Airbnb could pose threat to New York City's affordable housing

On Tuesday, the New York City Council held a hearing on services like Airbnb, with a host of critics assailing the illegal practice of landlords and commercial brokers using vacant apartments for more lucrative short-term rentals.

Bebeto Matthews/AP
Supporters, left, of Airbnb stand in a line to attend a hearing at City Hall, while opponents, right, rally at a press conference, Tuesday, Jan. 20, 2015, in New York. With home-as-hotel sites like Airbnb doing booming business, New York City lawmakers are holding a hearing to scrutinizing how the trend affects the housing market and economy.

The booming home-sharing website Airbnb has received a fair amount of backlash nationwide in the past year, but in New York, the concerns are taking a new twist. Advocates of affordable housing have begun to speak out, saying the peer-to-peer sharing movement is straining an already-tight housing market.

On Tuesday, the New York City Council held a hearing on the subject, with a host of critics assailing the illegal practice of landlords and commercial brokers using vacant apartments for more lucrative short-term rentals.

“This growing trend poses concerns for the City of New York – in particular, for our affordable housing stock and public safety,” said Comptroller Scott Stringer, who oversees the city’s budget and fiscal condition, in testimony submitted to the city council Tuesday.

“While there are 3.3 million housing units in the City of New York, the fact remains that we need every unit we can get to combat rapidly rising rents,” he continued.

Airbnb, which reported more than a half-million check-ins at private homes worldwide on New Year’s Eve, including 91,000 first-time Airbnb users that day, has been under increasing scrutiny for the past year or so. Cities across America have raised questions about zoning regulations and lost tax revenue from traditional hotel bookings, and privacy complaints have come from residents unhappy with their ever-revolving next-door tourist neighbors.

Last year, San Francisco became the first major US city to pass new regulations for services like Airbnb. Starting in February, only permanent residents may offer limited short-term rentals, and they must register and pay local taxes.

But in New York, the issue goes beyond regulation and taxation. Affordable housing has been one of the central pillars of the administration of Mayor Bill de Blasio and the über-liberal city council this past year.

In fact New York, even as America’s most bustling tourist destination, has had Airbnb in its sights for the past few months. In an October report, the state attorney general, Eric Schneiderman, found that nearly 75 percent of the site’s listings violated state and city laws – which bar full apartment rentals of fewer than 30 days and require owner occupancy when renting an extra room.

The report also found that nearly a third of those offering short-term rentals were landlords or commercial entities, rather than individuals offering rooms in their apartments. In other words, they weren’t individuals legally sharing rooms in their apartments.

“Airbnb and the illegal hotel operators it enables are contributing to the affordable housing crisis,” wrote New York City’s public advocate, Letitia James, in a letter to the service last month.

In New York, rent regulations have been in place to keep many housing units affordable for a variety of income levels. But landlords can sometimes get better market rates with short-term rentals through sites like Airbnb.

The home-sharing service, however, hopes to convince lawmakers that new regulations, as well as better enforcement against those operators essentially offering illegal hotels, would be beneficial to the city.

"The majority of hosts use the money they earn to pay their bills and stay in their homes," wrote David Hantman, former chief of staff for New York Sen. Charles Schumer (D) and now head of Airbnb’s public policy, in a letter to lawmakers last week. He also said the company would support “smart regulations,” including “tougher penalties for unlicensed hotel operators.”

The home-sharing site proposed easing the prohibition against renting full apartments for fewer than 30 days, and then collecting a 14.7 percent hotel tax for all New York listings, as well as a $2-per-night surcharge in New York City. Such taxes could yield city and state coffers $65 million, Airbnb said. The service already collects taxes for Portland, Ore., and San Francisco.

“Those resources could fund valuable public services and should not go uncollected,” Mr. Hantman wrote. “We should amend the law to help ensure our community can contribute even more to the city and state.”

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