Airbnb Stay Illegal In New York, Rules Judge

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The case in question originally made a $7,000 demand on Airbnb host Nigel Warren, and originally included building and zoning code issues.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.

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21 Comments

  • Kyle Smith

    No one likes competition.  Information is becoming cheaper.  The information about where to stay was hard to obtain so you stayed in a hotel.  Now - not so much.  Slowly information is going to drive resources to maximum use and there will be less duplication of resources as our entire society becomes more efficient.  Fewer buildings, less consumption.  Technology, if we can get around entrenched interests and old regulation, is going to change our world.  

  • nimish sharma

    What a shame!
    The Govt. should should support all such services that make the lives of citizens better. Renting my room on Airbnb has brought me and my family joy and beautiful experiences.

  • Nick

    We'll continue what we've being doing for years , the judge can rule whatever they want...

  • Simplequa

    Airbnb is not cheap. if you want decent accommodation. They should obey the law. Dammit!. The are not but an agency trying to scrape money by doing what all business do , avoid as much responsibility and taxes,as possible. Absolutely nothing wrong in that, People should stop acting as if they all of a sudden invented Tokyo. I use them, this not a bias piece, New York has laws and interests which they must defend. New york rent is market driven, if you can't afford to pay. Make more money.If you can't make more money stay away. That is the life you will sooner or later deal with

  • Adam

     Obey what law?  Why is there one law for New York and a different one for the rest of the country?  If you are renting a home out, it's yours to do with as you wish - if you have spare space, no one should be allowed to tell you you cannot let it out yourself.

  • Shaunnj

    Every city, town, state, etc. can make their own laws obviously. What works in one city may not be practical for another. As an analogy, the lax gun laws in sparsely populated southern and western states is less practical in places with large populations like New York, NJ, California....

  • Douglas Crets

    Not to be snide, but it's because it's NYC, and many housing laws are different there because they started there, and in Boston, and are endemic to that kind of living. There's an excellent museum about this in the Lower East Side. NYC is where the idea of the modern tenement was born, and that is why, subsequently, you see very strict rental and housing laws. it's to prohibit a real horrible situation from developing. 

  • Amanda

    This sucks. I mean, obviously this is like any sort of service that generates income... There are those that abuse it and take advantage. But I was just able to rent an apartment literally one block away from my apartment when my elderly parents came to visit me in Brooklyn for a third of the price of any of the hotels in my neighborhood. And the lovely gentleman I rented the apartment from was just a normal dude who was going away for a long weekend and wanted to offset that cost. There has to be some sort of happy medium or compromise. 

  • Dana Blankenhorn

    Which officials? A judge? At what level? City Council? Can this be appealed to a higher court or is this final? Please explain.

  • Superior Animal

    I think we need to take a second here and think: what is wrong with a rental market in which rents are so HIGH that tenants feel must rent out their apartments as a temporary hotel residence in order to pay their extraordinarily high rents? Amongst the people I know this is becoming the norm. I love airbnb as a user -- but it concerns me that many people do this not because they like to, but because they must.  This ruling should prompt a discussion of the fact that most rents are WAY more than a quarter of most (middle and even upper middle class) New Yorker's salaries thus prompting them to become part-time hotel-keeprs. Is that OK?

  • Gerald Irish

    I don't really see a problem with the high rents.  It is simply a reflection of supply and demand.  If there wasn't such huge demand for apartments in Manhattan and a supply of people willing to pay exorbitant rents for the privilege, rents would be low.  If someone can't afford to pay $3000 for a studio apartment, they can easily move to one of the other boroughs, or across the water to New Jersey.

    I think the reason some people are renting out their properties is because they see it as an easy way to make money off underutilized space.  If you have something of value that you can make money from with relatively little effort and an acceptable amount of risk, why not?

  • Samseau

    The problem is that rents are increasing with prices nationwide to due rapid debasement of the US currency. Blame the fed for making life ever more expensive.

  • Douglas Crets

    Another way to look at it, though, is not that rents are too damn high, but that people's credit card bills are too damn high. That's not particularly the rental market's fault, but I am sure that in a world where many people / landlords are under water on their mortgage terms, Airbnb remains an attractive way to serve that financial need. 

  • les_madras

    It is hard to be cheery about AirBnB's legality if your neighboring condo rents to escort services via AirBnB.

  • NoahRobischon

    I saw a report about this happening in Sweden, but never in the United States. And it seems less likely now that they have implemented real ID checks. Is there any proof of this that you know of directly?

  • Adam Backstrom

    Very sad. I landed in an Airbnb when I moved to the city. It was a great experience that didn't break the bank. I hope that I can again recommend it to incoming hires some day in the future.