bummer rental

Small Homeowners Pay Big Fines for Short-Term Airbnb-style Rentals

Illustration: Kazi Awal / Shutterstock

When three burly building inspectors knocked on the door of her two-family Brooklyn home on Aug. 2, 2017, Dian Killian welcomed them in.

She had thoroughly researched the legality of renting out her 650-square-foot garden unit in Bedford-Stuyvesant through Airbnb, she says, and had nothing to hide. State laws prohibiting rentals of less than 30 days do not apply to one- and two-family homes.

Within minutes, however, the tone of the men Killian now calls the “DOB police” shifted, and she found herself being grilled over a lack of sprinklers and the kind of manual fire-alarm system normally reserved for commercial establishments.

“I had some guests staying from Germany,” said Killian, 55. “[The inspectors] wanted to see their passports. They asked how many days they were staying. They were acting like they were ICE.”

Killian was hit with four buildings violations by the Mayor’s Office of Special Enforcement — including a lack-of-egress ticket that was later dismissed — and eventually paid more than $5,000 in fines, penalties and fees. She said that sum amounted to about three months’ worth of rentals.

While she shifted her Airbnb listing to less lucrative, longer-term rentals, Killian says she’s hurting from the loss of income.

“The whole thing’s gotten distorted,” said Killian, who works as a life coach and musician. “I know some people have abused it…but the whole picture is there’s many, many people like me in the city of New York, and the only reason we’ve been able to stay in the city is because of Airbnb.”

Killian isn’t alone among small homeowners caught up by City Hall’s aggressive enforcement of short-term rentals, data obtained by THE CITY shows.

Bed-Stuy resident Dian Killian said she was fined by the city for renting out her downstairs unit on Airbnb.
Bed-Stuy resident Dian Killian said she was fined by the city for renting out her downstairs unit on Airbnb. Photo: Yoav Gonen/THE CITY

Owners of one- and two-family homes in Brooklyn have been hit with more than $2.1 million in fines related to short-term rentals under the de Blasio administration — comprising 27% of the total $7.8 million in fines issued in the borough during that period.

Queens homeowners paid an even larger share of the $4.3 million in short-term rental penalties levied in that borough: 39% of the total, or $1.7 million.

And while the overall fines were much lower in The Bronx and Staten Island, small homeowners were slapped with 53.6% and 56.2% of the total in each borough, respectively, amassing $400,000 in fines.

In Manhattan, where one- and two-family homes are scarce are scarce, they made up less than 1% of the $16.2 million in fines issued for illegal rentals since 2014.

Public Advocate Cites Unintended Consequences

Newly elected Public Advocate Jumaane Williams said the high proportion of fines hitting small homeowners contradicts the message put out repeatedly by administration and elected officials that enforcement would largely target the most egregious offenders.

In July 2018, Council Speaker Corey Johnson said city inspectors “are really trying to go after the really bad actors that have entire buildings or multiple apartments in a building.” And in February, after issuing a subpoena to Airbnb, Mayor Bill de Blasio told NY1 that “my problem is when a building is turned into a de facto hotel. My problem is when an apartment is rented out effectively year round.”

Both officials have sought tighter regulation of the home-sharing sector — at a time when the city is welcoming a record number of tourists, 65.2 million in 2018 — while getting significant financial backing from hotel worker unions.

“We were clear our intent is not to go after one- and two-family homeowners,” Williams, the Council’s former Housing Committee chair, told THE CITY. “We thought we had a partnership with the city. But the administration looks like they’ve opened up a can of wild, wild west whoop-ass on them.”

He noted that when Manhattan enforcement is excluded from the count, small homeowners make up one-third of the fines levied.

Williams also pointed to widespread confusion over the legality of short-term rentals in one- and two-family homes because of differences between city and state law.

Even though small homeowners aren’t covered by the state laws barring short-term rentals or advertising them, the city has been going after them based on violations of the administrative, buildings and housing codes — including fire safety codes normally reserved for hotels.

“Because of that confusion, government has lied to these homeowners — to the tune of millions of dollars. And I’m very upset. And the administration should be ashamed of themselves,” said Williams. “The mayor needs to do something about it right now. He should come back from wherever he is and fix this.”

City Hall Makes a Safety Argument

City officials say their enforcement is complaint-driven, and pointed to a number of cases where one- and two-family homes had been turned into de facto boarding houses or where Airbnb had struggled to self-police violations of the rules. They argued that the fines in the outer boroughs were proportionate to the share of one- and two-family homes outside of Manhattan.

Opponents of Airbnb and other short-term rentals – including the powerful Hotel Trades Council of unions – contend the practice threatens the safety and quality of life of tenants in multiple-unit buildings, and reduces the city’s already limited affordable housing stock.

“Illegal short-term rentals are proliferating at alarming rates throughout the city in buildings of every size,” said Christian Klossner, director of the Office of Special Enforcement. “Each home is critical to preserving affordability, and every neighborhood deserves to have its housing protected.”

City codes include occupancy restrictions that collectively prohibit renting out an entire home or apartment for fewer than 30 days, require the owner to be present during short-term stays and set a limit of two paying guests.

Homeowner hosts using short term rental apps have been fined by the city — they say unjustly.
Homeowner hosts using short term rental apps have been fined by the city — they say unjustly. Photo: Ben Fractenberg/THE CITY

But Manhattan lawyer Kent Gubrud, who has been involved in multiple lawsuits against the city’s enforcement of short-term rentals, maintains that the codes being cited are confusing even to attorneys. And he says the invocation of hotel fire codes to levy hefty fines on homeowners — which occurs only after officials identify “transient occupancy” — is a like a game of make-believe.

“The best analogy I can say is that the city came up with a story that if you ride a bicycle on the street, then it’s an illegal car — and now you have to have safety belts, headlights and air bags, or they can fine you,” said Gubrud. “This is what they’re doing — but there’s nothing that says this anywhere. It’s something they dreamed up. It makes no sense. And it’s not supported by the law.”

The Office of Special Enforcement was launched by Mayor Michael Bloomberg in 2006, as an outfit charged with coordinating multi-agency raids of illicit nightclubs, counterfeiting operations and illegal hotels.

It had a staff of 12 for nearly a decade, before de Blasio significantly upped its funding. The office now supports 67 positions with a budget of $8 million.

Yet even officials tied to that office haven’t help cut through the confusion over which rentals are legal. In January 2015, Alex Crohn, a lawyer with the Mayor’s Office of Criminal Justice, testified at a public hearing that one- and two-family homes “are exempt from the [state] multiple dwelling law, so…violations should not be issued.”

Since then, Office of Special Enforcement director Christian Klossner has sought to correct that notion by emphasizing that the city’s housing and building maintenance codes are being strictly enforced.

Last week, City Hall officials told THE CITY that they’re launching a public education campaign this spring to help clarify the issue once and for all — as well as to notify people of how to report suspected illegal rentals.

Reps for Airbnb pointed to previous statements they’ve released decrying the city’s aggressive stance toward “responsible homeowners” but declined further comment.

Do you rent out an Airbnb-style room or home? Has the city (not us) visited you to inspect your room or home for rent? Were you fined? We’d like to talk to you. Email TellUs@thecity.nyc or text/WhatsApp to 718-866-8674.

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