Officials in New York have determined that Airbnb is illegal, despite efforts by the online firm to persuade the city otherwise. The law violated is the illegal hotel law, which prevents residents from renting out their property for less than 29 days. According to CNET, the law originally meant to prevent landlords from turning residential properties into hotels.
The ruling doesn't necessarily mean all Airbnb hosts will be cracked down on, as the city only enforces the rule when a complaint is filed. Airbnb responded with the following statement:
"This decision runs contrary to the stated intention and the plain text of New York law, so obviously we are disappointed. But more importantly, this decision makes it even more critical that New York law be clarified to make sure regular New Yorkers can occasionally rent out their own homes. There is universal agreement that occasional hosts like Nigel Warren were not the target of the 2010 law, but that agreement provides little comfort to the handful of people, like Nigel, who find themselves targeted by overzealous enforcement officials. It is time to fix this law and protect hosts who occasionally rent out their own homes. Eighty-seven percent of Airbnb hosts in New York list just a home they live in—they are average New Yorkers trying to make ends meet, not illegal hotels that should be subject to the 2010 law."
The case in question originally made a $7,000 demand on Airbnb host Nigel Warren, and originally included building and zoning code issues. Administrative Law Judge Clive Morrick, however, threw these latter issues out, and has fined Warren $2,400 for violating the illegal hotel law. "While breach of the condominium rules is not of itself a ground for sustaining this (notice), respondent was in breach (through Warren's acts) and the existence of the rule against rental for transient, hotel, or motel purposes is evidence that the unit owners were to restrict their use to permanent occupation," the judge wrote.
Airbnb intervened in Warren's case, arguing that allowing people to rent out rooms occasionally "supports the city's desire to preserve living accommodations because it allows tenant the ability to bolster their income and pay rent." The move could prove a headache for the firm's CEO, Brian Chesky, who has already dealt with enough anxiety since he came up with the idea for the website.
In June 2012 Fast Company's technology editor Chris Dannen wrote about being served a restraining order after his landlord realized Dannen was using Airbnb to rent out his apartment and make some extra cash ($20,000, to be accurate). "My landlord had caught on. When I delivered my rent at the beginning of the next month, I found the management company’s office under construction. It's now a hotel. The 'loft-style' rooms are now listed on Airbnb for $169 a night."
Will we see Airbnb, which doubled its listings in 2012, now lobbying for a change in the law? Probably.