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NYC Council Proposes $50,000 Fines for Home Sharing


FILE- Supporters of Airbnb stand during a rally before a hearing called "Short Term Rentals: Stimulating the Economy or Destabilizing Neighborhoods?" at City Hall in New York, Jan. 20, 2015.

FILE- Supporters of Airbnb stand during a rally before a hearing called "Short Term Rentals: Stimulating the Economy or Destabilizing Neighborhoods?" at City Hall in New York, Jan. 20, 2015.

The global home-sharing company Airbnb faces a fight to keep its foothold in New York City, mirroring the battles the company is fighting in many cities. It is opposing city legislation that would impose increased fines on owners of short-term rentals.

Airbnb asked its customers to sign a petition opposing the legislation, likening the propsal to "the Freddy Krueger of bills," harkening back to the 1980s U.S. horror film series “A Nightmare on Elm Street” where Krueger uses a glove armed with razors to kill teenagers.

While international travelers frequently book short visits to New York via Airbnb, New York state law prohibits tenants and landlords from renting out an entire home or apartment to someone for fewer than 30 days. Owners and tenants may rent a portion of their apartment or home as long as the permanent resident does not vacate the premises during the short-term stay.

Other US cities tighten laws

New York is not the only city to propose housing legislation. Airbnb’s hometown, San Francisco, will vote on November 3 whether to limit short-term rentals to 75 days a year – down from 90 days. The vote also would require hosting sites like Airbnb to take down listings that violate the limit.

In a compromise with the city of Chicago, Airbnb recently began collecting hotel tax in order to stay in business there.

Legislation

Earlier this year, New York City Council members Helen Rosenthal and Ydanis Rodriguez proposed steep penalties for property owners and lease holders who illegally rent their home. Municipal law currently imposes a first-time fine of $1,000 on those who convert their home or apartment to a short-term rental space. The proposal would raise the first-time fine from $1,000 to $10,000, and the maximum fine from $25,000 to $50,000.

Airbnb’s Global Head of Public Policy, Chris Lehane, started the petition against the legislation, stating, "The New York City Council could cause thousands of everyday New Yorkers to lose their homes or make it harder for them to get by.”

Low vacancy rates burden renters

City Councilwoman Rosenthal said the increased fines were not aimed at citizens, "but at protecting the New York City housing stock." The city's concern is a low vacancy rate, which can force rent prices higher.

The councilwoman's spokesperson, Stephanie Buhle, said the goal is to protect low-income and rent stablilized tenants, citing the example of a single room occupancy apartment building that had taken 80 percent of its rooms off the rental market and listed them as hotel rooms. Following complaints from residents, the city fined the owner only $800.

“Our housing stock is really valuable, and [landlords] are using it for [their] own good,” said Buhle, who added that the city suspects there to be more than 16,000 illegal hotels in NYC.

Airbnb wants protection

In a letter to a city councilman, Airbnb’s Lehane said Airbnb said the company supports efforts to "crackdown on illegal hotels." But the company claimed nearly eight in 10 of its hosts are low- to middle income, many needing the additional income to remain in their homes or apartment.

According to the city council's website, the amendment is being considered by a council committee, which means it may or may not ever become law.

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