Officials frown as New Yorkers rent out homes to tourists

Published October 17, 2013

'The city is overwhelmed with visitors, and it's practically impossible to find an affordable hotel, so you need some kind of outlet.'

- Ms Frommer, travel guide author

[NEW YORK] Each night, people in apartments all over New York city are cleaning up, putting out fresh towels and clearing out - to rent their private space to strangers from around the world.

Thousands of city residents are using websites such as Airbnb.com to list apartments or rooms for as little as US$35 a night, a phenomenon officials say is illegal in many cases, undercuts the hotel industry, avoids taxes and threatens apartment building safety.

New York state's attorney general is demanding that Airbnb turn over data on city dwellers who have listed on the site as part of an investigation into whether residents are breaking a state law barring sublets for fewer than 30 days if occupants are not present.

But many residents in the most expensive US city say they're providing a service that's valuable to them and their guests. Subletting for nights at a time is often the only way they can afford to pay rents that average US$3,000 a month and can often top US$6,000 in the most desirable areas.

"I use Airbnb to supplement my income, and it's allowed me to go back to school," says Mishelle Farer, a 32-year-old former US Army sergeant who rents her second bedroom in Brooklyn's artsy Williamsburg neighbourhood through Airbnb for US$60 to US$70 a night, depending on the season.

Ms Farer says she covers about half her rent through such arrangements. And besides, "I've met so many wonderful people from France, Germany, Spain, South Africa, Brazil, the Philippines".

Pauline Frommer, travel guide author and publisher of Frommers.com, says Airbnb fills a need in a city where hotel prices average US$275 a night. Similar sites include Flipkey.com and housetrip.com.

"New York hotel prices are truly outrageous," Ms Frommer says. "The city is overwhelmed with visitors, and it's practically impossible to find an affordable hotel room, so you need some kind of outlet."

Airbnb started five years ago in San Francisco, after two roommates couldn't afford their rent and inflated air beds for paying guests. It now operates globally in 35,000 communities, currently offering 500,000 listings, and is the world's biggest short-term rental company. The site takes 6 to 12 per cent of every rental.

In New York, the company says about 15,000 people are offering short-term rentals ranging from US$35 for a private space in a Brooklyn studio to a US$60 walkup in Times Square to US$120 for a garden apartment in Brooklyn's Red Hook neighbourhood to US$921 for an antiques-furnished loft in Tribeca.

New York city has been aggressively challenging Airbnb, contending many sublets on its site are illegal because residents aren't there. And the city says such rentals are cheating the city of lodging taxes.

Since the mayor's office began examining short-term rentals in 2006, it has fielded more than 3,000 complaints and issued almost 6,000 notices of violation, including fire, safety and occupancy infractions, which carry fines.

Airbnb says 87 per cent of hosts in New York share the space they live in with guests. The company has called the subpoena of customer information by attorney general Eric Schneiderman an "unfounded fishing expedition" and says hosts are responsible for following varying laws around the world.

NYC & Company, the city's official tourism agency, said in a statement: "This illegal practice takes away much needed hotel tax revenue from city coffers with no consumer protections against fire and health-code violations."

Neither city officials nor hotel organisations would estimate how much revenue hotels and the city might be losing. - AP