New York State legislators passed a bill today that will heavily fine hosts on Airbnb and other short-term rental sites for listings that violate the state’s short-term rental laws. The bill prohibits online apartment listings that last under 30 days and run up against the city’s multiple dwelling law. The bill calls for heavy fines for violators: $1,000 for the first violation, $5,000 the second time, and up to $7,500 for the third. The legislation cleared the New York state Senate by an overwhelming margin and now goes to the desk of New York Governor Andrew Cuomo to either veto or sign into law.
The bill was sponsored by New York City Republican Sen. Andrew Lanza. Lanza says the proposal is aimed at those who run illegal hotels in residential rental environments. It’s already illegal to rent out apartments for less than 30 days in New York City as housing laws now ban those types of short term sublets if the tenant isn’t on the premises. The new legislation adds teeth to those laws.
The vote came as part of a flurry of end-of-term approvals by the state’s assembly and senate. Supporters of the legislation say services like Airbnb enable illegal hotels that take affordable apartments off the market and drive up rental rates for the apartments remaining. It’s no secret that many people were purchasing properties solely to profit from Airbnb stays. Airbnb continues to refuse to share data that would reveal just how many of its hosts are not renting out their primary residence.
Airbnb is a massively popular service in New York City. The company acts as a middleman between tourists needing short-term rentals and residents able to provide available apartments. New York City is Airbnb’s biggest market. Thousands of visitors use the site looking for alternative accommodations in the Big Apple.
Thousands of New Yorkers help make ends meet by occasionally renting out their apartments to tourists for a few days at a time. It is estimated that more than half of renter households in New York City are paying more than 30 percent of their incomes on rent and utilities. Airbnb spokesman Josh Meltzer calls the bill “a bad proposal that will make it harder for thousands of New Yorkers to pay the bills.” Lanza claims that the legislation won’t target homeowners or interfere with property rights.
Airbnb and Silicon Valley investors like Ashton Kutcher and Paul Graham objected to the proposed rules. Numerous venture capitalists have also slammed the New York bill as harmful to innovation.