But most don’t realize that renting out full-unit apartments (class A permanent residential units) for less than 30 days has essentially always been illegal under the existing New York multiple dwelling law. The new bill, however (the one that’s stirring up even more trouble) prohibits renters from listing their apartments on the site at all, and relates to the prohibition of advertising, which some consider a violation of free speech. The penalty for violators can be up to $7,500.
New York’s existing multiple dwelling law, S6873B, was initially enacted to curb landlords from turning their apartment buildings into full-on hotels, thus further driving up the cost of housing. It also prohibited scheming profiteers from renting multiple apartments for the sole purpose of renting them out again at exorbitant prices (basically the equivalent of “flipping” an apartment, despite not being the owner). But this bill wasn’t intended for the average New Yorker looking to make some extra change by renting out their room for the weekend, or those who are temporarily renting their spaces in order to make ends meet.
While the city awaits Governor Cuomo’s final decision (he has until January to sign the bill), some question whether this new law also limits the existing legal protection of internet companies and platforms, not to mention advertisers using Airbnb. If an advertisement shows up next to an “illegal” short-term listing, will the advertisement company get penalized with massive fines too? Just how far are the legal limits of such a bill? The webs of possible implication aren’t clearly defined just yet, making most of the community nervous.
Tech:NYC, a non-profit organization focused on New York City’s technology sector, considers the bill dangerous, and recently stated the following in a letter: “As new, innovative ideas become mainstream, like home sharing, we face a choice: to embrace the jobs of the future and harness the economic opportunities created by new ideas, or, to allow entrenched industries to dictate their interests and refuse to make room for new competitors. We are increasingly concerned New York legislators are turning their backs on innovation, saying no to technology and siding with the entrenched interests that have controlled Albany for too long.” Travel Tech, a trade association for travel technology, also says this bill is “anti-technology” and issued a similar statement: “This legislation sends a clear signal that New York legislators are more interested in protecting legacy interests than the thousands of New Yorkers who use supplemental income from short-term rentals to make ends meet or the ever-growing numbers of travelers who prefer alternative accommodations to traditional hotels.”
But according to Steven Wagner, a prominent NYC real estate attorney at Wagner Berkow, LLP, these laws were designed to not only stamp out corruption and profiteering, but to ultimately protect affordable housing in NYC. “When I look at the people sponsoring these bills, they are not the hacks that are controlling Albany. Liz Krueger, as an example, is a very strong tenant advocate, one of the strongest in the city – and she’s a sponsor of this litigation. This is not ‘big business’ pushing this legislation – these are people who want to preserve affordable housing,” he told The Culture Trip. “When you do an Airbnb you’re most likely violating your lease and the law with regard to regulated housing, certificate of occupancy, the zoning resolution (which limits and controls where hotels can be), and you’re putting people at risk because of fire safety.” But Wagner does recognize the bill’s possible infringement upon free speech because it is vague, and advertising an apartment or room on Airbnb could arguably violate the bill without the rental actually violating New York City’s housing laws.
Some residents and state officials are also concerned with possible safety issues that come along with renting out apartments to unknowns. Even though Airbnb requires proper identification from renters, some have lamented the fact that building keys are being passed around and people deserve to know who their neighbors will be on any given night. State Assemblywoman Linda Rosenthal, who supports the new short-term rental bill, aired her concern to New York Post: “Every night there could be different person sleeping in the next apartment and it shatters that sense of community in the building. It also can be dangerous.”
Whatever the outcome of the bill, it’s clear that this heated battle will continue until January, and the legal implications for housing, hotels, and technology sectors will be far reaching.