Regulators Attack Popular Home-Sharing Startup, Alleging Housing Violations

Published October 23, 2014

Airbnb, a web-based startup company connecting private individuals with travelers, has become popular among travelers of all ages who are seeking to meet new people, in cities across the world. Fans of the online service say that Airbnb provides rooms that are remarkably less expensive, and far more interesting, to consumers than traditional hotels. 

By connecting homeowners with unused space in their homes with tourists seeking a place to stay for the night, Airbnb’s market valuation has grown to over 10 billion dollars, featuring housing listings in 192 countries.

However, this month, New York attorney general Eric T. Schneiderman claimed that “nearly three-quarters” of the rooms rented through Airbnb were “illegal” violations of city zoning laws and safety codes prohibiting the operation of hostels, or companies avoiding city tax regulations. According to the Times, Schneiderman claimed that “commercial operators, not local residents, supply more than a third of the units, and generate more than a third of the revenue.”

Nick Papas, spokesperson for the company, told reporters that “every single home, apartment, co-op, and living space in New York is subject to a myriad of rules, so it’s impossible to make this kind of blanket statement.”

Some say that New York Airbnb operators are being targeted because they’re successful, and are partially supplanting the state’s politically powerful hotel industry. According to campaign finance reports studied by the New York Public Interest Research Group, a left-wing political organization, Schneiderman has received nearly $200,000 in campaign donations from corporate donors in the hospitality and tourism sector.

In addition, major donations occurring before the launch of the Airbnb investigation include a $10,000 donation from the Hotel and Motel Trades Council.

John Cahill, who is running against Schneiderman this fall, criticized the seeming convergence of lobbyist campaign donations and official state investigations, saying in an October press conference that “there are issues with all new emerging technologies. We need to have an attorney general in the state of New York who has to understand that we need to develop new emerging technologies in the state.

At the press conference, Cahill continued, saying “whether it’s Airbnb, whether it’s Uber, whether it’s Lyft, whether it’s hydrofracking, we need to be more proactive in working with those industries, as opposed to doing subpoena dumps.” 

Dotty Young ([email protected]) writes from Ashland, Ohio.