Mayor cracks whip on broker’s short-term rental scheme

UPDATED July 13, 2022, 10:15 a.m.: The four-story building at 344 East 51st Street looks innocuous, but it was one of six properties throughout the city that a real estate broker used to run a $2 million illegal short-term rental operation, a city lawsuit alleges.

Mayor Eric Adams and his Office of Special Enforcement announced the case outside the Midtown address Tuesday.

Their lawsuit states that Arron Latimer, as well as building owner Apex Management and Apex’s managing member Esther Yip, ran the operation from January of 2018 to March of 2022, using several LLCs and lodging websites including Airbnb.

At the same time, the East 51st Street building was issued violation after violation for such hazards as inadequate fire alarm and sprinkler systems and insufficient ways to get out in an emergency.

The violations were all ignored.

Besides being illegal under a state law governing stays of fewer than 30 days, the rentals were grimy, according to user reviews highlighted by the Adams administration. Guests described their accommodations as “astonishingly dirty,” with mold, soiled linens and blood stains, and communications with their host as “robotic or automated.”

Other guests warned future visitors to “be aware that the address or listing is different than the actual location.” To advertise listings, Latimer had used stock images, fake names and fake descriptions.

“For years, Arron Latimer and the other defendants used fake host profiles on popular sites like Airbnb to deceive and lure unsuspecting guests into paying for substandard lodging at illegal rental listings,” Adams said. “Not only did they unlawfully pocket millions, but they endangered guests and deprived New Yorkers of an entire building’s worth of long-term housing.”

Latimer could not be reached for comment. The city declined to identify the other five buildings.

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Housing advocates and the hotel workers union have been pressing the city for years to stop the use of apartments for short-term rentals, generally by visitors who have no idea they violate state law. The lawsuit comes at a time when New Yorkers’ struggle to find affordable housing is getting worse, with soaring rents and shrinking inventory.

“Every illegal short-term rental in our city represents a unit of housing that is not available for real New Yorkers to live in,” said state Sen. Liz Krueger, who authored the law that makes home rentals of shorter than 30 days illegal if the permanent resident is not present. “In the middle of an ongoing affordable housing crisis, every single unit matters.”

Latimer’s operation lasted four years before it was identified using data obtained through Local Law 146 of 2018, amended by Local Law 64 of 2020. The laws were hailed as breakthroughs in the fight against illegal rentals, but the case announced Tuesday is the first one they have produced.

The measures require online short-term rental platforms to report quarterly data on bookings to the Office of Special Enforcement, including the address of the rental, the URL of the listing, details about the reservation, contact information about the host and bank accounts to which payouts were made.

Airbnb disbursed $2 million in payments to Latimer, including at least $987,729 from the East 51st Street building, according to the data. Latimer used at least 27 separate host accounts, advertised nearly 80 listings, conducted more than 2,200 transactions, and deceived more than 6,500 guests — a violation of Airbnb’s “One Host, One Home” policy for the city.

“This operator used fake names, false addresses, and a smokescreen of LLCs to attempt to hide this illegal operation, but will now be held accountable,” said Christian Klossner, executive director of the city’s enforcement unit. “This lawsuit underscores the necessity of robust reporting requirements for booking platforms, and why the city needs the short-term rental registration program that will take effect in 2023.”

That law — which goes into effect in January — aims to prevent platforms like Airbnb from processing transactions unless the registration information matches a city database.

An Airbnb executive said in a statement that Latimer was banned from the platform months ago.

Nathan Rotman, who is in charge of the company’s public policy in the region, said it hoped to work with the city “to differentiate between the responsible hosts who should be protected under the law and operators of properties like this who have no place on our platform.”

He did not explain why it took so long for Airbnb to detect the illegal use of its service.

This article has been updated to include a response from Airbnb.