Airbnb fights back against state bill banning advertisment of illegal units

$7,500 fines would harm New York families, short-term rental firm says

From left: Linda Rosenthal and Airbnb's Brian Chesky
From left: Linda Rosenthal and Airbnb's Brian Chesky

New York state legislators introduced a bill to ban the advertisement of Airbnb listings that violate short-term rental laws, and the company is fighting back.

Airbnb sent a letter to the bill’s Assembly sponsor, Linda Rosenthal, saying that the steep $7,500 fines prescribed in the bill “could lead to bankruptcies, evictions and foreclosures of New York families struggling to make ends meet.”

The letter points out that fines for other real estate offenses are orders of magnitude lower. Landlords who fail to provide heat for their residents are charged $500 a day, it points out, and those who don’t provide smoke detectors are fined $100 a day, the New York Daily News reported.

Rosenthal told the Daily News that the letter was “almost laughable if it weren’t so tragic.”

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Airbnb has been criticized by activists and government officials for failing to police widespread violations of short term rental law facilitated by its service.

In New York, it’s illegal to sublease a unit for less than 30 days unless the lease holder is also present. According to data released by the company earlier this month, about 18,000 whole units are listed on the site for terms of less than 30 days.

Airbnb has been in talks with three of the country’s largest residential landlords – real estate investment trusts Equity Residential, AvalonBay Communities and Camden Property Trust – over a plan to cooperate and share revenues.

Back in October, The Real Deal performed a back-of-the-envelope calculation to try and determine Airbnb’s effect on rents in some of the neighborhoods where the service is most popular. The analysis found that by removing rental units from the market, the service raised Williamsburg rents by roughly $35 or $70 dollars, depending on assumptions. [NYDN]Ariel Stulberg