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NYC’s Airbnb Settlement Coincides With Sharp Drop in Illegal-Rental Ad Fines

SHARE NYC’s Airbnb Settlement Coincides With Sharp Drop in Illegal-Rental Ad Fines

The city issued just three citations since January under a 2016 law aimed at Airbnb.

Ben Fractenberg/THE CITY

The City Council is moving to seal a legal settlement with Airbnb, streamlining how the home-sharing giant shares listings details with local law enforcers.

The deal comes as records show that those agents have all but ceased issuing fines under New York’s ban on advertising apartments for short stays.

The Mayor’s Office of Special Enforcement has issued just three tickets since January under a 2016 law that forbids ads for rentals of less than 30 days where a host is not present — hailed at the time as a major step toward halting the conversion of apartments into quasi-hotels. That marks a big drop from previous years.

The agency has issued no such tickets since March 10 — nearly two weeks before Gov. Andrew Cuomo issued a COVID-19 stay-at-home executive order.

“It’s a surprise that they haven’t done anything when there was clearly activity going on,” said Murray Cox, the creator of Inside Airbnb, which advocates for stricter regulations and compiles listings data worldwide. 

He notes that the coronavirus and related travel restrictions have slowed but not stopped short-term rentals: Since the state lockdown started, guests left more than 5,300 reviews, with more than 500 in Brooklyn’s Bedford-Stuyvesant alone.

A ‘Powerful Tool’ in Data

On Wednesday, Office of Special Enforcement Executive Director Christian Klossner told the Council that curbing short-term rentals — and penalizing hosts who advertise them on Airbnb and similar home-booking platforms — shields New Yorkers from disruptive housing conditions.

“The problem of illegal short-term rentals in New York City adds to the variety of longstanding affordability issues that this administration is committed to addressing,” Klossner said during a live-streamed hearing of the Council’s Committee on Housing and Buildings.  

During the Council hearing, Klossner said that Airbnb’s data will provide a “powerful tool to further the city’s efforts to address short-term rentals.”

Mayor’s Office of Special Enforcement Executive Director Christian Klossner testifies before the City Council about Airbnb.

Screengrab/New York City Council

The committee is expected to vote later this month on a bill that will tweak a 2018 local law, as agreed to under a settlement between the city and Airbnb on June 12.

A spokesperson for Councilmember Carlina Rivera, a prime sponsor of the bill, said the Council is expected to vote during its stated meeting on June 25. The proposed changes to the law exempt hosts who rent out their places for just a few days a season.

“Illegal hotel operators who flout the law at the expense of working New Yorkers have no place in our neighborhoods,” Mayor Bill de Blasio said in a statement announcing the settlement. “Finally, we’ll have the critical information we need to preserve affordable housing and keep our communities protected.”

A 2010 law levels penalties for full-unit rentals of less than 30 days within apartment buildings, after state lawmakers took aim at operators who turned dwellings into quasi-hotels. But enforcement had proven a challenge — leading to a 2016 follow-up law that let the city fine hosts merely for advertising such apartments.

Safety-Code Crackdown

A spokesperson for the mayor’s special enforcement office, Chester Soria, said the so-called ad law is only one of several tools used to penalize hosts of illegal listings and doesn’t represent the sum of the office’s work.  

The office also issues tickets for violations of building, fire and other safety codes — a tactic that has showered heavy fines on owners of one- and two-family homes not covered by either of the state’s short-term rental bans.

Soria noted that the office issued 1,107 code violations between January 1 and March 13, up from 819 violations given in the same period in the previous year. Those figures, however, include not only makeshift hotels but the full range of establishments the office monitors, including illegal massage parlors and nightclubs. 

“Beginning mid-March, as short-term rental activity dropped citywide due to the pandemic, OSE’s field-related activity was redirected to ensure business compliance with the executive order to prevent community spread of COVID-19,” said Soria. 

Still, he added, the office’s efforts to crack down on illegal short-term rentals “has been ongoing and continues undeterred.”

Starting a month before the pandemic shutdowns, enforcing the anti-Airbnb advertising law ground to a near-halt.

The city issued two violations in February — compared to 59 in 2017, records show. 

Klossner’s office issued just two violations in February — versus four in the same month in 2019, 61 in 2018 and 59 in 2017, city ticketing records show. 

The lone citation issued in March for “unlawful advertisement for certain occupancies” falls far behind the number of tickets issued in previous years, city ticketing records show, with between 10 and 47 tickets given in that month previously. 

The number of tickets had already dropped from a high of 380 in 2018 to just 173 in 2019, city records show.

Illegal advertising violations have turned out to be tricky for the Mayor’s Office of Special Enforcement to prove.

The mayor’s office must verify the name of the person and location of the listing to issue a violation — but the majority of listings investigated turn out to have false or unverifiable host information, Soria explained.  

Cox, who shares his data on a monthly basis with the mayor’s office, said he’s aware of the problem with nabbing illegal advertisers under the 2016 law.  

“They’ve been struggling to use that, mainly because it’s difficult to find the person responsible for the listing,” Cox told THE CITY. 

Tough Legal Fight

This week’s Council hearing followed a dug-in legal battle between Airbnb and the city. 

Airbnb filed its federal lawsuit against the city in 2018 after de Blasio signed Local Law 146, which called on the home-sharing service to supply data to the city about each listing on a monthly basis.  

The company has also sought to shield its hosts’ records from public disclosure under New York’s Freedom of Information Law. 

The settlement commits the city “to take reasonable steps to secure the confidentiality of reports provided” — and assert the ability to exclude listings information from public disclosure under existing exemption in the law for “trade secrets” or records that could jeopardize a law enforcement investigation.  

Frank Lomonte, director of the Brechner Center for Freedom of Information at the University of Florida, questioned that approach.

He said agencies can’t enter into legally binding contracts to designate records as exempt from the state’s open records law, known as FOIL.

“You can’t contract your way around legal obligations, and compliance with FOIL is a state-imposed legal obligation,” he said. 

‘Airbnb can continue to post illegal listings, and then the city has to catch them.’

Tom Cayler, 74, of Hell’s Kitchen, a member of the Coalition Against Illegal Hotels, said he was thrilled Airbnb committed to sharing its data, which it has refused to release to other cities. But, he said, he’s concerned the data itself won’t translate to immediate enforcement. 

What the city needs, and what has been effective in cities like Santa Monica, he said, is a regulatory system that requires ad platforms to take down illegal listings. 

“This legislation doesn’t require that of Airbnb,” Cayler said. “Airbnb can continue to post illegal listings, and then the city has to catch them.”

A spokesperson for Airbnb declined to comment.

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