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AirBnB / short-term rentals ruled illegal in New York

My dream NYC AirBnB! click on picture to access this posting

My dream NYC AirBnB! click on picture to access this posting

I first used an AirBnB stay in May 2012, and since then have stayed in AirBnB properties in five cities. Often times an AirBnB provides a helpful (and cheaper) alternative to staying in hotels, especially if you are traveling with family. One of my best travel stays, in fact, was at a 2-bedroom AirBnB loft apartment that I got for $90 a night.

But even though AirBnB renters may face some risks and inconveniences that come with staying in someone else’s house vs. a hotel, AirBnB landlords (or “hosts”) arguably can get in bigger trouble. A New York judge just ruled that AirBnB is illegal for stays less than 30 days. The landlord in question was fined $2,400 (down from an initial judgment of $7,000 in fines).

This isn’t limited to New York. According to the CNET article:

As Airbnb continues to shake things up for the hotel industry, it’s increasingly running into issues with the law, particularly in areas where the law is not clear cut. It’s not just in New York — officials in the company’s hometown of San Francisco are concerned about property owners potentially using its service to get around local tenant protections and land use codes.

I am considering taking my parents to a trip to the East Coast next year, and had planned to stay in AirBnB apartments. But now I am a little hesitant to stay in AirBnB in Manhattan. I don’t want to deliberately break the law… Furthermore, this ruling might make many AirBnB landlords gun-shy and take down their postings.

Have you rented out your house with AirBnB? Are you worried about the legal liabilities? 

  • Meg - When my husband and I moved to NYC, we rented an apartment on AirBnB to stay in while he started his job and I searched for an apartment. It was great because we could rent in a residential area without hotels where we were near the apartments we were looking at. I would use it again.

    <y mother had a poor experience with it, but the site sided with her against the landlord and refunded her money.ReplyCancel

    • Well Heeled Blog - I'm glad your mom's case turned out well. Was it a situation of pictures misrepresenting the actual apartment? I've been a little disappointed in one of the AirBnB cases, but have also been very pleasantly surprised. ReplyCancel

  • debtroundup - I have not used Airbnb, but I have heard good things. I think this ruling is ridiculous and needs to be changed immediately. I know these laws were created some time ago and it now needs to be updated.ReplyCancel

  • SavvyFinancialLatina - We used Airbnb in DC and thought it was cool. ReplyCancel

  • Kyle@DebtFreeDiaries - Wow, seems like such a cool idea! Too bad New York has decided it was illegal. We need more competitive options for lodging in the marketplace. I wonder if similar rulings will pop up elsewhere? ReplyCancel

  • Happy_Homeowner - I love Airbnb!! I think it's a shame that this is happening with the law issues–it's such a great service and option for many people who are both looking to save and make money. ReplyCancel

  • CashRebel - I love the idea of airbnb, and i think its a shame that its getting beaten up. There has to be a way for us americans to start to share more. Im sure this ruling will not be the last one. Fascinating article! ReplyCancel

  • Janine - This is crazy! I can't believe this – i just used Airbnb in NYC! ReplyCancel

  • Laura Vanderkam - I think it's a great service too, but one reason rates are cheaper than hotels is that a one-night landlord doesn't have to follow all the same rules as hotels. You can debate whether all the regulations on hotels (and, incidentally, landlords in NYC) are good or bad, but it doesn't seem fair that they don't apply to everyone equally. It will be interesting to see how this winds up playing out — didn't uber (the car service) get ruled against in NYC too? ReplyCancel

    • Well Heeled Blog - I agree. Even though it's great for my pocket book, it does seem unfair that one-night landlords can get by without following the regulations of hotel-owners. ReplyCancel

  • JW_Umbrella Treasury - I haven't used Airbnb yet, but it seems like a fantastic option. And, I love the Jr. 1 Bedroom that you posted in the picture. I would stay there in a New York minute! ReplyCancel

  • Little House - That stinks! I've looked into AirBnB before, but never rented anything from them. Hotels are so expensive in New York, it seemed like a great way to save some money. That's an unfortunate ruling. ReplyCancel

  • The Asian Pear - ack. Well, there goes my plans for a quick visit to NYC and staying with airbnb too. I don’t think I can afford otherwise. ReplyCancel

  • CT Yankee - If the property in question is owner-occupied, what is the difference between an AirBnB stay and having a house guest for a few days? In MHO it's very much the same thing. I used AirBnB for a Toronto trip and saved substantially over what a 5 night hotel stay would have cost. I will be using AirBnB in Las Vegas in a few weeks and again will be saving a substantial amount vs a stay in a strip hotel.

    It is not the politicians' business to get involved in what hotels may consider unfair competition. The 2 venues (hotel vs home or apartment) are far from being the same thing. With an AirBnB stay it's very much like staying with a friend, while at a hotel a completely different set of amenities are expected. I recently traveled to Phoenix where an AirBnB stay was no where near as convenient as a hotel, and the savings was minimal. I opted for a hotel.

    As a former member of my local land use board I can understand their concerns but quite honestly I do not agree with them. Unless there is a nuisance factor involved, the politicians should stay out of it. Let the hotels and the AirBnB hosts duke it out on their own. ReplyCancel

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