Photo by Tim Regan/ Flickr

Latest Airbnb play is a one-act tragedy

By John Banks & Peter Ward

When it comes to dealing with Airbnb, it is important to remember that actions speak louder than words.

Less than a year ago, Airbnb dropped a lawsuit fighting a newly passed state law that would prohibit the advertising of illegal short-term rentals. At the time, Airbnb claimed it wanted to “work cooperatively” with the city on “cracking down on illegal hotels that remove permanent housing off the market or create unsafe spaces.” This past week proved those words were empty rhetoric from Airbnb.

The company introduced a new piece of legislation, sponsored by Brooklyn Assemblyman Joseph Lentol, which would eviscerate the very laws they had promised to follow.

The reaction was swift and harsh, with dozens of elected officials, housing groups and advocacy organizations immediately mobilizing against Airbnb’s latest unwanted incursion on state law. It was heartening to see so many voices denounce the bill as nothing more than another Airbnb scheme to protect the bad actors who are the company’s biggest money-makers and dominate a large portion of the company’s listings and revenue.

New York City desperately needs more rental housing. As our population continues to grow, two-thirds of the city’s housing stock is rental. If we want to continue to grow and create jobs, we must preserve and build new rental housing. Illegal short-term rentals take housing units off the market.

Photo by Tim Regan/ Flickr

Photo by Tim Regan/ Flickr

The new legislation has a single objective: it legalizes the use of apartments units as hotel rooms by creating a huge exemption in the New York State Multiple Dwelling Law. This critically important law protects New York City’s scarce housing supply, as well as the safety of the vast majority of city residents.

The bill would make it incredibly difficult for owners to manage occupants in their own buildings, and it would also encourage individuals to rent apartments out to use strictly as Airbnb rentals rather than as residential units.

A close reading of the legislation shows that there are no real enforcement mechanisms. Moreover, the bill includes language that would specifically prevent the detection of illegal activity by denying enforcement officials access to the identity and address of the violator.

How can a government entity be expected to enforce rules against a black market industry if the data to uncover those behind the shadows is kept secret? Simply put, they cannot, and that’s what Airbnb really wants. Airbnb’s version of the “sharing economy” doesn’t extend to sharing information on hosts who violate the law.

As misguided as it is to remove any obligation on hosting platforms to share data on illegal listings, Airbnb takes it a step further, challenging enforcement authorities to sue if they need more information. The bill would also require hosts to have insurance – a mandate that, shockingly, cannot be satisfied by purchasing insurance through Airbnb’s platform. The bill fails to make clear that insurance is supplemental and wouldn’t cover someone from liability in cases of death, accidents or property damage.

The outpouring of opposition we have seen from so many corners is a good indication that the current law is sound public policy. Especially while New York City is experiencing a housing crisis, a new law that caters to the demands of a company that makes their money off the loss of housing stock is the last thing we need.

Instead of offering to work with the city on addressing the problem of rampant short-term rentals that are eating away at housing affordability, as they’ve done in other cities, Airbnb has decided to double down on their foray into New York City’s already fragile rental market.

Last fall, the state enacted a law that prevents people (either tenants or owners) from advertising illegal short-term rentals. This new law will protect New York City’s stock of affordable rental housing and preserve the vibrant hotel industry and important, good paying middle class jobs it creates.

Let’s give the recently passed law a chance to work before allowing Airbnb the chance to tear it down and build up more walls to the housing affordability and safety our communities deserve.

John H. Banks, III is the president of the Real Estate Board of New York. Peter Ward is president of the New York Hotel & Motel Trades Council, AFL-CIO.

In other REBNY news:

The RMC Seminar Series, presented by our Residential Management Council, will continue on Tuesday, May 30 from 8:30 to 10:00 a.m. at REBNY with Part II of the Residential Compliance Seminar taught by Adam Batista, Compliance Manager of Rose Associates.

This seminar will provide an overview of common violations relating to residential building compliance regulations such as lead based paint, facades, boilers, cooling towers, and elevators. The presentation is best suited for residential property managers and building operators. Visit rebny.com to register.

Commercial real estate professionals will gather to celebrate outstanding leaders in commercial property management, hear from keynote speaker Craig S. Ivey, President of Consolidated Edison Company of New York, and network at our 14th Annual Commercial Management Leadership Breakfast on Thursday, June 1 from 8:30 to 10:00 a.m. at the New York Hilton Midtown.

To register and view the award winners visit rebny.com. For sponsorship opportunities, email Cindy Ramotar at [email protected]

Tee up to play golf and tennis while networking with New York City real estate professionals at our Annual Golf and Tennis Outing on Monday, June 5.

Take advantage of this opportunity to advertise your company, sponsor the event, and provide promotional items or raffle donations. Your company will be credited on the invitation sent to REBNY membership, and in the event program. Contact Cindy Ramotar at [email protected] for more information.

Join REBNY’s Commercial Brokerage Division for summer rooftop networking at the Finance Committee’s 6th Annual Cocktail Reception to be held at 230 Fifth Avenue Rooftop Lounge. The event on Wednesday, June 7 from 5:30-8:30 p.m. is sponsored by Cushman & Wakefield, Signature Bank, and the New York Community Bank. Take advantage of early ticket pricing and register by May 31.

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