging Association (AH&LA) nearly 26 percent of Airbnb’s revenue in 14 of the nation’s largest cities came from users that listed properties for rent full-time (360 days or more each year).

Two of the people leading the way on this issue are State Senator Andrew Lanza and Assembly Member Linda Rosenthal. She points out that those numbers are even higher locally, “More than 50 percent of the units rented out on Airbnb are illegal — that’s why Airbnb is freaking out,” Rosenthal said.

“I’ve said to them, why don’t you not post the units that are illegal? They don’t want to comply with the law,” Rosenthal continued. “It enables thousands of units to fall off the rental market and have now been turned into hotels. Airbnb has been misleading its users about the law.”

The bill that Governor Cuomo recently signed did not create the State’s rules related to short-term rentals, it merely added enforcement mechanisms.

The bill will also protect good-paying jobs in our vital hotel industry, and for many residents of rental, condo, and co-op units who have seen their apartment buildings turned into illegal hotels, the law will help increase safety and improve quality of life.

Interestingly, Airbnb is facing a legal battle in San Francisco similar to the suit in New York.

Cities around the world are also working on addressing this growing problem: Amsterdam and Barcelona have enacted penalties on hosts who list illegal rentals, and Berlin has banned most short-term rentals.

New York City cannot continue down the road of looking the other way while Airbnb and other sharing services fail to police the illegal use of their sites.

A recurring theme here at the REBNY Watch column is New York City’s continuing housing crisis. We must increase our housing supply.

Thankfully, the new law will send a strong message that will prevent illegal behavior that takes precious housing units off the market, threatens hotel workers’ jobs and hurts the quality of life for residents in our City’s multifamily buildings.

In other REBNY News:

November 10 from 11:45 a.m. to 2:00 p.m. is REBNY’s next Members’ Luncheon, located at the Hilton New York. The event’s panel discussion, moderated by Seth Pinsky of RXR, is called “New Opportunities & Challenges in Today’s Market,” and will feature panelists Charles Bendit of Taconic Investment Partners, Leslie Himmel of Himmel + Meringoff Properties, and Kevin Hoo of Cove Property Group. To register, visit www.rebny.com or contact Ossie Shemtov at [email protected]

November 15 is our next Secrets of Top Brokers and Industry Leaders seminar, from 5:30 p.m. to 7:00 p.m. in the Mendik Education Center. This free seminar for REBNY members only will have a panel of notable real estate experts examine and present current trends in real estate to enhance the professional knowledge of each attending agent. Registration is required, and more information can be found on rebny.com or by contacting Yesenia Dhanraj at [email protected]

REBNY’s next Breakfast Club seminar will be on November 22  from 9:30 a.m. to 11 a.m. These seminars are open and free for REBNY’s residential members. Contact [email protected] for details.

Sustainability Boot Camp  will continue this Fall with BOMA’s International Energy Efficiency Program: BEEP® Version 2.0! Taught by NORESCO, the eight-hour course will be offered at a discounted cost of $45 per person. Commercial building staff can register for courses online at www.rebny.com. Effective January 1, 2017, the law of agency has been added to the CE curriculum required for renewal of a New York State real estate license. Under the new requirement, real estate salespersons that are within the first two years of becoming licensed must take at least two hours of agency law instruction. All other real estate licensees must take at least one hour  instruction. This amendment is applicable to any real estate licensee renewing their license after the Effective Date.

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