City Council member Carlina Rivera with Council Speaker Corey Johnson at a news conference July 18, 2018. Photo by Emil Cohen/New York City Council.
A bill sponsored by local City Council member Carlina Rivera aimed at Airbnb sailed through the Council yesterday.
The legislation, approved unanimously, would require home sharing firms to turn over information about their hosts to city regulators. It is illegal to rent most apartments in New York City for less than 30 days unless the host is present. The bill, which has the support of Mayor de Blasio, will enable the city to crack down on violators.
Critics of apartment sharing services say they have exacerbated New York’s housing crisis, making it easier for building owners to profit from short-term rentals. They argue that many apartments have been removed from the city’s stock of affordable housing as a result. Airbnb launched a ferocious PR campaign against Rivera and her Council colleagues.
After a similar law was enacted in San Francisco, the New York Times reported, Airbnb listings fell by half. Companies will face a $1,500 penalty for each listing they fail to disclose.
Airbnb unsuccessfully argued that the law would hurt “the little guy,” struggling New York City residents who use the service to earn a little extra money. The firm also accused Council members of being beholden to the hotel industry. Following the vote, spokesperson Liz DeBold Fusco said:
After taking hundreds of thousands of dollars in campaign contributions from the hotel industry, we’re not surprised the City Council refused to meet with their own constituents who rely on home sharing to pay the bills and then voted to protect the profits of big hotels. The fix was in from the start and now New Yorkers will be subject to unchecked, aggressive harassment and privacy violations, rubber stamped by the City Council.
Rivera countered, “Yes, sometimes it’s the common New Yorker. But many times, especially in my district, these are landlords who are taking rent-regulated units out of the housing stock because they’d rather get a lot more money per night.” She added, “This bill is about transparency and bringing accountability to billion-dollar companies who are not being good neighbors.”
Carlina Rivera during an unrelated tenant rally at City Hall last week. Image via CM Rivera’s Twitter.
On Thursday, local City Council member Carlina Rivera plans to introduce legislation aimed at Airbnb.
If the proposal becomes law, the home sharing firm would be fined $25,000 for each apartment listing it fails to disclose in quarterly reports to the city. Airbnb and similar firms would be required to reveal addresses, host names and contact info in filings with the Mayor’s Office of Special Enforcement.
Rivera told Politico she hopes to schedule a hearing on the proposal right away. “To be clear,” she explained, “this bill is not going to punish the operators — it’s going to mandate consequences, financial consequences, that apply only to Airbnb, not the operators, if they do not hand over the info that we’re requiring.”
Screen shot: some of Airbnb’s Lower East Side listings.
Rivera and many of her Council colleagues believe Airbnb rentals are depriving local residents of apartments which would normally serve as rent stabilized housing. State law prohibits most short-term (less than 30 day) rentals unless the owner is present.
Airbnb has launched an aggressive campaign against the bill, arguing that the “deep pocketed big hotel industry” is behind the legislation, and that there could be internet privacy concerns. An Airbnb spokesperson claimed that the legislation would hurt, “seniors who share their space to avoid economic hardship while living on a fixed income; millennials who have opened their doors to pay off student debt; and families of color who share their home to stay in their home amidst rising rents.”
Screen shot from Airbnb’s website.
A new report by New York City Comptroller Scott Stringer finds that Airbnb is causing rents to rise significantly in popular Manhattan and Brooklyn neighborhoods, including the Lower East Side.
In a press release, Stringer’s office explained:
The new analysis sheds light on how Airbnb listings, particularly in neighborhoods where they are most heavily concentrated, exacerbate New York City’s affordability challenges and make it harder for working- and middle-class families to make ends meet… Airbnb listings were heavily concentrated in parts of Manhattan and Brooklyn and had a greater impact on these neighborhoods. Approximately 20% of the increase in rental rates was due to Airbnb listings in midtown and lower Manhattan, including neighborhoods such as Chelsea, Clinton, and Midtown Business District; Murray Hill, Gramercy, and Stuyvesant Town; Chinatown and Lower East Side; Battery Park City, Greenwich Village, and Soho.
Lets take a look at some neighborhood-specific data from the report.
In 2016, there were 2,746 Airbnb listings on the Lower East Side and in Chinatown. Between 2009 and 2016, average monthly rent shot up by $242, to $1,294. There are, of course, many other factors that lead to rent increases, but the comptroller estimates that Airbnb is responsible for nearly 20% of the increase in this community. Airbnb accounts for about 3% of the total rental housing stock on the Lower East Side.
In a statement, Stringer said:
For years, New Yorkers have felt the burden of rents that go nowhere but up, and Airbnb is one reason why. From Bushwick to Chinatown and in so many neighborhoods in-between, affordable apartments that should be available to rent never hit the market, because they are making a profit for Airbnb. Airbnb has grown exponentially at the expense of New Yorkers who face rising rents and the risk of being pushed out of communities they helped build. If we’re going to preserve the character of our neighborhoods and expand our middle class, we have to put people before profits. It’s that simple.”
While Stringer says the report accounted for other factors, such as rezonings, Airbnb went on the attack yesterday regarding the comptroller’s findings. Here’s a statement the home sharing firm sent around to reporters:
Airbnb has filed a Freedom of Information Law request with the New York City Comptroller’s Office for any and all communications regarding the conception and development of their factually wrong report on the impact of home sharing on New York City’s housing market. The very foundation of the report is deeply flawed: assuming that all Airbnb Hosts are renting their homes 365 nights a year is akin to conducting a traffic study that assumes all cars in New York are on the road all day, every day. Additionally, other information has been brought to our attention and we have reason to believe that this report was influenced by powerful special interests. This report was paid for with taxpayer dollars and the public has the right to know about who participated in this snow job.
A 2014 report from the state attorney general’s office found that around three-quarters of all Airbnb listings in New York City were illegal. State law bars apartment owners and lease-holders from renting units for fewer than 30 days, unless the owner is present.
UPDATE 5/7 Airbnb continued its PR battle later in the day on Friday, with a letter from AirDNA, a company that analyzes Airbnb data. The comptroller’s report relied on information collected by the market research firm. Here’s part of the letter:
The (Stringer) report, which incorrectly interpreted AirDNA data to make assumptions on the impact of Airbnb on New York City rental prices, comes to flawed conclusions at great cost to the thousands of Airbnb hosts that rely on the platform to make ends meet. At no point did the Comptroller contact AirDNA to ask for guidance or our professional expertise on how to read the data, leading to several crucial errors in his interpretation of the numbers. The Comptroller mistakes every unique listing ever uploaded onto the site as the number listings that were active in that year. A large portion of Airbnb listings are not active. They sit idly on the site, made unavailable for rent by hosts and/or unbooked by guests, and therefore have little to no effect on rent prices.
In response, Sascha Owen, a spokeswoman for the comptroller, told the Times, that the report, “took an empirical, data-driven approach to assessing this Airbnb effect and shared it with the public… It’s no surprise that AirDNA would attack a credible report when their own bottom line depends on Airbnb’s success.”