Report Indicates that Airbnb Removes Available Housing and Increases Rents in NYC

A report by McGill University's School of Urban Planning shows a negative effect of Airbnb to residents of New York City.  The Report titled "The High Cost of Short-Term Rentals in New York City" and authored by a research group at McGill University and funded by a hotel union found that 45% of Airbnb listings were illegal.  This amount accounted for $435 million in revenue during the period of the report which was between September 2014 through August 2017.  Of further significance is that New York City  is that Airbnb has taken out of the market between 7,000 and 13,500 units of housing from New York’s long-term rental market.  This has had adverse effect on rent prices as median rents has increased $380 all throughout the city and $780 in Manhattan alone.

The study found that Airbnb has had a positive affect on gentrification in that 72% percent of the population in neighborhoods at the highest risk of Airbnb-induced gentrification across the city are predominantly non-white. According to the research there is a significant disparity on the income earners of using the short term rental marketing.  "Airbnb hosts are 5 times more likely to be white. In those neighborhoods, the Airbnb host population is 74% white, while the white resident population is only 14%. White Airbnb hosts in Black neighborhoods earned an
estimated $160 million, compared to only $ 48 million for Black hosts—a 530% disparity. "

Airbnb has gone on the record and has disputed the findings of the McGill report.  They state that their methodologies are flawed especially the amount of nights visitors rent to Airbnb guests.  They also say that Airbnb has created $3.5 billion in economic activity for the city and 2 million guests have used them.  It should be noted that under NYC law, it is presently illegal to rent out an entire apartment in a multi-unit building for less than 30 days. Homeowners can be punished with violations and fines as a result.  Many NYC property management companies have been proactive to the use of Airbnb by their tenants and have sent out notices to existing tenants of buildings indicating that they would pay rewards for information resulting in the use of short term rentals by other tenants.  It is of high priority to property management companies to curtail the use of Airbnb as penalties and fines would be given to the owners of the premises.

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/report-indicates-airbnb-removes-available-housing-increases-rents-nyc/

Landlords Are Being Fined For Reporting AirBnB Violations

Landlords are being fined for reporting violations of law against companies like AirBnb.  In October 2016 a law was passed in New York making it illegal to to list units for rent for fewer than 30 days if the owner isn’t present.  The bill which sat on Governor Cuomo's desk for many months while AirBnB tried to lobby for the Governor not to sign it was eventually passed into law as concerns regarding affordable housing and foregone tax revenue were of primary consideration.

Cuomo spokesperson Richard Azzopardi said at the time “This is an issue that was given careful, deliberate consideration, but ultimately these activities are already expressly prohibited by law. They also compromise efforts to maintain and promote affordable housing by allowing those units to be used as unregulated hotels, and deny communities significant revenue from uncollected taxes, the cost of which is ultimately borne by local taxpayers,”

The law would seem to a win for landlords who were the biggest proponents of the law being passed last year.  Although this may be the case, landlords are being fined for reporting the said violations.  According to a Crain's New York report, a landlord reported that one of their units was being used illegally to the Mayor's Office of Special Enforcement.  The Mayor's Office of Special Enforcement eventually issued an order to vacate but the landlord was still fined $3,400.00. The court case was appealed multiple times but the Court eventually held that the landlord is responsible for illegal usage of the units although it is the tenant who created the condition.

As a result of the decision, many believe the decision will have a chilling effect on landlords who would like to report the illegal condition.  “We urge all New Yorkers to report violations of the law, including those that create dangerous living conditions,” a spokesman for DOB told Crain’s. “But reporting violations by others does not mean landlords are shielded from their own legal duty of providing safe homes to paying tenants.”

“If you want us to cooperate with you, you have to stop fining us,” Jeffrey Goldman, a partner at Belkin Burden Wenig & Goldman who represented the landlord in the above reference case stated.  NYC Property management companies and owners must remain focused on curtailing and preventing the use of their units rented for fewer than 30 days.  The failure to do so will result in tremendous fines that the city will penalize you on.

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/landlords-fined-reporting-airbnb-violations/

Airbnb has decided to drop their lawsuit against the City of New York, the largest market for its operations with revenues exceeding 1 billion dollars in the city for its hosts.  Airbnb has had a huge impact on business specifically in Manhattan and Brooklyn.  The lawsuit was based on a law signed in October that called for fines of as much as $7,500 for illegally listing a property on rental platforms such as Airbnb.  The law would have imposed fines that would have hampered Airbnb's operations throughout the country and required additional supervision of listings being put on their website.  The lawsuit was dismissed on the agreement that New York City enforce the law only against hosts and Airbnb not be fined.  The settlement of the lawsuit goes into effect today December 5, 2016.   For more about the settlement you can read here.

NYC property management companies have vehemently objected to Airbnb taken hold in New York City. Specifically some landlords have been fined and violations imposed as a result of tenants illegally renting out their apartments to Airbnb'ers.  A recent case brought by Related exemplifies this.  In the particular instance, Related attempted to evict a rent-stabilized tenant who they discovered was renting the unit out on Airbnb for $649.00 per night.  The tenant was paying $6,670 for the unit on the market rent of $9,000.  Related sought and received an eviction.  The state appeals court held that tenants have no right to benefit from apartments that have rent restrictions.

Although there are no guarantees that this would stop illegal units cropping up throughout the city, it is certainly a positive step into deterring possible violators.  It will be interesting how the City will go about enforcing the law going forward but Assemblywoman Linda Rosenthal is optimistic that there will be a crackdown.   She states “I expect the city will now get down to the important business of enforcing the law against the serial lawbreakers on the site” who turn affordable housing intol illegal hotes. This is a win for everyone."

http://www.blueharbourpropertymanagement.com/airbnb-drops-suit-city-hosts-will-fined-instead/

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