Council Member Jumaane D. Williams speaks at the oversight hearing on short-term rentals. Image credit: William Alatriste / New York City Council
Eight-hour hearing covered testimony from supporters and opponents of short-term rental businesses. On January 20, 2015, the City Council Committee on Housing and Buildings held an oversight hearing on the effects of short-term rentals on New York City’s economy and neighborhoods. Over the course of eight hours, the committee heard testimony from independent tenants, representatives from the Mayor’s Office of Special Enforcement, the home-sharing website Airbnb, owners of local bed-and-breakfasts, and members of the public for and against short-term rentals.
The first extensive testimony came from the representatives of the Office of Special Enforcement. Elizabeth Glazer, director of the Mayor’s Office of Criminal Justice which oversees Special Enforcement, testified the Office has a staff of twelve from various Mayoral agencies, and respond to complaints of various code violations from the 311 system. The Office conducted 883 inspections on 1,150 complaints last year. The Office can also call on 300 field inspectors from the Fire Department to look into alleged violations, according to Chief Thomas Jensen. Ms. Glazer stated Special Enforcement responds to every complaint but prioritizes those that come in, acting within twenty-four hours in health and safety emergencies and up to three weeks for others.
Council members in attendance took issue with what they characterized as Special Enforcement’s “reactive” approach, waiting for 311 complaints rather than seeking out illegal listings. Council Member Mark D. Levine argued Special Enforcement was understaffed, saying “I think it strains credulity to think that a staff of ten could manage a sector with 16,000 violations in five months”, referring to the New York Attorney General’s report that 16,483 unique units were booked on Airbnb for short-term rental in New York City in the first five months of 2014. Council Member Jumaane D. Williams, chair of the Housing & Buildings Committee, asked whether Special Enforcement could be more proactive in pursuing illegal listings. Ms. Glazer stated the Office does not have the resources to adopt that strategy, as it was designed for investigation. Ms. Glazer was noncommittal on whether existing law is sufficient to allow the Office to pursue listings, stating that was something the Attorney General was currently evaluating. Council Member Vincent Gentile accused the City of turning a blind eye to illegal home conversions, arguing Special Enforcement will use circumstantial evidence such as interviewing neighbors in charging a short-term rental violation, but will not do the same for a suspected illegal conversion. Council Member Corey Johnson read a statement into the record, testifying there were currently over 4,000 Airbnb listings in his district, and argued services like Airbnb damage the quality of life in the city’s neighborhoods and dupe its users into risking eviction under their leases by hosting short-term tenants.
David Hantman, an executive from Airbnb, testified on the positive impact of his company’s service and of short-term rentals as a whole. Mr. Hantman argued the company does not exacerbate the housing crisis in New York City, and Airbnb helps provide an alternative to expensive Manhattan hotels for tourists who end up spending their money at small businesses in the outer boroughs, directly benefiting the local economy. Lee Thomas of Ozone Park, Queens testified in support of Airbnb, telling the story of how he was diagnosed with cancer after inhaling smoke from Ground Zero, and renting out his guest apartment through Airbnb helped him pay medical costs not covered by his health insurance. However, Council Member Williams distinguished Mr. Thomas’ testimony from the issue at hand, pointing out the Illegal Hotel Law does not prohibit owners of a one- or two-family home like Mr. Thomas from renting out space.
Council Members Williams and Helen Rosenthal questioned Mr. Hantman closely on Airbnb’s practices, and what the company does to ensure its users are not violating applicable federal, state, and local housing laws. Mr. Hantman testified potential hosts in New York are given links to applicable laws, and advised to make sure they are in compliance. Council Member Rosenthal accused Airbnb of primarily concerning itself with its revenue and not neighborhoods in which their users operate, arguing a neighborhood complaint hotline Airbnb operates didn’t exist before the Attorney General’s report was released. “What’s happening in my district is, I searched Airbnb’s listings for the Upper West Side, I saw none that were a shared rental. All of them…were for the entire apartment.” Mr. Hantman rejected the implication and maintained typical Airbnb users rent out a room in their apartment a few times a year, rather than unscrupulous landlords illegally turning their buildings into hotels. “What you’re describing is the kind of activity we don’t support, turning full-time housing into short-term housing,” he said. “This isn’t what we’re talking about.”
Mr. Hantman testified Airbnb’s has removed thousands of listings from its site, but admitted under questioning this was for providing a poor hosting experience rather than for violating housing laws, and Airbnb does not research whether or not potential hosts are violating the law. Council Member Williams argued this comes across as supporting Council Member Rosenthal’s allegation Airbnb does not consider the neighborhood impact of its services, just its revenue. “You do a lot of research, sir, and you keep mentioning ‘quality [of the users’ experience]’, and you never once mention ‘following the law’. That is amazing to me. …I cannot understand as a businessperson who runs a corporation how you can sit there and never mention violations of city, state, and federal law.”
City Council, Public Hearing (Jan. 20, 2015).
By: Michael Twomey (Michael is the CityLaw Fellow and a New York Law School graduate, Class of 2014.)
There are several things I feel the Council is missing. First, the issue is not whether a website is ensuring the participants are following local laws. Such a requirement would conflict with cases that have been brought and failed against Craigslist.org. People have been killed by answering Craigslist ads posted by private citizens, yet no council member or court has held Craig Newmark responsible. Therefore, Air BNB cannot be required to ensure private citizens are following the law anymore than Craigslist has been required to do so. Air BNB is a website that offers to private citizens, for a fee, the ability to connect to others in order to fill a need.
Private citizens cannot be restricted from occasionally offering others a place to stay for a fee. Such restriction would stifle commerce amongst the private citizens and score a victory for all licensed businesses. We cannot allow such oppressive restrictions to prevail upon the private citizen. So let’s get to the real heart of the matter; hotel lobbies and neighbors unhappy about Air BNB guests.
The hotel industry is strong in New York City and the State and Local governments have restricted the number of hotels and the cost of staying in our wonderful City. The average hotel in New York City is more than $300 a night plus taxes, which are outrageous because people who stay in hotels here don’t vote and politicians don’t care about what visitors think. In cities such as London, Paris, and even Beijing and Tokyo, hotels are more plentiful and thus less expensive. Hoteliers claim it is the taxes, codes, and regulations that drive prices up, but we know that isn’t true. It is simple supply and demand. There are only a handful of hotels in Manhattan that qualify as exceptional in every way, whereas if you travel to smaller markets with more supply of lodging you will see the disparity in qualities and amenities even within the same franchise. Stay in a Sheraton in the City then travel to Dallas and stay in one; you will enjoy better everything at a fraction of the price. While we all understand the economics of supply and demand, people who can’t afford high priced hotels in the City should have options that allow them to visit as well. If you make Air BNB illegal or restrict how their site operates for New Yorkers, you will be hurting the tourism industry by making travelers stay at hotels they can barely afford and thus spend less at small businesses in our great City.
You will also be hurting New Yorkers. Air BNB serves as a means for a New Yorker to continue to afford the ever increasing cost of living in their home. An owner of tenant can rent out a room or the entire unit for three days and it might make the cost of rent or a mortgage ascertainable. The Council is being asked to take aim at illegal listing and I ask you to stop beating on private citizens who are just trying to get by and remain here.
As for landlords turning units into short-term rentals, that is what enforcement is supposed to go after. Creating sweeping laws and legislation that restrict landlords and private citizens as an indirect (thought purposeful) circumstance will hurt New York’s private citizens.
If neighbors are unhappy with a unit being inhabited by an Air BNB guest, then that should be addressed through the House Rules of building and not at the law-making level. Co-ops can make rules against them; landlords can as well. If the tenants or owners complained to the management and the problem was pervasive enough in their building, the rules would change. If the rules do not change in the building then the unhappy neighbor can move out. That is the beauty of living in the United States. If we don’t like the way our neighborhood is heading, we can move out. This used to not be the case. We used to try to make restrictions that were so gripping that we would disallow certain people from moving into our buildings because it would make us unhappy. We got rid of those lose, and rightfully so.
I urge the NYC Council to refrain from restricting the private citizens (who vote) from renting out their units or rooms on Air BNB based on an over arching concern of laws fitted to regulate the hotel industry. Regulations should be implemented to restrict landlords, but not tenants. Hoteliers ma fund your campaigns, but private citizens vote.
Thank you for your time.
Respectfully,
Christopher Brock