Question from Alison Frank, Washington, D.C.
A: The boom in short-term apartment rentals, fueled by companies such as Airbnb, FlipKey, and HomeAway, has made rooms everywhere from Paris to Portland available online. That’s great for travelers looking for affordable hotel alternatives. But the rapid growth of this aspect of the new “sharing economy” has outpaced the law in certain cities—leaving some hosts (if not their guests) in decidedly murky legal terrain.
The fact is, it’s nearly impossible for a traveler to tell which apartments are—and are not—listed legally. The rules governing short-term apartment rentals vary city by city and can be incredibly complex. In 2010 the New York State Legislature passed a law enforcing a ban on more or less all rentals for fewer than 30 days in buildings with three or more units, unless the tenant is present throughout the stay. The law was intended to prevent large-scale commercial operations—i.e., illegal hotels—but is broad enough to encompass the activities of more casual renters. In San Francisco, meanwhile, decades-old city codes prohibit renting any apartment or house for fewer than 30 days, according to Amy Chan, a legislative aide to David Chiu, president of the city’s Board of Supervisors. Outside the United States, cities have their own restrictions. Paris, for example, curbs short-term rentals of properties that aren’t used as primary residences.
Many of these laws are based on worries that the proliferation of short-term rentals could erode affordable housing stock in city centers. In some places, such as Barcelona, it’s the hotel industry that is pushing back, seeing these apartments as unregulated and untaxed competition. There are also a significant number of people who simply don’t like the thought of strangers in their buildings or neighborhoods. Robert Braverman, partner of the New York City law firm Braverman Greenspun, represents co-ops and condo boards. He says that many of the investors snapping up luxury condos in Manhattan and Brooklyn see Airbnb as a business opportunity, “but other condominium residents aren’t wild about a constant influx of people coming into the building.”
That said, cities across the globe are working to accommodate these types of apartment stays. Tim Doyle, spokesperson for the Short Term Rental Advocacy Center (STRAC), a nonprofit created by Airbnb, HomeAway, TripAdvisor, and FlipKey, cites Atlantic City, New Jersey; Austin, Texas; and California’s Palm Desert as examples. In 2012, Palm Desert passed an ordinance mandating hosts to get an annual rental permit and collect a 9 percent transient occupancy tax. Austin, for its part, now requires licenses, collects taxes, and has imposed caps on the percentage of housing stock that can be used for such rentals. San Francisco and New York State, which have among the most stringent laws domestically, are both considering new legislation to allow for some short-term rentals—with restrictions. San Francisco may have a new law in place as early as next year. Overseas, Amsterdam, London, and Hamburg, Germany are all starting to embrace the model of short-term rentals, according to David Hantman, head of global public policy for Airbnb.
It’s worth noting that, even where short-term rentals are prohibited, the liability rests with the person who is putting the apartment up for rent—not the guest. Worst-case scenario: you may be asked to leave the apartment prematurely. Carl Shepherd, cofounder of HomeAway, says, “Travelers should feel confident that they can rent a vacation property without any legal implications on themselves.”
In addition, infractions are rarely prosecuted. Both San Francisco and New York City rely on complaint-based enforcement systems. In other words, someone has to tattle to city investigators (which is happening with more regularity in New York, Braverman warns). But fines are still rare. “Out of all the people coming to New York City each year with Airbnb, we only know of one person who was fined,” Hantman says. Chan points out that San Francisco usually issues a warning first, under the assumption that the host is unaware of the laws.
In the meantime, Shepherd has some common sense for potential renters: don’t do anything you don’t feel comfortable with. If someone asks you to pretend you’re a relative or avoid speaking to doormen, take that as a warning sign that the listing isn’t on the up-and-up. The STRAC website also offers an overview of the regulations in many U.S. cities. It’s worth looking into—especially if you are planning to rent out your city apartment. After all, these sites will help you list your place, but you’re more or less on your own if you violate any laws.
23k: The number of New York City apartments available for rent on Airbnb.