NYC Apartment Swapping Service Is Legal, Sort Of
Airbnb, one of many short-term apartment renting and swapping sites, scored a legal victory for one of its users with a New York City board finding that Nigel Warren did not violate city laws when he rented his apartment out for less than 30 days. But the opinion also shows how narrow the exception to those city laws is.
Who’s In There?
Sites like Airbnb, Uber, Lyft, and Hailo allow users to find and rent apartments in big cities like New York for short terms. The sites directly compete with hotels, which are much more expensive. But the sites have come under fire from city governments — especially New York City.
“In a city the size of New York, any deviation from the intended use of property tends to draw attention,” observes Christian Hylton, a partner in the land use and government relations practice at Abrams Fensterman in Brooklyn, N.Y. “The city is always concerned that property owners operate within their legal permitted use because of the potential of illicit [or] illegal use and liability.”
“While some landlords will turn a blind eye to this kind of use, as long as the rent is paid, others are concerned with the potential liability they will have if a tenant rents their apartment through Airbnb or a similar site,” he adds.
Warren’s use of Airbnb to rent out his New York City apartment to two Russian women for a week in September 2012 was discovered by a building inspector. That resulted in a $7,000 fine from the city, including several building and zoning code violations, according to a FastCompany article.
An administrative law judge for the New York City Environmental Control Board in May 2013 nixed the code violations and lessened the fine to $2,400 but upheld the core violation.
Then, at the end of September the full board reversed the fine, holding that Warren had not violated the city’s illegal hotel law because the apartment’s official resident — or in this case, his roommate — was there, according to Forbes.
Airbnb calls this a victory, but it’s a narrow one.
Roommate Held the Key
“In the appeal, we and Nigel argued — and the appeal board now agrees — that under New York law as long as a permanent occupant is present during a stay, the stay does not violate New York’s short term rental laws,” said Airbnb’s head of global public policy, David Hantman, in a blog post.
“Much of the New York law is confusing, with some provisions applying to certain buildings and not to others,” said Hantman. “But this shared space provision was crystal clear.”
The “shared space” provision is an exception to the general rule in the New York City building code that properties like the one Warren occupied (typical apartment buildings) cannot be rented for less than 30 days at a time, explains Hylton.
“The ‘shared space’ exception allows for a rental use as long as the permanent resident of the home is present,” Hylton says. “This was the key issue in dispute in the Warren case.”
So under this decision, short-term rentals are legal, but only if you or your roommate is home. Which seems to kind of defeat the purpose of renting your apartment out, but the decision should help some renters — those with roommates.
Airbnb has faced similar issues in other cities around the world. “Airbnb is facing scrutiny in Los Angeles, particularly in Silver Lake, for violations of local zoning ordinances,” says Hylton.
The company insists that it is good for the economies of the cities where it operates, because it helps renters make extra money, supports jobs, and increases tourism.
New York Attorney General Eric Schneiderman on Oct. 7 reportedly subpoenaed Airbnb for data on all of its 15,000 registered users. The target of the investigation is landlords, according to what the AG has said; he is looking for ones who have removed their apartments from listings and are instead running them as hotel rooms in violation of the same illegal hotel law.
Airbnb is fighting the subpoena, according to another blog post by Hantman. On Oct. 9, the company filed a motion in state court objecting to the “broad sweep” of the AG’s demands. “[W]e are committed to standing up for our community,” said Hantman. “This may be a tough fight, but it is one worth fighting.”
How that fight ultimately plays out will depend in large part in enforcement, says Hylton. “The usage of these sites is so widespread and hard to enforce. What emerges is the juxtaposition of technology, how people live their lives in the 21st century and how the existing laws come into conflict.”