The hotel service chain Airbnb is starting to feel the heat from housing rights groups and New York public officials alike in what the company feels is its most fertile market. But their fight to go legit in New York City will be considerably more of an uphill climb than the company may think. For some tenant’s rights groups and the electeds, the chain represents the decades old practice which used many NYC landlords, that is using a residential apartment as an illegal hotel. For the building owners, this business model was used to clear out rent regulated buildings, including SROs in order to convert them to market rate housing or coops/condos. The estimated loss of rent regulated housing is estimated at 300,000.
A coalition brought about the 2010 updating of the multiple dwelling laws which defines the state’s policy for rent regulation. The legislation also clearly defines residential housing as opposed to commercial hotel properties. One of the major differences between two is that a resident must rent his or her space out for a minimum of 30 days. Anything less than that and a unit is seen as being used for illegal transient purposes.
To the great joy of many tenants, various housing groups and representatives OSE (Office of Special Enforcement) finally cracked down on several well known illegal hotels on days after the law actually went into effect, May 2011. Two groups of landlords did challenge the law in the courts as being unconstitutional but the judge upheld the law stating that there was no evidence that the landlord’s businesses were being damaged in anyway. But the celebratory atmosphere turned out to be rather brief since some of the larger building owners and or landlords continued to thumb their noses at the law seeing that any fines received was only the price of doing business. The price for violating the law was a mere $500 dollars no matter if they were illegally renting out one room or 20.
In 2012 those concerned for the rights of rent regulated tenants won another victory with the passing of the so called fines bill also known as bill No. 404-A. Instead of receiving a flat fee for running one’s building as an illegal hotel, the perpetrators are now charged per-room per-night. And the fines do go up if the infractions continue. So for example, a first time offender would receive a $500 fine a room per-night. After that the fines would go up to $1000 dollars and so on.
It didn’t take too long for the face of illegal hotels to take a dramatic turn. The tenants fight went from being between them and the landlord where the rules are clear to tenant to versus tenant and landlord which has made the fight increasing more difficult as has the fact that the operation is in part being bank rolled by the founder of Ebay, Pierre Omidyar. Airbnb also reports to be operating out of hundreds of thousands of units worldwide bring in well over $10 billion dollars, much of which they currently using to persuade electeds to overturn or gut the multiple dwelling laws which tenants rights groups fought so hard to obtain. Their main weapon it seems is the nonprofit front group Peers which is made up of the who’s who of the illegal hotels trade. http://valleywag.gawker.com/airbnbs-industry-mouthpiece-astroturfs-for-d... . This supposed nonprofit is used as an organizing tool to bring together students, coop/condo owners and many others who use their units for transient purposes if they happen to be away on vacation or have an extra room for rent. The later it should be noted is not actually illegal since the tourists are merely guests as long as the person or people who are lawfully renting out the room are present at the time.
During a 48 hour time period Thursday through Saturday of last week, Peers was able to set up 168 visits to forty state officials. According to the head of the group these offices ranged from “From Lewiston to Syracuse to Manhattan, they told personal stories about what Airbnb had made possible for them”. In an email sent by Ashley Baia of Peers to a “Susan B” the head of the group boasted about getting 700 members of Airbnb to contribute an average of $12 dollars apiece. As one might expect the vast majority of stories told to those electeds willing to listen, usually involved how wonderful using Airbnb was and how it helped them save their homes or allowed them to go to school. What was omitted from these stories however was the other uses some customers found in using the service.
According to an article by Dana Sauchelli and Bruce Golding, entitled “Hookers turning Airbnb Apartments Into brothels” escort services have also found Airbnb to be useful. http://nypost.com/2014/04/14/hookers-using-airbnb-to-use-apartments-for-... . In many cases, these escort services use a bundle of rooms as crash pads where the girls can take their clients and charge an hourly rate. According to one sex worker “It’s more discreet and much cheaper than The Waldorf,” the sex worker spoke on condition of anonymity. “Hotels have doormen and cameras. They ask questions. Apartments are usually buzz-in.” The woman who was not identified in the article claims to charge $500 dollars an hour. The Escort service which she works for operates primarily in the financial district or Mid-Town West for weeks at a time. After that the room or rooms are turned over to other hookers to take their Johns. In order to avoid getting caught, the service agency has the girls set up their own profiles on the Airbnb website using a prepaid debit card.
New York is certainly not the only city where AirBNB apartments are being used for sex work. The problem has been reported in several buildings in 192 countries. In Washington DC one female client of Airbnb stated that two men that she rented her place out to wound up using it for a men on men erotic message parlor.
In another report, released by the Gothamist, a “XXX Freak Fest” occurred in the home of a local professional standup comedian Ari Teman. http://gothamist.com/2014/03/29/comedian_who_found_freak_fest_orgy.php.
According to the author of this article, Ben Yakas, Teman had rented out his studio apartment located in Chelsea to a member of Airbnb who claimed that he needed somewhere to stay while he was in town for a wedding. As it turned out the customer, identified as “David”, held what amounted to as a mass orgy. After Ari discovered what had happened, due to pictures taken at the event and a number of his things being broken, he started getting harassing messages from a worker at Aribnb, "It's not a random guy, very specifically it's the guy in charge of customer advocacy for AirBNB.” Apparently much of this harassment which has been coming from the company’s customer advocate team leader Simon McGrath has since moved onto twitter (see above link). Ari has tried to contact the company but has received no direct response. However, he has been receiving a series of anonymous emails with harassing messages, most of which don’t make any sense. He believes they could very well be Airbnb related and has since began taking legal action. Because this case is still underway further detail are not on offer.
However enabling the sex trade is not be Airbnb’s only legally questionable activity. As stated above, the company has taken to the continuation of the illegal hotels problem that housing groups such as the West Side Neighborhood Alliance and the SRO Law Project has been fighting for years. Since the presents of this company has exploded, public officials and tenant’s organizations have seen their fight take on a different phase. http://pix11.com/2014/04/22/officials-say-nyc-airbnb-rentals-making-hous... . Attorney General Eric Schniederman has issued a subpoena to Airbnb demanding that the company hand over its customer list, an order which is now being fought in the courts. Airbnb insists that the subpoena is an infringement of privacy and that their service helps many renters keep their homes but public officials such as Liz Kruger and Charlie Rangel see if very differently.
Rangel has stated that its not New York residence who are prospering from this company, it’s the operators like Airbnb which exacerbate long standing problems in New York City like the warehousing of apartments and offering many landlords or “super clients”, those who operate more than 30 rooms for the company an incentive to use normally rent regulated housing for transient purposes. This practice only leads to the furthering housing and rent crisis plaguing the working of NYC. As Liz Kruger stated, Schniederman is certainly within his rights to obtain the list since what Airbnb is doing violates New York State housing law.