What’s New With Airbnb?

Governor Andrew Cuomo signed a bill that imposes fines for advertising on Airbnb and other home-sharing services units that cannot be legally rented under New York State and City law.

The statute prohibiting the rentals applies to ads placed in print, television, radio, mail, online, and text messages. It does not apply to rentals in single-family homes, row houses or apartment spare rooms if the resident is present.

Under the law, first-time violators face civil penalties of up to $1,000 with fines increasing to as much as $5,000 for second violations and $7,500 for third and subsequent violations.

What some homeowners don’t realize is that the penalties apply to rentals under New York’s Multiple Dwelling Law, in effect in the five boroughs of New York City and Buffalo, municipalities with populations of 325,000 residents or more. The towns of Southold, Southampton and East Hampton have their own laws regarding rentals and penalties for violation. As has appeared in earlier articles on this website, the towns of Southold and East Hampton do not permit rentals of fewer than fourteen days, and the Town of East Hampton permits rentals of fewer than fifteen days twice in a six-month period.

The San Francisco-based Airbnb filed a lawsuit against New York State Attorney General Eric Schneiderman, claiming that the New York Law preempts federal law.

Governor Cuomo spokesman Rich Azzopardi said in a statement: “This is an issue that was given careful, deliberate, consideration, but ultimately these activities are already expressly prohibited by law. They also compromise efforts to maintain and promote affordable housing by allowing those units to be used as unregulated hotels, and deny communities significant revenue from uncollected taxes, the cost of which is ultimately borne by local taxpayers.”

Per an investigation conducted by Attorney General Schneiderman, from 2010 to 2014, 72 percent of the Airbnb rentals in New York City were illegal.

Airbnb has said that 46,000 Airbnb hosts in New York City have generated more than $2 billion in economic activity.

The Towns of East Hampton, Southampton, and Southold have alleged that short-term rentals have deprived them of taxes essential to serve the community, create unfair competition with regulated motels and hotels doing business in these areas, violates local zoning laws as well as the health and safety of those who occupy these illegal rentals.

The Towns of Southold and Southampton require rental permits. The Town of East Hampton requires rental registration.