City Council, Airbnb executives spar during contentious hearing

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Helen Rosenthal, center, joins opponents of Airbnb at a rally outside City Hall in January. (AP Photo/Bebeto Matthews)
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For more than an hour on Friday, members of the City Council and a top executive from Airbnb sparred during a hearing about proposed regulations and fines the Council wants to impose on the short-term rental company — one the members insist is cutting into the city’s stock of rent-regulated apartments.

But after the contentious hearing, in which several Council members shouted at executive Chris Lehane and occasionally left the room in a huff, the two sides agreed to try to make peace.

Lehane, head of global policy for Airbnb, and Councilwoman Helen Rosenthal, spoke briefly and decided to talk in person by Thanksgiving. Lehane said either he or another company executive would meet with Rosenthal, who has emerged as one of the top Airbnb critics in the left-leaning legislative body, to discuss the data she is seeking.

None of that data, including how often specific apartments are rented out for a short time, was presented at the hearing. Lehane said much of it is available online; Rosenthal insisted it is not.

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The crux of anger directed at the company from Rosenthal and Councilman Jumaane Williams, who chaired the committee hearing, comes from their belief Airbnb does not regulate its hosts who use the service illegally.

A law passed in 2010 makes it illegal for hosts to rent out an apartment for fewer than 30 days unless that host is present. The law doesn't apply to owners of single- and two-family homes.

Airbnb is calling for “fair rules for home sharing" and wants the law to be altered so it allows people to rent out the homes in which they live. Airbnb has also said the law was written to address illegal hotels and not homeowners renting their dwellings.

Many of those apartments are rent-regulated by the city and state and by renting them out to tourists, Airbnb is limiting New Yorkers’ housing options, Rosenthal and Williams argue.

A bill sponsored by Rosenthal, a Democrat who represents the Upper West Side, would increase the penalty for violating the law from the existing range of $1,600 to $25,000 to between $10,000 and $50,000.

Another piece of legislation, sponsored by Councilman Ydanis Rodriguez, would require the city buildings department to submit an annual report to the Council on illegal conversions in apartments. A third proposal, sponsored by Councilman Mark Levine, would remind tenants they don't have to pay rent if their landlords are violating the law.

Williams, who grew visibly angry several times during the hearing and raised his voice, told Airbnb he would make sure the city enforces the law since, he says, the company is unwilling.

“You know that a large percent of your revenue comes from people who are doing this illegally, the people we are trying to go after,” Williams told Lehane. “We are going to as hard as we can to make sure it stops … whether you help us or not.”

In one of the more dramatic exchanges, he called Airbnb “a deceiver.”

“You use middle-class people and you use black and Latino people,” Williams said. “Your deception is what’s causing the middle-class to suffer even more because you’re taking housing off of the market. You’re making no friends in the City Council. You should be ashamed.”

Council members took issue with Airbnb bringing to testify on its behalf a Staten Island woman who is not in violation of the law.

"I support your renting out on Airbnb. … Keep renting out on Airbnb. Airbnb is the place for you so thank you for doing that,” an exasperated Rosenthal told the woman at one point. "Keep doing that. You are a good New Yorker."

Rosenthal’s later said her concern is the impact the illegal use of Airbnb has on her constituents.

"I care about the other tenants who live at 790 11th Ave., who have complete strangers roving up and down their hallway, who have music going all hours of the night, who just want to get a good night sleep because you know what? They are solid, middle-class constituents of mine,” she said, referring to a building in her district.

Lehane repeatedly told the Council he wants to work with members and reminded them Airbnb is not a regulator agency.

Lehane stayed calm during the hearing and later shrugged it off.

“New York is Broadway and New York’s politics play at the Broadway level,” he said after the hearing. “It’s why it’s fun, it’s why it’s interesting, it’s why it’s entertaining. At the end of the day, hopefully we can move beyond the theater of all this and actually get to the real people who are impacted by this.”

He came armed with an Airbnb analysis that found 7,800 households would be rent-burdened and nearly 22,000 families would be in danger of going bankrupt if they are fined $50,000. (Rent burdened means spending more than 30 percent of income on either rent or mortgage.)

Airbnb’s logic is that without this supplemental income from these short-term rentals, they would have less money to pay their bills.

“It is a dagger into the heart of the middle-class here in New York,” Lehane later said of the proposed fines.

The administration, for its part, gave a lukewarm endorsement to the Council’s proposals while officials struggled to answer several questions about what the city is doing to regulate Airbnb. 

Christian Klossner, executive director of the Office of Special Enforcement, which is overseen by the Mayor’s Office of Criminal Justice, was brought on to crack down on illegal hotels. He said the city has received 681 complaints about illegal hotels since January, conducted 1,192 inspections and issued 1,325 violations. 

Klossner said the administration “agrees with the spirit” of the proposed legislation but voiced some concern about Rosenthal’s bill to significantly raise fines for law-breakers. 

“[We] support the overarching goal of reexamining the current civil penalty structure so that it effectively deters the most egregious violators,” Klossner said. “OSE is also in favor of maintaining a civil penalty structure that acknowledges that the universe of violators is not the same, and therefore the range of civil penalties for less egregious violators should reflect that reality.”