New York: the next steps

Earlier this week, I wrote about the New York State Attorney General’s demand that Airbnb turn over three years’ worth of data on thousands of hosts in New York City. I wanted to provide a little more context on this issue and update you on our progress.

Several weeks ago, we met with the New York Attorney General’s office. The media has reported that the Attorney General is seeking to target a small number of illegal hotels that abuse the Airbnb platform. We share the goal of fighting illegal hotel operators and slumlords who have never been part of our vision and have no place on Airbnb. And we want to do more to help make New York and the Airbnb community even stronger. That includes working with the city and state to collect taxes, weed out bad actors proactively, and help handle complaints from neighbors with a dedicated hotline.

But the subpoena issued by the Attorney General last Friday goes well beyond bad actors and demands information about thousands of regular Airbnb hosts in New York. So, we made it clear to the Attorney General’s office from the very beginning that we would never agree to this type of government-sponsored fishing expedition.

As we said on Monday, we believe this subpoena as written is unreasonably broad, and we remain committed to fighting it with everything we’ve got.

The next step in that process was taken this afternoon, when we filed a motion in the New York State Supreme Court objecting to the broad sweep of the Attorney General’s demands. The Attorney General required us to provide data or respond in court today, and we are committed to standing up for our community. This may be a tough fight, but it is one worth fighting.

It will take time for a judge to rule on our motion, and during that time we hope we can continue to work with the Attorney General’s office to make New York and the Airbnb community stronger.

Airbnb started in 2008. Back then, everyone said it was a crazy idea, but our founders had a vision of what it could be: regular people opening their homes, sharing their spaces, connecting with people from around the world and earning a little extra money at the same time.

While our community was growing, New York City was grappling with a real problem: illegal hotels. Blocks of apartments and even entire buildings were being bought up, taken off the housing market and used as unlicensed hotels. Even worse, scores of New Yorkers were being evicted from the places they had called home for decades so unscrupulous slumlords could make a quick buck. It was wrong. And it was the exact opposite of everything we stand for.

As you know, New York passed a law to crack down on that problem. The intent of the law was noble and we have not argued for its complete repeal—far from it. But we’ve long been concerned that it could be used to unfairly punish members of the Airbnb community who simply want to share the home in which they live. That’s why we have a dedicated team working in New York City and Albany to try and change the part of this law that is too broad and goes after regular people trying to make ends meet.

We remain hopeful that we can continue our conversations with the Attorney General about weeding out bad actors and helping the State collect taxes where applicable. In the meantime, we will continue to work hard to educate governments around the world about the sharing economy and the incredible benefits it continues to provide every day. We know that someday, demands like this and the bad laws that make them possible will cease to exist.

We will continue to keep you informed on this matter as the situation develops. And we will continue to fight for you.

Comments

  1. So what does this mean for Airbnb hosts? Should we stop renting out our spaces until we hear further notice?

  2. Hi, I am concerned because I have more than one property that I share with the International Community. I am also concerned that you say that we are not paying taxes? I do pay taxes as Airbnb sends me a 1099 and I file that at the end of the year. I hope that someone could clarify what other taxes we should be paying???

    Thanks,
    Magaly

    • I am in the same situation. I stopped renting two days ago. I guess we are liable for renting out our apartments less than 30 days a month but we are not liable for taxes. We did it in good faith thinking we were not doing anything wrong. Does somebody know of a good attorney specialist in these issues?

      • Unfortunately, good faith won’t help when they knock on your door with a court order or a tax bill and penalties.

        NYC is one of the greediest cities on Earth when it comes to taxation and one of the most Byzantine when it comes to rules and regulations.

        Good luck, I fear you’re going to need it.

    • Hi,
      You are not paying hotel occupancy tax or sales tax. These are the taxes that the city is concerned with.

  3. Hi
    David on issues of regret. As the host, I do not understand there are a lot of parts.
    Commercial city, many visitors to New York for a visit with the few hotels that how many people are wondering whether to accept.
    We know, you’re in the same host to be able to attract more tourists to think I care.
    In New York City firmly believe that these laws should be passed.
    thank you!

    Mike

  4. Just curious: who is the judge? Do try and remember that this is New York, not California. In general, you are dealing with very nasty people who spend their time manipulating a corrupt criminal justice system, not an enlightened group of jurists. The stuff about a small number of bad actors abusing the rules is nonsense, what is really at stake here is the dreaded “sharing economy” and the gentrification of New York. Accordingly, you should count on the information being rapidly passed to certain wealthy landlord friends of the Attorney General who wish to evict lower-income residents so they can raise the rents.

    • marina dillon says:

      Finally someone said that! I can’t believe my eyes while reading through this politically correct nonsense: “The intent of the law was noble and we have not argued for its complete repeal—far from it. ” Really? That was an old-money hotel lobby’s work well done, with an intent to crack down on the emerging game-changing short -term apartment rental market. I can imagine AirBnB guys are new to the lobbying game and are trying to sound as nice as possible to the authorities indirectly, but effectively employed by their economic rivals. It doesn’t seem like they are getting what the game is about though.. So sorry to see this happening in what’s supposed to be free enterprise economy. Also, what this is about: “Blocks of apartments and even entire buildings were being bought up, taken off the housing market and used as unlicensed hotels. Even worse, scores of New Yorkers were being evicted from the places they had called home for decades so unscrupulous slumlords could make a quick buck. ” How can you “evict” those rent stabilized tenants who’ve lived in their apartments for a fraction of market rate for decades? The only problem I see with taking buildings off the housing market is that those “illegal hotels” were not paying hotel taxes. Otherwise those were property owners who decided to manage their property in a different way. What’s fundamentally wrong with this?

  5. Is there a transcript of the meeting where the AG indicates they want “to target a small number of illegal hotels”? A definition of what those hotels are?

    Seems to me like a good time to start organizing the class against AirBnB for when we soon all get fined up the…

  6. This is really worrying– we already paid taxes on the income we’ve earned from hosting while we have traveled (musician couple)– but the rate we charged went directly to travel costs– to have to repay that amount plus fines would kill us financially. I guess the gov already has whatever they need on everyone anyway– IRS records plus just checking the site. I feel like if the fines come, it’s all pretty futile to talk of the ideal of the sharing economy, unless real promises are made by Airbnb to shoulder any fines levied against us, which I doubt they would do since they have the disclaimer (that many of us have winked at and disregarded—unwisely, it would now seem) about only renting if you’re in compliance with local laws. I’m just kicking myself now for not just flying under the radar via craigslist– trying to go legit only seems to get you smacked.

  7. I’m very worried that airbnb would be required to give my information! And everybody else’s! What then? Fines? Trouble with landlords? I live in my apartment and I would never want to lose it! Will it end up costing us more money than we ever gained from being an airbnb host? I am VERY scared!!!!

  8. Airbnb is not playing fair and it is not clarifying what kind of information the AG wants. Data about our names, SS numbers, apartments or rooms that we list and addresses, number of guests we have hosted, total revenues during the last 3 years…. This is very important for many hosts to know what are the terms of the subpoena. However, despite the fact that I have called Airbnb 4 times and even talk to a manager, the only answer that I got was, we cannot give legal advise, contact a lawyer!!! I cancelled all my reservations and close down my profile after hearing that. Actually, it does not matter because the subpoena is for 3 years back. I just learnt the hard way that I shouldn’t have trusted Airbnb and that I could not rent my apartment for less than 30 days. This did not happened to other companies for short rentals to get a subpoena for their data. The policy of leaving us without clarification does not work. New York is a hard place to live but this is making it unbearable. How am I going to pay for fines and lawyer? What about the stress and horrible experience? What about going to bed knowing that eventually we might get a inspector in our places or a letter citing us? How many days is occasionally? 5 months of traffic, 6 months? If you have two rentals that is abusive? If you rent your entire home you are breaking the law? What were not advised when listing?

  9. As this is about negotiation and hotel lobbying and the target is to eliminate bad actors, a substantial proportion of regular new yorkers are bad actors here as they have rented their entire apartment when they are not present- Airbnb should try to compromise and negotiate with the AG to implement and prohibit rentals of entire apartments for less than 30 days from NOW on. What ever has happened until now can’t be changed but can be forgiven. If the idea is to prevent “bad actors” and move forward, Airbnb has the mechanism to prevent that and bam those rentals -Airbnb will have to loose a portion of his market in here and sunstantial amount of money but must give up on something-.
    it will gain reputation, will
    Save hundreds of new Yorkers from going on bankrupty and to court, will avoid to have bad reputation and it will
    comply with what they say they stand for a community of hosts that is reliable and comply the laws. To be honest, I did not know that what I was doing it could not be done. I called Airbnb they sent me the law passed in 2011 in NY, I read it and Then it is when I decided to stop. They did not warn us about the local housing law and possible consequences but they did accept our money. So now it is time to negotiate because Airbnb has responsability in here and the AG wants accountability but it is going to obtain it from a majority of regular people instead against the company. This is really sad and a mess.

  10. YankeeFrank says:

    Its great to see Erich Schneiderman going after the REAL crooks in NYC. After he punted and sold out the people to the banksters for a quick get out of liability for criminal and civil acts they committed in the runup and wake of the financial crisis I thought he was a total sellout. I see now that he is a hard hitting DA who will stop at nothing to crush the dangerous and criminal thieves stealing money from the defenseless and poverty-stricken NYC hotel industry. Standing up for the little guy is so noble — Scheiderman can sleep easily knowing he is fighting the good fight! What a massive tool.

  11. Hi Folks,
    yup, renting your space for a little extra money is great….however, it is a business. A service for money. There are responsibilities to guests and yes, unfortunately to the government too. For NYC folks, do a search: NYC tax to collect from guests: 14.5% and for, say, one bedroom apartment, $3.50/night, (changes depending on the size) Get your registration for running your apartment for short term rentals.
    And the law changed, taxes and short term is for 180 days. If a guest stays on the 181st day, then you can refund their tax you collected.
    Those that own a co-op or condo, watch your board’s rules.
    Where there is a BIG problem is folks that rent their apartments and then re-rent to short term. Look at your leases- you can easily get in big doodoo with your landlords.
    I hope this helps shed some light:) even if it is a mix of good and watch out news!

  12. oh, and no, I’m not an attorney, had one to help set us up the legal professional way.

  13. David, thought you’d enjoy this column in yesterday’s Colorado Springs Gazette and now online. Couldn’t mention airbnb by name, didn’t think it appropriate, but I still think you all will like it. –BF

    http://gazette.com/fiction-free-capitalism/article/1507528

  14. David, maybe Airbnb should have been aggressively removing the bad actors and slumlords from the site before the Attorney General had to intervene. Airbnb needs to take responsibility and innovate to resolve these issues.

  15. Why hasn’t Airbnb aggressively removing the bad actors and slumlords from the site before the attorney general had to intervene? I understand that hosts would be very concerned regarding Airbnb handing over their private data and so they should be. Allot of people have been inconvenienced with hosts cancelling all their NYC bookings due to this news. Our $4500 booking was cancelled and now it looks like we will have to pay almost $5500-$6000 for a new booking as it is so close to when we are departing and all we get is a $49 credit to help out. I think you should be publicly addressing what you have been doing to remove bad actors, illegal hotels and slumlords before the attorney general intervened. As for the hotel taxes, innovate and integrate that for hosts in regions that require these to be paid.

  16. Attorney at law says:

    I am an attorney who has been researching New York short term rental laws for the last year. I have spent probably 1500 hours on this task, which was motivated by my representation of a client who received a bunch of separate DOB tickets (or “NOVs”) related to a single rental. The mandatory (non-negotiable) fines that the City is demanding from my client is more than $20,000 (we are still fighting). In fact, because the ECB has recently passed a new law and penalties (in December 2012 or January 2013), if my client had gotten these exact same NOVs today, the mandatory fines would be about $125,000 (instead of around $20,000+). The city is also simultaneously prosecuting building owners for crimes out of the same short term rental activities; the city got a secret criminal conviction against my client before anyone from the City bothered to even send us a letter!. And then there are the huge tax implications of what the state is not pursuing with this subpoena or subpoenas (various airbnb people have said that the State has served subpoenas on other companies which are complying). Fortunately for those being pursued by New york government here, what the city of new york has been doing in prosecuting building owners (and suing Smart Apartments) is NOT based upon any valid law; I have developed a powerful, irrefutable case and can establish this fact. In fact, the DOB and ECB have fabricated the entire scheme and did this because the 2010 Legislature failed to enact any actual law that accomplished the City’s objectives (i.e. to fleece building owners and others for vast sums of money). In order to collect hundreds of millions of dollars in fines and settlements, the City, State, police, Dept. of Buildings and others have joined forces to investigate and eradicate the highly dangerous, heinous crime of renting an apartment to a willing renter. The City is making lots of money by going after people who rent out the apartments from profit. I also have information that the hotel industry is contributing large sums of money to the City to eliminate its competitor (i.e. short term rentals) so such industry can go back to enjoying the monopoly it has long held. Concerned parties need to help us file a class action federal lawsuit against the City, State, ECB, DOB, Police, Fire Department and more to stop this criminal conspiracy. They will not stop it voluntarily, as it’s too profitable. This is the only way this nonsense will stop. As a player with huge risk and potential liability itself, Airbnb has its own self interest here — as should be obvious from Mr. Hantman’s statement — which is vastly different from the interests of people who rent out apartments by using their service. To try and inspire much earlier action, I had warned airbnb’s lawyers about this kind of attack from the New York government; unfortunately, despite my many warnings, airbnb did not take earlier affirmative action — despite recognizing some real big warning signs that were evident from the Smart Apartments/Toshi Hotel case. Although it deserves some kudos for disclosing and fighting this subpoena (unlike others, apparently), Airbnb cannot be trusted to protect the interests of their client hosts, who use the airbnb service to rent out apartments. We need to take action NOW to stop the City and State players from continuing their criminal enterprise. I will be attending and organizing various events to answer questions and encourage others to help in this fight.

  17. Asinthediamond says:

    C’mon now. Everyone that rented space in their apt via airbnb knew they were getting over just a little. Some probably more than others. Our landlords didn’t say “hey, go ahead an sublet to your hearts desire and allow as many random renters in as you please” when we signed our leases. Unless you own your apartment, you don’t get to make the rules.

    That said, I think the AG subpoena is a HUGE invasion of privacy and a MAJOR breach of contract between hosts and airbnb. It was upto us to be informed about NY law before we listed our spaces. Now, I think it’s up to us to delete our postings and use other means to rent our rooms.

    Speaking of NY law……….. Once someone in is your space for 30 days (whether it was consentual or not), they have full renter rights. This means that they can squat in your place, and not pay a dime until you legally evict them…….which you can’t start proceedings on until they haven’t paid rent for 90 days.

    So while this 30 day rule does save airbnb from further legal action, it puts anyone renting their space monthly in jeopardy of having their apartment overtaken with no legal recourse.

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