The Real Deal New York

Judge evicts rent-stabilized Airbnb host in landmark decision

Hell’s Kitchen resident was renting out his luxury unit in a Related Companies building

February 20, 2015 12:45PM

450 West 42nd Street in Hell's Kitchen

450 West 42nd Street in Hell’s Kitchen

In a decision that could make it easier for landlords to crack down on rent-stabilized tenants who are renting out their discounted apartments on Airbnb, a Manhattan Housing Court judge evicted a man who was renting out his luxury apartment in a Related Companies building.

The ruling is the first to outright evict a tenant benefiting from rent controls for using Airbnb without giving them a second chance, according to Frank Ricci of the Rent Stabilization Association. While the decision does not count as precedential case law, it can be cited in future rulings to help take down Airbnb hosts, the New York Post reported.

The apartment in question, at Related’s 450 West 42nd Street, was advertised on Airbnb by tenant Henry Ikezi for $649 per night, about triple what he was paying. The apartment’s market value is approximately $9,000, but Ikezi only paid $6,670 per month because it was rent-stabilized. The building also received a 421-a tax exemption.

While Ikezi claimed that he lives in the Hell’s Kitchen unit, Related held that he actually lives in a million-dollar-plus home in Queens neighborhood Jamaica with his family and uses the apartment for extra income.

Related is ramping up its opposition to tenants renting apartments on Airbnb. “They will go after anyone who is not using their apartment properly,” said Todd Nahins, the firm’s lawyer. “They will not tolerate the apartment being used as a hotel.”

A report released earlier this month found that more than half of the city’s Airbnb listings may be illegal. In January, the City Council held a marathon hearing on the contentious issue. [NYP] — Tess Hofmann

  • Two Piece and Biscuit

    win

  • BH

    is it ironic considering there’s a Yotel attached to this building?

  • Monica McLaughlin

    “Ikezi only paid $6,670 per month because it was rent-stabilized”

    How is that rent stabilized? I thought that once an apartment hit $2500 a month, it came off rent stabilization? Is there a typo here?

    • BH

      it’s an incentive given by the city. there are plenty of luxury buildings that are rent stabilized around NYC. The rent stabilization benefit will eventually end and then market rate rent takes effect. Destabilization usually occurs in older buildings that are completely renovated and upon a new appraisal if the rent exceeds $2500 / Month then it is destabilized. Notice will be given to the next tenant to occupy the unit that it has been destabilized, it is the law.

      • Monica McLaughlin

        I am confused. The apartment stays rent stabilized although the rent has risen above $2,500 so long as the existing tenant remains? Once they vacate, the apartment is then deregulated?

        • Rentstab

          Yes. Apartments stay rent stabilized until the legal rent exceeds 2,500 and the owner deregulates. For example, you can have a rent stabilized apartment with a legal rent of $3,000 a month but it only rents for $2000. The different between the legal rent and amount paid is called the preferential rent. This article is referring to another beast of rent stabilization relating to 421a which is much more confusing and I wont get into details on that.

  • Larry Commercial Mortgage

    Good decision, good start to reducing these abuses. And Monica – the units are still under rent stabilization as long as the 421-a benefits are in place. % increases for these units are set by the Rent Guidelines Board (RGB) each year, so they aren’t truly ‘at market’.

  • Ashwin Kumar

    The “safety” issue is a weak argument to make, in my opinion. While
    tourists are being beaten and shot downtown at random, I don’t think a
    house fire or other safety lapse at an Airbnb rental will raise many
    eyebrows.

MENU