Hank Freid, the landlord at 258 West 97th Street had recently been handed 15 violations for allowing for short term rentals in the apartment complex on the Upper West side. The city is said to have fined Freid $1,000 for each violation. Fried essentially converted the building into an Airbnbesque hotel by advertising the units on Expedia and Kayak. Visitors were charged between $400 and $800 a stay.
Melissa Grace, spokeswoman for Mayor Bill de Blasio issued the following statement regarding the incident: “We will use all enforcement tools to protect affordable housing and New Yorkers and visitors alike. Turning apartment buildings into illegal hotels, damaging neighborhoods and will not be tolerated.”
In addition to the fines, Freid also received a number of Department of Building violations, including one for converting a “permanent dwelling to transient use.” according to the Real Deal, which initially reported this story.
Ronald Rosenberg, Freid’s attorney noted that the city was unjustly targeting real estate moguls and landlords like Freid whilst all but ignoring comparable offenses being perpetrated by companies like Airbnb, that is now monopolizing the underground transient dwelling industry and at the same time driving up the cost of New York real estate. ‘Now they are going after the little guys.” said Rosenberg. “The real estate industry has to stay together to fight this tyranny.”
This past October, Governor Andrew Cuomo signed the legislation into law that imposed fines ranging from $1,000 to $7,500 for posting short-term rentals that were less than 30 days in duration and creating a contract with residents that were not physically present.
While the law was designed with the aim of cutting down on Airbnb listings, it is proving far more difficult to target the brand as its activities are not aimed at a targeted area but are widely dispersed throughout the city. Airbnb is also rarely held to account because it does not directly own any lodgings. Contracts are made between hosts and renters from all over the world. It is much easier to target local landlords than it is to hunt hosts that participate in the apps short-term rental arrangements. The law is designed to discourage lodgers from advertising with the app.
The company received its profits inadvertent manner that allows it to avoid accountability from breaking local law.
The app receives a percentage of the commission and service fees every time it books a stay. It has approximately $3,000 lodgings listed in 65,000 cities and 191 countries. The cost of the lodging is set by the host and not the company. Airbnb is notoriously renowned within the industry for skirting the law for this very reason. It has said in the past that it is not accountable for what the lodgers and renters do as it merely acts as a middleman between the two.
Landlords and brokers must bear the consequences for advertising short term. Earlier this year Fried was fined along with broker Tatiana Cames for posting ads for short term rentals at the Marrakesh hotel on various travel sites including Airbnb. Cames was said to have advertised the same spaces as “for rent” on her website as a front for the illegal postings.
By: Ethel Morgenstern