Report Says 72 Percent of Airbnb’s New York Rentals Are Illegal

New York State Attorney General Eric Schneiderman speaks at a news conference in his in New York offices, Tuesday, Nov. 19, 2013. Richard Drew / AP

A whopping 72% of Airbnb’s listings in New York are illegal, according to a new state report, and together with city regulators, the office of New York Attorney General Eric Schneiderman is actively cracking down on the room-rental service.

Covering four years of data provided to the attorney general after a court battle, the report indicates that more than a third of the listings posted on the online marketplace are run by large-scale operators, not permanent residents, and generate more than a third of the revenue. In New York City, laws are in place to prevent people from renting out their residences for less than 30 days, unless the tenants are also home. Schneiderman is looking to shut down these operations, which are essentially run like hotels.

The findings run counter to Airbnb’s previous claims on how people use its service. It prefers to paint its marketplace as a way for individuals to “share” available rooms with others. In September, it proudly announced that 87 percent of Airbnb hosts in New York actually share the home in which they live. But this hardly tells the whole story.

According to the New York report, six percent of Airbnb hosts made 37 percent of the revenue in New York City, amounting to $168 million. Within this pool, hosts posted three to 272 units on the home rental service. The person who had listed 272 units has made as much as $6.8 million in revenue.

Airbnb has not publicly denied the figures. But last week, in San Francisco, the company wholeheartedly embraced new regulations that were put into place to address the risk of hosts renting out properties as if they were full-time hotels. Now, at least officially, only permanent San Francisco residents can offer their homes for rent, entire homes can only be rented out for a maximum of 90 days per year, hotel tax is collected, and each rental must carry $500,000 in liability insurance.

Yes, New York’s report makes Airbnb look rather disingenuous. But it also shows that all cities need regulations along the lines of those in San Francisco. Room sharing is one thing. A hotel business is another. What needed is a way of distinguishing between the two.