October 17, 2014 by westsideneighborhoodalliance
A report from NY Attorney General Eric Schneiderman found that nearly three-quarters of Airbnb rentals in the city are illegal, The New York Times reported on Wednesday.
“The report will say nearly three-quarters of all Airbnb rentals in the city are illegal, violating zoning or other laws,” Times reporter David Streitfeld wrote. “Commercial operators, not hard-luck residents, supply more than a third of the units and generate more than a third of the revenue. At least a handful of landlords are running what amount to illegal hostels.”
Schneiderman found that a whopping 72% of Airbnb’s rentals were illegal. His report also said that Airbnb was dominated by large-scale operators (not mom ‘n pop renters), finding that 6% of the hosts made 37% of the revenue — or $168 million. The number of units they administered ranged from three to 272. The individual with those 272 units reportedly charged an average of $358.19 a night, yielding $6.8 million.
The report is in direct contradiction of Airbnb’s cheery ad campaign, which suggests that most Airbnb renters are ordinary residents looking to make an extra buck.
Additionally, the report acknowledges that Airbnb renters are making big money, but the wealth is not being shared.
“Property owners on Airbnb are indeed making money, but it is not being spread around,” Streitfeld wrote. “Most rentals are in three high-profile Manhattan neighborhoods. Queens, the Bronx and Staten Island barely figure.”
Schneiderman does not, however, plan on standing idly by while illegal hotel operators erode our city’s affordable housing stock.
“Mr. Schneiderman and city regulators will also announce Thursday a joint enforcement initiative to shut down illegal hotels,” Streitfeld continued. “Various regulators will investigate violations of building and safety codes and tax regulations.”