Airbnb operator sued by New York City in battle over short-term rentals

The five-story building near Manhattan’s East River was meant to house eight residential apartments above a doctor’s office, according to city records.

But city inspectors have noticed people carrying suitcases in and out of the building in recent years. On one occasion, five guests told the inspectors that they were from Italy. They said they booked a six-day stay for over $3,000.

In a lawsuit filed in Manhattan State Supreme Court on Tuesday, New York City officials claimed the building was actually one of the largest illegal hotel operations housing visitors over the past of the past year.

The lawsuit was the first filed by the city targeting a short-term rental program identified by a new law that requires services like Airbnb to regularly report certain information about hosts and transactions.

And it was the latest in a years-long attempt by the city to stamp out illegal short-term rentals, which officials in many U.S. cities say are exacerbating housing shortages by catering to tourists rather than residents. residents.

New York State law largely prohibits apartment rentals for less than 30 days when the host is not present. And New York City officials have imposed several restrictions on rental services over the years.

But thousands of homes that appeared to be breaking the rules continued to be listed on the companies’ platforms.

Mayor Eric Adams said the city is likely to file additional lawsuits to force hosts to follow the rules in a bid to ease the housing crisis and help the hospitality industry, which has struggled during the pandemic. .

“We are not going to let bad actors, despite their attitudes, they will not deplete our housing stock and our hotel sector,” Mr. Adams told a press conference outside the building in East. 51st St and 1st Ave.

The investigation found that the operators had advertised the units through Airbnb and other online listing services, pulling around $2 million between 2018 and 2022 from visitors and violating laws that stipulated the building’s units had to be long-term residences, according to the lawsuit.

Inspectors also found faulty fire alarms and sprinklers, among other issues with the building.

Mr. Adams and other city officials also said the building’s owner and a broker who ran the operation repeatedly ignored violations issued by city inspectors.

The lawsuit, which seeks a court injunction to close the deal, was filed against Arron Latimer, a real estate broker; Apex East Management, the owner of the building; and Esther Yip, Apex Management Officer.

Mr. Latimer did not respond to requests for comment. A woman who was reached by phone and identified herself as Ms Yip said she was unaware of the lawsuit and needed time to understand the allegations.

Nathan Rotman, Airbnb’s regional public policy manager, on Tuesday praised the city for “taking swift action against illegal hoteliers who flout the rules.”

Eliminating illegal short-term rentals would make only a small dent in the city’s housing shortage. But these rentals have always been a source of friction between the city and companies like Airbnb.

In 2018, Airbnb sued New York City after it tried to force Airbnb and other platforms to share more host data, which resulted in a settlement in June 2020.

The city said the lawsuit filed Tuesday was the product of an agreement reached in that settlement, in which Airbnb began sending information about hosts and transactions to the city.

Christian Klossner, the executive director of the mayor’s Office of Special Enforcement, which has investigated illegal hotels, said his office estimates that about 13,000 Airbnb listings were for illegal short-term rentals that were regularly rented out. , based on data provided by Airbnb. and the city’s own analysis.

That number has dwindled in recent years, especially as the pandemic has curtailed travel to New York, which has long been one of Airbnb’s most important markets.

Authorities expect the number of illegal rental advertisements to continue to decline. Last year, the city passed a bill that for the first time would require hosts to register before renting their space for less than 30 days.

The measure, which will take effect in January 2023, mirrors regulations in other cities, including Boston and Santa Monica, Calif.

Mr Latimer is accused in the lawsuit of using more than two dozen fake host accounts to advertise different rentals. The city estimates that more than 6,500 guests stayed in the rentals it managed between 2018 and 2022.

Mr. Klossner said the city was able to match account information from several different host accounts to target Mr. Latimer. He said the city believes Mr. Latimer is still operating and advertising illegal rentals on other sites.

Airbnb’s Mr Rotman said in a statement on Tuesday that the company sent a cease and desist letter “months ago” to the operators of the illegal listings that were the subject of the lawsuit.

He said Airbnb wants to work with the city and state “to differentiate between responsible hosts who should be protected by law and operators of properties like this who don’t belong on our platform. “.

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