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Attorney General: Airbnb Rentals in NYC Are Overwhelmingly Illegal

Image: Attorney General: Airbnb Rentals in NYC Are Overwhelmingly Illegal
New York State Attorney General Eric T. Schneiderman. (Andrew Burton/Getty Images)

By    |   Thursday, 16 Oct 2014 11:21 AM

New York's attorney general slammed Airbnb in a new report released Thursday, saying nearly three-quarters of its short-term rentals listed in NYC are illegal, and, moreover, have cheated tax collectors out of millions of dollars.

"This report raises serious concerns about the impact Airbnb can have on the economy of New York and cities like it," said AG Eric Schneiderman, according to the New York Post.

"We must ensure that, as online marketplaces revolutionize the way we live, laws designed to promote financial accountability and even physical safety are not forsaken under the pretext of innovation."

Examining bookings made between Jan. 1, 2010, and June 2, 2014, the report found that property owners and others listing short-term rentals on the website raked in hundreds of millions of dollars, with Airbnb's cut totaling $40 million. Altogether, the report examined 497,322 private stays in 35,354 unique places that were for less than 30 days.

A whopping 70 percent of these listings are illegal, as New York outlaws rentals of less than 30 days unless the owner is present. On top of this, a significant percentage of the listings were made not by property owners, but by lease-holding renters, an outright violation of city subletting laws.

Schneiderman further pointed out that hotels in New York pay a 14.7 percent occupancy tax, and, by acting as hoteliers, Airbnb's hosts would be subject to such a tax if they were licensed, legal operations in the first place.

"Few Airbnb hosts appear to have filed the paperwork with New York City necessary to remit hotel-room-occupancy taxes," said the report. "Nor did Airbnb collect any of the hotel taxes owed for the reviewed transactions."

Downplaying the report, an Airbnb spokesman, Nick Papas, said, "We need to move forward. 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."

TechCrunch reported that San Francisco recently came to a compromise with Airbnb and similar rental sites by legalizing and regulating. On October 7, it abolished a statute outlawing less-than-30-day rentals, placed a limit on non-hosted rentals of 90 days, created a public registry for hosts, and extended the city's hotel tax to Airbnb and its hosts.

Many have said the San Francisco statutes have created a template for other cities to follow, and expect New York will ultimately create a similar set up.

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New York's attorney general slammed Airbnb in a new report released Thursday, saying nearly three-quarters of its short-term rentals listed in NYC are illegal, and, moreover, have cheated tax collectors out of millions of dollars.
attorney general, airbnb, new york
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2014-21-16
Thursday, 16 Oct 2014 11:21 AM
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