The Latest on Airbnb vs. The City

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Brian Lehrer: Brian Lehrer on WNYC. Now we turn our attention to a topic that's top of mind for many homeowners in New York City, the pending regulation of the short-term rental market, or what we commonly think of as Airbnb. We know this is top of mind because remember a few weeks ago when one of our guests was late, we opened the phones for a little while for people to call in on anything, and the first call we took was from Ellie in Brooklyn who wanted to say this.

Ellie: Yes, I'd like to discuss the Airbnb suit against the city. I find that the city has made a blanket decision to make it difficult for homeowners to use their homes as a means to generate income to support their families as well as support mortgages and things of that nature, and done this in the means that target large industries that are running Airbnb hotels, but the little guys are adversely affected by this.

Brian Lehrer: But the little guys are adversely affected by this. Ellie, we heard you. I said at the time during that phone call that we'd follow up and now we're doing so. Joining us now to explain and help discuss the lawsuits Airbnb and local hosts have put forth against the city's efforts to clamp down on short-term rentals as well as give us a look at how short-term rentals affect the broader New York City housing market during this crisis of affordability and in what neighborhoods most of all is Jaclyn Jeffrey-Wilensky, data reporter for WNYC and Gothamist. She's recently published a string of pieces on the topic stemming from her investigation that you can read for yourself at gothamist.com. Jaclyn, thanks for joining us. Hi there.

Jaclyn Jeffrey-Wilensky: Hi. Thanks for having me.

Brian Lehrer: You heard the caller and what he said was consistent, I think, with your reporting, that Airbnb claims it faces an existential threat in New York City. What is that existential threat as they see it and why are they suing the city?

Jaclyn Jeffrey-Wilensky: Absolutely. The existential threat that they are describing, it's Local Law 18, it's also known as the short-term rental registration rule. On its face, it seems not like much of an existential threat at all, it just requires hosts to register their Airbnbs with the city. Then after a certain grace period, in order to get paid for those listings, you have to be registered. The listings won't be bookable if they're not registered.

The reason that Airbnb is calling it an existential threat is that lots of the most popular listings will actually not be able to register at all, and so they won't be bookable, and that's because they're technically already illegal. Airbnb and some hosts are suing the city to try and stop this law from going into effect. They say that the registration process is too complicated and it's error-prone, and it's not quite clear what'll happen. The lawsuits are still in progress. The city has extended the enforcement deadline of the rule by a couple of months, though.

Brian Lehrer: What can people do in terms of renting out their homes within New York City as Airbnbs and [unintelligible 00:03:18] they do?

Jaclyn Jeffrey-Wilensky: Yes. Assuming you're renting for less than 30 days, so a short-term rental, technically, for most people, there are some exceptions. You can only rent out a room or a couple of rooms in your house or your apartment. You can't do the classic like, "I'm away and so I'm renting my entire apartment or I'm renting a unit in my home." You have to be on site and you and the guests have to be sharing a common space.

Brian Lehrer: That's so different from what I and many people who rent Airbnbs outside of New York City have experienced. You go and you probably rent a whole apartment or a whole house, and in many cases, it's not even that the person is away for a little while, they own it as an Airbnb property. You can't do that in New York legally.

Jaclyn Jeffrey-Wilensky: Yes. Most of the reason people want Airbnbs is to have a little bit more space, a little bit more privacy as opposed to this sort of like a room in someone's home where you're shuffling through the kitchen and they're sitting drinking their coffee.

Brian Lehrer: Right, I wouldn't do that. The reason for that is the housing shortage in New York and the high rents, and so they don't want to take more apartments or even private homes off the market?

Jaclyn Jeffrey-Wilensky: I think that's definitely part of it. Also, it's simply the fact that these listings, they're actually already illegal. They've been illegal for years, these full apartment listings under the New York State multiple dwelling law. It's just been hard for the Office of Special Enforcement, which is tasked with protecting the city's housing stock to enforce. They can spot-check and issue fines, but this is just broadly enforcing that rule that's already been illegal.

Brian Lehrer: The caller made the distinction between large industries, as he put it, that are running Airbnb hotels, but the little guys are adversely affected. He talked about the city making it difficult for homeowners to use their homes as a means to generate income to support their families. Is there a distinction, in your view or in the city's view, between the little guy and companies who are maybe even building apartments or buying buildings to use them as Airbnbs because they're more profitable than just renting them?

Jaclyn Jeffrey-Wilensky: Yes. The city's law, as it's written, does not make a distinction between those two very different types of hosts, but from talking to experts to hosts and just surveying the situation, it does feel like there's a real meaningful difference between those two types, the folks who are making their entire living off of renting out multiple units, what housing advocates call illegal hotels, versus a homeowner in Queens, where there like aren't many hotels to begin with, renting out their basement. It feels like there's a difference. Homeowners who host on Airbnb are actually organizing around that. They want the city to alter the law to focus more on those illegal hotel operators and less on those "little guys."

Brian Lehrer: Listeners, here's your opportunity to weigh in on this heated debate, do you currently list your property on Airbnb? Have you undergone the registration process to legally list a unit on the short-term rental market or are you glad the city is cracking down on Airbnbs in your neighborhood? 212-433-WNYC, 212-433-9692, or you can text a comment or question to that number or tweet @BrianLehrer for Jaclyn Jeffrey-Wilensky, our data reporter at WNYC and Gothamist. Jaclyn, for you as a data reporter, you've looked at which neighborhoods have the highest concentrations of Airbnbs. Give us some of what you found.

Jaclyn Jeffrey-Wilensky: Sure. We're only just starting to look neighborhood by neighborhood at Airbnb. There has been some great reporting on it in the past, but that will tell the story of which neighborhoods will be most affected by this rule change when it goes into effect if it goes into effect. It's a little tricky from a data perspective because there are like 40,000 Airbnb listings in New York City, but only a small fraction are active, are recently and frequently booked. The others, they're still technically on the site, but maybe haven't been booked in years. We're in the process now of sifting through that to target these neighborhoods.

What I will say is that it's very much not like your midtown, your Times Square, like your classic tourist neighborhoods, it's the outer boroughs where these Airbnbs have popped up. That's because there aren't many hotels there and folks need to stay there to visit family or for other purposes. It'll be interesting to see the effect it has on the non-tourist core of New York City.

Brian Lehrer: Listener texts, "What about the provision that all non-paying guests must be 'supervised' making it impossible to have friends stay in your own rental apartment when you're gone?" Is that a thing? Does the listener have that right?

Jaclyn Jeffrey-Wilensky: I'm a little less clear on the specific rules about when you're renting out a unit in your home. Much of my reporting has been focused on the full apartment rentals that will be defacto, like no longer bookable under the new rule. I will say there are some pretty wild or surprising aspects of the multiple dwelling law, like that you can't have locks on the door because the guests and the host need to have equal access to all the space, it does seem a little impractical, even for those "legal listings."

Brian Lehrer: Anna in Brooklyn, you're on WNYC. Hi, Anna.

Anna: Hi. Thanks so much for taking my call. Yes, I have been a host on Airbnb for, oh gosh, probably seven or eight years now. I have a two-family home in Crown Heights and have a studio apartment in the lower level of my house that I've been renting out. That's been very helpful in terms of paying my mortgage, just given my work and family situation. Just want to emphasize, I think what Jaclyn said about this non-distinction in the law between these scatter-site hotels essentially and somebody like me who just owns my home.

It's been very helpful, I will say, not only for the income, but to have flexibility so that if I have family coming into town, they can stay in that space, otherwise, I can rent it out. I basically changed my listing on Airbnb to be only 30 days or more, so it'll be more of a tenant situation, which won't provide me with that flexibility, which is disappointing. The other thing I do want to say just to the point of the tourist core versus the outer boroughs issue, most of the people who stay with me, I would say, are young people, students, people visiting family, folks who I would guess don't have the money to come and stay in a hotel and spend $200, $300, $400, $500 a night.

The tax revenue that the city gets from those people who come and stay with me and so many other people like me, in terms of local restaurants, and riding the subway, and going to the Met, and doing tons of shopping, I can say from emptying people's garbage when they leave that people do a lot of shopping here-

Brian Lehrer: In-person shopping.

Anna: -[crosstalk] people come from overseas, yes, no, tons, those people are either not going to come to New York anymore, or if they come, they're going to stay for a lot shorter period of time and they're going to have a lot less disposable income to do those things. I don't know how you would measure the--

Brian Lehrer: The broader economic impact.

Anna: -loss the cities may have, but I do think it's an important piece of this that isn't really being considered or hasn't been considered in terms of the law.

Brian Lehrer: It sounds like in your case, if you couldn't use it as an Airbnb, which now you're not going to be able to, even more than you restricted before, it seems like, but if you couldn't use it as an Airbnb-type rental, you would not be renting it out full time to a tenant. Is that right?

Anna: I will be, at least in the foreseeable future, trying that. I actually did find someone through a different avenue, sites that do list more like sublet situations.

Brian Lehrer: Because ultimately you need the income more than you need the flexibility.

Anna: Exactly. We have already signed a nine-month lease starting in the fall. Airbnb does allow, you don't have to go through this whole registration process if your listing says you have a minimum of a 30-day stay. I will continue being listed there for people who are looking for-- I'm going to be in the city for four months for-- I'm in this job or whatever the situation is.

Brian Lehrer: In your situation, does it ring true to you at all when people say, "Look, the more we allow people, even like you, just an individual with one space looking for a little flexibility and a little income, even to let people like you use that space as an Airbnb-type thing takes a rental for a permanent resident of New York off the market and adds to the housing shortage making rents ridiculous"?

Anna: I do appreciate that argument. I've worked in the public sector and I understand all the reasons that the city wants to increase housing stock, but I would guess that there are probably more people who don't make the decision that I made and make it available and instead just take it off the market entirely. I don't really know for folks in my position how much you're really going to end up adding the housing stock.

Brian Lehrer: Yes. Anna, thank you for your call. We really appreciate it, and good luck to you however this turns out in your case. This is WNYC FM HD and AM New York, WNJT-FM 88.1 Trenton, WNJP 88.5 Sussex, WNJY 89.3 Netcong, and WNJO 90.3 Toms River. We are a New York and New Jersey Public Radio and live streaming @wnyc.org at eleven o'clock as we continue for another few minutes to talk about the city's further crackdown on using people's houses or apartments as Airbnbs with our data reporter, Jaclyn Jeffrey-Wilensky, who's looking at this for WNYC and Gothamist.

Jaclyn, that was a very interesting call. I guess the question is, how representative is she as a small homeowner who wants both flexibility and income, but acknowledging that it takes a rental market off the unit, how much is she representative of the larger issue?

Jaclyn Jeffrey Wilensky: I would say extremely representative based on the conversations that I've had, and even the lawsuits filed by Airbnb and the host. I was nodding along the whole time from switching the minimum stay to 30 days, which is a common tactic, to that acknowledgment that this unit would not be on the long-term rental housing market. It really echoes a lot of what I'm hearing from other hosts.

One common refrain I heard from hosts is that maybe they have relatives who live out of the country and come to stay for months at a time, and they like having that unit for them when they're there and then renting it out when it's not there. That's just another great example of something that wouldn't necessarily be a unit on the long-term market.

Brian Lehrer: Lori in Brooklyn, you're on WNYC. Hi, Lori.

Lori: Hi. I'd like to emphasize some of the similar points, but add to it, that a lot of us are older, disabled, retired, perhaps divorced, and so as a 33-year resident who has paid my taxes, and owned my home, and contributed to the city, and contributed to these city council members, I'm wondering, was it their intention that we who are trying to hang on to our tiny homes to family that we would be forced to leave New York because we can't afford our homes anymore?

We are the middle class. I supported most of these politicians and we were promised that one in two family homeowners would be excluded from this. I personally had to live in my own downstairs unit when I had serious surgeries. I housed grandmothers mostly, and I'm responsible. I guarantee you I've calculated for over 30,000, 35,000 more meals having been eaten in my neighborhood since I started hosting. I'm one of the original Airbnb hosts.

Brian, I want to say to you personally, you are so welcome to come tracing through my kitchen as a guest and you'll be treated like a king because I'm an amazing host, but I'm someone who will not be renting out that downstairs unit due to bad experiences and my own need to live in that unit or to house family when I had a long emergency. My furnishings are down there, my washing machine is down there. It's just not fair to one and two-family homeowners. I'm very angry at city council for not caring about the distinction.

One last thing, Brian, with some other hosts, I started telling Airbnb 12, 13, 14 years ago that what they were doing was wrong and publicly bringing up the issue because it's not home sharing when you allow people to flip 10, 20, 30, 50 apartments, as I saw they were doing. I'm both a fan and a severe critic of Airbnb.

Brian Lehrer: Of Airbnb, and you're really trying to draw this distinction between the developers or other businesses who are trying to flip, as you say, large numbers of units and turn them into Airbnb. I hear you, and Airbnb allowing that as part of the business model and you as a small homeowner. Lori, thank you for the generous invitation to come over, for one thing, but also, more importantly, I hear your point.

Jaclyn, are these city council members, and Lori talks about contributing to people's campaigns and now being disappointed that they're going as far as they're going, have any of them talked, to your knowledge, about maybe making a distinction between one and two-family homeowners and businesses that are flipping a lot of apartments into Airbnbs?

Jaclyn Jeffrey Wilensky: There's been some verbal acknowledgment by city council members of that distinction and it's clear that they're hearing from their constituents about this. Nothing as far as I know in terms of action or changes to the rule. What I will say is that hosts are organizing these one and two-family homeowner, hosts are organizing on Facebook in Facebook groups, in WhatsApp groups. They're organizing letter-writing campaigns, protests, press conferences, et cetera, and they are going to be making their voices heard this summer.

Brian Lehrer: Let's wrap it up on the question, just simply, what happens next? I guess they're considering and for the moment delaying this registration law, and the fact that more hosts would have to register will make it even harder to use their spaces for Airbnb-type rentals. Where are we in the actual process?

Jaclyn Jeffrey Wilensky: Sure. The registration portal is open. The Office of Special Enforcement is accepting applications. As of earlier this month, they had about 780, only 36 have been approved. That, not certain, could be related to staffing shortages at the Office of Special Enforcement that are also calling into question what this September enforcement deadline will look like. There's about a 50% vacancy rate.

Then, of course, the lawsuits are adding to the uncertainty. Will enforcement be delayed further? Will the law be altered? It's really unclear, but if things go as planned, enforcement will begin on September 5th. That's good news for hosts because summer is the hot time when all these Airbnbs are booked, but after that point, there's a lot of uncertainty, but we're going to keep following the data and see what's going on.

Brian Lehrer: Jaclyn Jeffrey-Wilensky, data reporter for WNYC and Gothamist. You can see all her Airbnb-related reporting at gothamist.com or keep listening to our morning and afternoon drive news shows and they will pop up now and again. Jaclyn, thanks for coming on.

Jaclyn Jeffrey Wilensky: Thanks.

 

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