New York State Attorney General Report on Airbnb: No Good News

airbnb logo.jpg

The New York State Attorney General’s Office released a long-awaited report today on the (il)legal status of Airbnb, the short-term apartment rental site that has come under scrutiny in recent months, and not only for its logo. The report found, among other things, that in 2013 more than 4,000 apartments in the city were hosting short-term Airbnb rentals for more than three months out of the year. Nearly 2,000 of those were rented for more than half the year.

The report also found that commercial entities hosted a significant portion of Airbnb rentals during the period the attorney general’s office monitored the service, accounting for 36 percent of all private bookings (in which the Airbnb host is not present in the rental) and 37 percent of total revenue. The report also found a number of Airbnb rentals operating as hostels, and states, ominously, “multiple transients shared the same listing on the same night, as they would in an illegal hostel.” (Or a legal one, presumably.) The revenue from rentals in three Manhattan areas—the Lower East Side and Chinatown, Chelsea/Hell’s Kitchen, and Greenwich Village/SoHo—accounted for 40 percent of rental revenue citywide. Likewise, Williamsburg and Greenpoint accounted for 40 percent of all of Brooklyn’s revenue.

One of the biggest issue on the legal side is the unpaid hotel taxes that faux Airbnb hostels would incur if they were operating as legitimate hostels—estimated at $33.4 million since 2010. On the real impact side of things, extended short-term rentals—that is, whole apartments being used exclusively for short-term rentals—accounted for a significant decrease in long-term housing stock available to long-term (permanent) New York City residents. The effect the 4,600-unit fauxtel housing bloc has on rents, particularly in areas that are already seeing prices steadily rise, is difficult to calculate, but all the more worrisome for that.

Hating out-of-towners is practically the official sport of New York City, but for once the visitors are not to blame. Yes, they may clog up the sidewalk with their Midwestern Saunter, or stand there helplessly poking the MetroCard machine while train after train leaves without you, but the culprits of this story are opportunistic Airbnbers taking advantage of a system that, in theory, creates a very nice way to visit a city. Airbnb has been a mainstay of the Sharing Economy—like if couchsurfing got a 9-to-5 and started wearing chinos—but now threatens to become an insidious middleman, fleecing renters and longterm New York City residents in one fell, 182-day-long swoop.

Now that the report is out, the Airbnb crackdown will likely be close on its heels. Whatever may come of it, any new regulation that cuts down on makeshift year-round hoteliers, squatters, and surprise orgies would be an improvement over the current state of things.

Follow John Sherman on Twitter @_john_sherman.

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