New York today: the real story

Earlier this week, an administrative law judge in New York issued a new interpretation of the “shared space” exception to New York’s short-term rental restrictions, fining an Airbnb host named Nigel Warren $2,400 for hosting on Airbnb.

The headlines are dramatic: Airbnb Is Illegal! But we want you to know that these headlines don’t tell the true story.

This was one court decision that we strongly disagree with. We believe it is a misinterpretation of “shared space,” and it does not mean every Airbnb listing in New York is illegal. We are not going anywhere.

New York has been important to Airbnb since the beginning—and we are more dedicated than ever to advocating for clearer, fairer laws that allow our hosts to share their own homes with guests legally, as a force for good in the city.

The headlines may be overstating the case, such cases are rare, and Nigel won on four out of the five counts against him. But that is little comfort to a host who was simply renting out his own apartment on an occasional basis and now finds himself on the hook for exorbitant fines.

What makes this decision most troubling is the manner in which this administrative law judge interpreted a fairly clear provision in the New York law making “shared spaces” legal.

We believed, and still believe, that as long as a host is present during a stay, the stay is legal. That is why we intervened in this case. But the administrative law judge used some fairly tortured reasoning to come up with a brand new test, which essentially implies that a stay might be legal only if the host and guest intend to form a relationship or friendship of some kind.

This could be considered good news, since so many Airbnb guests and hosts do form relationships throughout the booking and visiting process, and afterwards. And there were a number of specifics that made this case unique, which means it may not be a predictor of future cases.

But put simply, this decision is wrong on the law, and bad for New York. The laws in New York and around the world are confusing and often contradictory, but we intervened in this case because this was the one area of the law that seemed most clear. Therefore, we are examining our options to help appeal this case on Nigel’s behalf.
As always, we encourage all of our hosts to understand and obey their local laws. But this judge’s decision demonstrates how difficult is for hosts and even companies like ours to adequately understand laws that were not meant to apply to regular people hosting to make ends meet.

And more importantly, this decision makes it even more critical that New York law be clarified to make sure regular New Yorkers can occasionally rent out their own homes. There is overwhelming agreement that occasional hosts like Nigel Warren were not the target of the 2010 law, but that agreement provides little comfort to the handful of people, like Nigel, who find themselves targeted by overzealous enforcement officials.

In 2010, New York rightly set out to crack down on illegal hotel operators. Many of these operators were converting large numbers of affordable housing units into unsafe hotels—putting lives in danger, and clearly circumventing regulations governing hotels.

But as so often happens, a regulatory initiative that began with a noble goal ended up capturing more than just the bad guys. When the 2010 law was drafted, few people were aware that Airbnb even existed. As a result, the growing community of Airbnb hosts in New York—regular people using the income from Airbnb to pay the bills—simply had no voice in the legislative process until it was too late. Legislators really only heard one side of the story.

As so many of those same legislators have made clear since then, the target of the laws was never intended to be these individual residents. These are not illegal hotel operators trying to make a quick buck. These are people like Maria, who has used her income to work less and spend more time with her husband. Or Emmett, who still keeps in touch with the friends he’s met from Europe, Asia, and Africa. Or Evelyn, who saved her home from foreclosure with the money she makes from Airbnb.

More than half of our hosts in New York have said that the income they earn through Airbnb has helped them stay in their homes. These individuals respect the people around them and love their city. In Airbnb, they have found a service that allows them to screen out bad guests and select only those with good reputations.

These people are renting out the homes they live in, so they have every incentive to choose guests carefully and protect their homes and neighborhoods from damage, noise, and danger. And that’s exactly what they do.

This is a debate about whether to allow regular people throughout New York to open their own homes to travelers and help pay their own bills while doing so. Many times, our hosts are simply renting out a couch or a spare room. Or maybe they rent out their entire homes once in a while to go on vacation or travel for work.

These are not illegal hotels. These are amazing stories within a core community of hosts and travelers adding to the diverse fabric of New York.

It is time to fix this law and protect hosts who rent out their own homes from time to time. In New York, 87% of Airbnb hosts list a home they live in. They are average New Yorkers trying to make ends meet, not illegal hotels that should be subject to the 2010 law. That’s why we have been working with city and state leaders on potential legislative solutions that will help New Yorkers share their space and bring travelers to neighborhoods throughout all five boroughs.

We will keep you posted on those efforts, and we are hopeful that this case will provide the final catalyst for lawmakers to fix a well-intentioned but overly broad effort to stop illegal hotels.

Comments

  1. N. McC. says:

    How can we cancel our reservations as hosts without incurring penalties?
    Can someone PLEASE explain this?

    • I’m with you. Does this mean we should now cancel upcoming bookings? I need more of an explanation here.

  2. Anton M says:

    Does anyone know how he got caught? Did the neighbors complain?

    • That’s the first question I had when I heard the story. The only other case of a host being fined that I know about was brought to court by the hosts’s landlord, who happened to have a few apartments in the same building or area listed on AirBnB himself and just wanted to destroy a competitor.

    • From what I read, cant find link but a building inspector came by on an unrelated matter for inspection as happens very often in buildings and bumped into a Russian guest who spilled the beans. Most likely not realizing the issue.

      Now that this is very public, hosts had better be like Jay Gatsby, “a guy who doesnt want trouble w/anyone” as far as their neighbors are concerned. One angry neighbor can sink a ship.

      Such classic Stateism!

    • All it takes is one call to 311.

  3. julie lee says:

    How did the police find out about him renting his place??

  4. You should have thought about this in 2010! When Governor Patterson was rumored to be on the verge of vetoing the law, when there was intense lobbying going on from the Hotels to sign it, which he finally did, where were you?! What were you thinking? What were you spending money on then? You should have been lobbying against the law then, not trying to damage control now! Now it’s only going to get worse, and appeals won’t go anywhere, it’s the law that needs to be repealed – the law that should not have been passed in the first place! Instead, in 2010, it was up for airbnb hosts to organize themselves into sending online signatures to Albany – completely useless as it was, of course!

    • I cannot agree more with this comment. It’s just a money war in a legal form started by the NYC hotel industry aimed at the emerging and rapidly developing private vacation property market. If you are in the business of disrupting someone’s business, you should expect them to react with a counter -attack and be prepared to fight back. Still, I’d like you guys to comment on this source :
      http://open.nysenate.gov/legislation/bill/S4263-2011

    • Ditto

  5. Thank you, David Hantman for your GOOD work, and BRAVO to Airbnb an AMAZING service! GOD Bless!!!

    xoxo, R!

  6. WillieG says:

    Relationships are a large portion of our Airbnb experience. Most notable are all the wonderful reviews we acquire. What hotel chain in the world gets upto 90% reviews from their guests. I know I treasure each one as I have acquirrd a multitude of new friends whom I have shared not only my home but also my life views and positive likes and differences with. No judge in the world can strip us of the relationships we have built. This in pursuit of an economic stability we have been able to acquire in an otherwise bleak economic time. It appears this judge wouldn’t. Mind being the negative catalyst New York needs to foreclose on more homes and strip our neighborhoods of hard working, Giving, Tax paying NYC homeowning Citizens. Then again if he (judge) would rather increase the number of people on public assistance for the sake of maybe a monopolizing few buddies ( I am just sayin!) Then maybe we should ask more about his relationships!

  7. michelle says:

    Does this mean i should cancel my programmed hostings? I live in NYC and if he got in to trouble, we all can! I cant afford fines.

  8. Just wondering how does this law applies to COOP apartments, which there are more of in the five boroughs of NY compared to condos? I advertise my condo in Puerto Rico, but would also advertise my apt in the borough of the Bronx. It’s already challenging enough to live in this great city and it just seems that any creative solution to make ends meet is met with a brick wall.

    I think it’s great of Airbnb to step in for their constituents in cases like this.

  9. Jana Fox says:

    Can you post a link to the NY law as it stands now, so we can read it and know if we are in violation?

    Thanks!

  10. I see a possible reason for these laws being cracked down on being that Michael Bloomberg wants New York City to be a rich town. He has said for years that he wants all the people who are not rich to be pushed out of the city and to bring in more and more rich people. He’s tried and succeeded in many ways so far. One is raising rent and it keeps going up and a lot of people can’t maintain it so they have to leave. But airbnb provides a great opportunity to have a little help paying rent to be able to stay in your home and not have to sacrifice your dreams by working constantly to make more and more money – which is what they want. It also provides a great chance for travelers to find cheaper places to stay rather than give all of their money to the only-expensive hotels in the city – which is what they want as well. So I’m sure they realized airbnb is just another thing standing in their way of all of this and realized they had a law in place that allowed them to do something about it. Something has to be done and we have to stand up for our rights as citizens of this city and individuals who shouldn’t be told by anyone how to live and what we can or can’t do in our own homes.

    • Bloomberg did not create or sign this law… the law was passed in Albany by Gov. Patterson.
      Also, Bloomberg does not raise rents, landlords do that.
      AirBnB exacerbates the housing shortage in NY, creates real estate speculation, pushes rents higher and destroys the local socio-cultural fabric of local communities.
      After all, why would a landlord rent an apartment to you, a fellow NYer when they could get 3 times the rental income renting to tourists?
      How interesting would NY be if the only lived here?

      Think about it.
      This law prevents this.

      • anonymous host says:

        Well, as a host who does well as I created an occupation for myself after losing my job in the finance crash, if I owned a building, I would do everything to rent out to travelers as well as full time tenants. I would do everything legally, pay said taxes. This is America and if you can provide a better product or service than the next guy, you can do it! Unfortunately, money is the root of all evil and now money is what made this law come about. Greedy politicians easily being swayed by the dollar to push a certain law. Greedy hotel stakeholders that don’t realize if they didn’t charge 500-1000/night here in NYC they would have more rooms filled. This is the tip of the iceberg and much more will come out of this..

  11. Hi,
    First of all, I love AirBnB and I (still) do a lot of business with you folks… all legal.
    But c’mon….
    “We believed, and still believe, that as long as a host is present during a stay, the stay is legal.”
    Really?
    I mean, we all know Nigel was not present in this case… He rented out his room while he went away for a few days. (source: NYTimes)… So according to your own statement quoted above, how was he complying with the law? He wasn’t there.

    Also… if you seriously believe “so long as the host is present during the stay, the stay is legal”… Then why is there an option to select “Entire home/apartment” when searching for a place to stay in NY?

    Again, as I said, I love AirBnB yada yada yada… but when the law was up for a vote in Albany, AirBnB did very little to disuade the vote. (Compare your meager actions in Albany to what the successful fight the soda industry put up against the proposed ban on super size sodas). Perhaps that may not be fair considering the comparison of an entire soda industry with that of one company; but then again… Airbnb does have competitors it could have joined forces with.
    And when I wrote AirBnB asking for guidance with the matter, I got a very standard form letter from you folks basically saying, nothing we can do, comply with the law, have a nice day.

    Perhaps I am being overly harsh but seems to me the problem now is not so much the law or it’s enforcement, but how the negative media will aversely affect business at AirBnB.

    Either way, good luck… While I would like to see AirBnB prosper and reach a positive outcome for itself, it’s hosts, and guests, I don’t think you’re going to be able to BS your way out of this.

    All best,
    Alex

    • Well said, Alex. I am also a big fan of AirBnB and I wish there weren’t any legal hurdles, but I find it sort of funny and sort of ridiculous for individual hosts like Nigel W. or for the company as a whole to play dumb this way. Obviously tons of people are renting out their own rentals– not even places they own– full-time or close to full-time, for exorbitant amounts of money, while their landlords who legally own the building have no idea what’s going on. I don’t want the fun to end, I’ve benefitted from it hugely, but I don’t see how anyone can argue with a straight face that the whole thing is totally legit. It seems to me that, like Napster, all too-good-to-be-true things must come to an end.

    • In this case, Nigel was not home but his roommate was present the entire time. Normally if you are present there is an exemption which allows you to rent to a guest. What happened in this case? Although that exemption exists, which also was Nigel’s defense, however, the judge’s interpretation of some parts of the law made the exemption, in his view, not applicable in this situation. The law allows a host to rent to a “lawful boarder” for less than 30 days. Nigel was out of town but because the guest did not interact with Nigel or his roommate, the judge felt that the exemption should not apply here.

      The judge interpreted “Boarders and lodgers” to mean “occupants who share the life of the dwelling with its permanent occupants.” In this case, he felt that they rented to “complete strangers who have no, and are not intended to have any, relationship with the permanent occupant.”

      This case was decided by a Judge on NYC’s Environmental Control Board, which is a low level court. ECB’s decisions DO NOT set a strong precedent for state law. So this judge’s interpretation can be appealed and overturned by other courts which I would think is going to be their next step.

      Hope that helps you understand!

  12. Bones Rodriguez says:

    I have what I think is a very simple solution…

    Since the problem is that Hotels are obviously feeling that their business model is being hurt, why don’t we just say that we are NOT renting the actual space, but the SERVICES that accompany it, and the room (or bed, or whatever) is free?

    In other words, we charge for our service of HOSPITALITY, or of TV use, or of INFORMATION ON NY, etc.

    Since the law is being twisted here against the hosts, why not use it FOR us instead?

    We can sell SOMETHING ELSE and be legal.

  13. I hope this gets worked out. It also provides excellent apt style living for tourist to NYC who can’t afford increasing hotel prices and don’t want to stay in hotels in crowded tourist areas.

  14. anthony says:

    I suggest that an insurance/legal defense fund be established in which hosts that end up being targeted by the courts are provided with a good attorney to represent them and if a fine is issued that the fund be used to pay that fine. Every host that contributes say a dollar to the fund would be able to draw on it if needed. We could start with Nigel.

  15. Rose Huang says:

    Thank you for helping the hosts,

  16. I’m not entirely clear on this particular case, but my understanding of the NY law is that in order to host guests for under thirty days the host has to continue to reside in the dwelling. There is no mention of friendship, and how exactly does one prove friendship?

    The other part of the law, as I understand it, is that hosts can rent their space without being present in the dwelling provided the rental is at least thirty days in length.

    Again, I’m not clear on the specifics in this case, but, from where I stand New York is getting more tourism, more money brought in by travelers who could otherwise not stay in such an expensive city (that offers not hostels), and introducing travelers to neighbourhoods they would never have visited otherwise-thus bringing more money into those areas. So where is the harm? I feel that New York should focus more on the murders, rapists, thieves, and violent abusers than going after the regular citizens of the state who are simply making some money to stay afloat while offering accommodation to travelers who could otherwise never visit New York because hotels are just way too expensive.

    So, what is this REALLY about? Who is behind these lawsuits? I feel like the hotel industry seems threatened, but the people using Airbnb are not the kind of people who want to stay in a stuffy, tiny, over-priced hotel room. So, changing the laws or being extra clear about the laws is very important. Separating Airbnb hosts from illegal hotels is crucial. And holding the judge accountable for creating un-provable and rather silly expectations to to rather clear law in order to make money off the average citizen, is reprehensible. Our government should be protecting us, representing us, and treating us with respect. Not catering to the hotel & tourism industry.

  17. I noticed a lot of people commenting looking for more details on the exact laws in NY.
    I found this site that spells things out: http://ny.curbed.com/archives/2013/03/25/an_introduction_to_new_yorks_short_term_rental_laws.php

    If you reside in your home/apt, and rent an extra room and you still live in the apartment then it is not illegal. However, it appears this judge added some extra expectations to the law, which are not there (friendship or relationship expectations…)

    It scares me too, but cancelling only makes them win. I’m on disability & my rent is too high. Section 8 is gone & public housing is over-run by druggies and the list is years long! So, in order to live here I need this. I say we stay and fight! There are many illegal listings, but if yours follows these laws then stay on Airbnb. I’m not sure how they expect to take everyone in NY to court.

  18. Lance S. says:

    This post is disappointing. The best you can do to warn people that they might be breaking the law and getting fined $1000′s of dollars is:
    “As always, we encourage all of our hosts to understand and obey their local laws. But this judge’s decision demonstrates how difficult is for hosts and even companies like ours to adequately understand laws that were not meant to apply to regular people hosting to make ends meet.”

    So you’re saying obey the local laws but they are hard to understand and don’t apply to regular people. Which is actually not true since a “regular person” was just fined $2400 and “understanding the law” is not a consideration to most judges.

    Can someone at AirBNB without a degree in PR actually speak honestly about what could happen to you if you get charged? Don’t skirt the issue. Be honest.

    BTW, love the product/service but not the post.

  19. Michelle Ramos says:

    Would airbnb consider and advanced option for month by month. Not 30 days, but blocks by actual months? Ex. Jan 1-31, Feb 1-28, March 1-31, and so forth.

    This way I could still use your website with travelers regardless of when they come and go in a given month.

  20. Help us get the law passed for co-ops, not just private homes and condos!!!

    Co-ops are over 50% of the housing stock in NYC

    People who own coop shares are governed by some of the same laws as rental tenants but also corporation law. Coop boards can and do write rules into the coop bylaws and proprietary lease to prevent Air BNB type rentals.

    What can be done for coop shareholders who want to rent extra rooms??

    • “What can be done for coop shareholders who want to rent extra rooms??”

      Simple:
      Get a roommate or rent to people who are willing to stay for 30 day minimums.

    • As you stated, most,if not all, Co-ops have rules to prevent hosting a Bed & Breakfast/Hotel/Short-term rental:

      1) You cannot run a business out of your apartment;
      2) Guests are limited to immediate friends and family; and
      3) Subletting is not permitted, except for extraordinary circumstances. And in certain Co-ops, subletting is only allowed for family members.

      As an Airbnb host you would be in violation of at least one, if not all, of the above rules. Again, Co-ops vary in terms of enforcement of their rules, but usually, you will face recriminations either from the management company, your neighbors or the Board.

      But, for sake of argument, let’s accept we live in some sort of bizzaro world of New York real estate, and your coop will allow you to host a Bed & Breakfast from your apartment. You will most likely need to do a few things:

      1) Obtain Board approval;
      2) Obtain liability insurance (with coverage from $1 million or more) and present a COI (Certificate of Insurance) to the management company listing the Co-op, the management company, each and every shareholder/tenant as insured;
      3) Enter into an agreement between you, the coop and the management company, agreeing to their terms and agreeing to provide proper notice to your neighbors. You will most likely be required to provide at least two weeks notice to your adjacent neighbors that: (i) you are using you apartment as a vacation rental/B&B and (ii) you expect a *guest* for a certain time period. You probably would be required to give notice for each and every guest stay.

      Aside from the hurdles of getting Board approval and providing notice to your neighbors, obtaining the liability insurance is the biggest obstacle. Will the insurance be obtained for each and every unique guest stay; or will you obtain insurance for the operation of a B&B out your apartment on a continuous basis? Either way, the cost of obtaining coverage would probably nullify any income you receive as an Airbnb host. (And note that the insurance coverage provided by Airbnb would not apply.)

      But, let’s jump back to the real world, and face the facts. Coops do not operate under any real state or federal laws. Coops are administered by a management company, but ruled by a Board which you as a shareholder had a hand in electing. If you want to have a law passed to allow for B&B rentals in coops you would need to advocate for the complete overturning of the very structure of how a coop operates. You would have to strip the coop board of its power. A system which has not been challenged since its existence, which is probably a century.

      Good luck with that.

  21. Here is what I found when researching on the status of this legal war of the NYC hotel lobby on private vacation property market:
    http://open.nysenate.gov/legislation/bill/S4263-2011

    Dear fellow AirBnB hosts and David Hantman, I would like to hear your comments on the above source.

    Regards,

    Marina AirBnBn host

  22. I wonder if AirBnB will help the man pay the fine?

  23. Now I tell all my guests to say we’re friends if anyone asks. It might even be good to connect more robustly with your future guests before they arrive, to have some rapport with them. This way, if someone sees you meeting them with bags, etc, it looks more genuine, not like you’re a hotel concierge. Remember, you’re always allowed to have people you know stay with you.

    The danger will always be that your landlord or neighbors find your listing; in that case, you might want to change its setting to “invisible” for stretches of time (days at a time, maybe during slow seasons, or randomly during the day) to lessen that possibility.

  24. Clearly, this is not just an issue in NYC:

    http://goo.gl/udYbh

  25. Here’s what I’m choosing to believe/do. because the alternatives (craigslist, sublet.com, and vacation rental sites) are subpar and waste my precious time, of which is my career that serves others! not being an airbnb host.

    This is all part of the process of how law changes to suit changing times. Relax. Media hype is part of it too. Unfortunately few humans can think of everything. Many humans can. That’s what’s happening here. Until then I’m opting as an anonymous airbnb host to go under radar to the best of my ability. Step one: make my address unknown until through the ‘inquiry process’ and friendship building I trust that this person is going to use my ‘service’ as intended. A ‘service’ which I claim as income after expenses on my taxes; therefore the state gets something…
    Here’s my basic question and sense of what the answer is. How many airbnb hosts have actually been fined? Prob very few, just Nigel… How many people in a host situation like us in general (incl non airbnb) have been fined? Perhaps more… Yet not much in comparison to how many are doing it. Does the city really have the resources to ‘go after’ these hosts? Or is it just through complaints, neighbors, guests, etc… If so, more relationships to navigate. Lay low, keep your mouth shut to neighbors, tell guests they are to say they are friends/family. Where there’s a will there’s a way!!!! Around any law.

    An anonymous airbnb host.

  26. I live under someone illegally renting out his apt, and it’s been a nightmare! A different group of 6 people every week, clomping around the uncarpeted living room over my studio apartment, rolling their bags, moving furniture around, coming and going all hours of the day and night. The massive impact noise cannot be drowned out with earplugs or white noise machine. I’m so stressed and exhausted at this endless barrage of noise over my head and past my door. I work from home so my business is suffering as it’s impossible to concentrate. So you people complaining about this ruling need to look at it from the suffering neighbor’s perspective. Plus its dangerous for our small condo building—these people are strangers from around the world. What if someone fall down the stairs and sues us? Brings in bedbugs, disease? Since he started these illegal hotel rentals, our garbage door is broken and our foyer carpeting is stained. So hooray for the crackdown! I want my life back!

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