Attorney General: 72 Percent of Airbnb Rentals in NYC Are Illegal
While San Francisco is rolling over for Airbnb, New York's attorney general is going after the so-called "home sharing" startup. After subpoenaing records from thousands of Airbnb's New York users, Attorney General Eric Schneiderman has issued a report on the $10 billion rental site's impact on the city. What he found isn't pretty.
According to the report, 72 percent of Airbnb's rentals in New York violate zoning and other city laws, making them illegal. The "vast majority" of revenue is earned in what the Attorney General describes as "gentrified or rapidly gentrifying neighborhoods." What's more? Just six percent of "Commercial Users" dominate the rental market.
Ninety-four percent of Airbnb hosts offered at most two unique units during the Review Period. But the remaining six percent of hosts dominated the platform during that period, offering up to hundreds of unique units, accepting 36 percent of private short-term bookings, and receiving $168 million, 37 percent of all host revenue.
The report shatters Airbnb's marketing myth that the service helps ordinary people pay the bills by renting out spare bedrooms. The report points to one operation that controls 272 listings, taking in $6.8 million in revenue. "Well over" one hundred users control ten or more listings each.
Airbnb doesn't dispute the attorney general's findings, the New York Times reports:
Airbnb declined to aggressively dispute the numbers in the report, which draws on four years of data it provided to the attorney general after a court fight.
"We need to move forward," an Airbnb spokesman, Nick Papas, said. "We need to work together on some sensible rules that stop bad actors and protect regular people who simply want to share the home in which they live."
As we learned in San Francisco, Airbnb helped write legislation governing their service—and made sure the law had no teeth for enforcement against "bad actors."
But the moneyed startup is going to have a harder time lobbying its way to legality in New York. Regulators are already gearing up to go after Airbnb's most egregious offenders:
Mr. Schneiderman and city regulators will also announce Thursday a joint enforcement initiative to shut down illegal hotels. Various regulators will investigate violations of building and safety codes and tax regulations.
"Anyone operating an illegal hotel should be on notice that the state and city will take aggressive enforcement actions in this area," said Mr. Schneiderman. "A slick advertising campaign doesn't change the fact that this is illegal activity."
Sounds like Shell might not be the last Airbnb poster girl to find herself evicted.
Read the attorney general's report below:
To contact the author of this post, please email kevin@valleywag.com.