America TonightMon-Fri 9:30pm ET/6:30pm PT
NEW YORK – Actress Susan Barrett says a parade of strangers comes in and out of her building in New York City, renting apartments for a few days at a time.
Sometimes they’re rude, sometimes scary. Occasionally, she says, the scene is surreal – like the time a group of visiting Chinese men left an apartment door open as they cooked in their underwear.
“Hell’s Kitchen was once a real neighborhood,” Barrett said. “It’s changed. Now, there are people with suitcases staring at me. It’s just so wrong.”
John Reeds, who lives four blocks away, says apartments in his building are also now available for short-term rentals.
“It’s just a lot of people we don’t know coming, going, with those rolling suitcases,” said Reeds, who works for a law firm. “It makes me nervous.”
State Sen. Liz Krueger says Airbnb and other websites connecting renters and “hosts” are changing the fabric of the city, posing a safety risk to residents and exacerbating an already acute shortage of reasonably priced apartments.
“Every time another affordable apartment leaves the market, that adds to the problems of everybody else who’s trying to afford living in the city of New York, right?” she said. “And it’s a shrinking world right now.”
The website Inside Airbnb, which scrapes the data from Airbnb listings, found more than 13,000 apartments and homes available year-round, meaning they are no longer available as housing for New Yorkers.
Under city law, it’s illegal to rent out your apartment for fewer than 30 days unless you are living there too. The state attorney general’s office released a report last year that found 72 percent of Airbnb rentals in the city were illegal.
“We need much stronger enforcement in this city to stop the illegal activity from happening. I think we need increased fines,” Krueger said. “If you are renting out apartments that are supposed to be available for residents of the city of New York as your business model, sorry, find a legal business. Most of us have to find legal ways to make an income.”
Airbnb facilitated the first New York City rental in 2008 and has experienced explosive growth ever since. The Attorney General report found short-term bookings on Airbnb increased tenfold from January 1, 2010 to June 2, 2014.
David Hantman, head of public policy at Airbnb, says the demand is fueled by travelers who want to experience the city as if they were locals.
“When you come with Airbnb, you can stay in Queens and Brooklyn and Harlem and everywhere else in New York, and we’ve seen a big demand for that,” says Hantman, “a big demand for experiencing New York like New Yorkers do.”
“America Tonight” recently rented a Hell’s Kitchen apartment through Airbnb. The apartment was one of five listed by the same host and looked very much like a hotel room, with no sign anyone actually lived there.
“America Tonight” paid $229 for the apartment, plus a $65 cleaning fee. There was a $35 service fee to Airbnb, which also collected a $9 fee from the host. Operating in more than 34,000 cities, Airbnb's market capitalization was estimated at $10 billion in April 2014, more than Hyatt Hotels Corp. The company is held up as a paragon of the new “sharing economy.”
N.Y. State Sen. Liz Krueger
“There are a lot of losers in this sharing model,” Krueger said. “I think it's a marketing gimmick by some corporations who have figured out how to make a whole lot of money off of exploiting other people.”
Hantman says he supports the city cracking down on people with multiple listings, but Airbnb’s focus is on the people who are sharing their homes.
Filmmaker Joshua Greenberg and his wife, Karen Wight-Greenberg, an actor, dresser and makeup artist on Broadway, rent out a room in their Brooklyn apartment on and off throughout the year. Because they remain in the home, their short-term rentals are legal under New York laws.
“It’s our solution to affordable housing,” said Wight-Greenberg, with a laugh. “It gives us that extra kind of cushion not to be super stressed when one our jobs ends before the next one begins.”
Wight-Greenberg says she also enjoys the cultural aspect of hosting visitors, many of them from other countries.
“With two small kids, we're not able to travel as much as I would love to, and it's an opportunity to kind of bring other cultures and just wonderful people from all over the world into our home,” she said.
There’s no sign Airbnb’s rapid growth will slow anytime soon. In an effort to compromise, Airbnb has offered to pay New York City hotel taxes, estimated by the company at $21 million. But Krueger says she is not interested in making a deal.
“I’m protecting the public who lives in the city of New York, so I don’t see it’s a negotiation,” Krueger said.
Hantman says in most cities and governments around the world, they are listening and seeing what's happening with Airbnb.
“They realize the sharing economy, companies like Airbnb…are really helping their citizens make ends meet, experience new things,” Hantman said. “And they’re embracing those things and trying to figure out where to do draw smart lines. And in New York so far, there hasn’t been a smart line drawn. That’s the thing we need to work on.”
With no deal in sight, Reeds says he's nervous watching the apparent short-term renters come and go in his building. He says he worries his landlords will pressure him to leave.
“I feel that my landlords would prefer that I was gone," he said, "and they were able to make a lot of money on this apartment."
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