Memorandum in Support of Intro No. 981 Regulation of Short-Term Residential Rentals

INTRO NO: 981

SUBJECT: A Local Law to amend the administrative code of the city of New York, in relation to the regulation of short-term residential rentals

SPONSORS: Rivera , Cumbo, Rosenthal, Johnson, Adams, Ampry-Samuel , Ayala , Brannan, Chin, Cohen, Constantinides, Deutsch, Diaz, Sr., Dromm , Espinal, Jr., Eugene, Gjonaj, Grodenchik, Kallos, King, Koslowitz, Lancman, Lander, Levine, Maisel, Menchaca, Moya, Powers , Reynoso, Richards, Rodriguez, Rose, Salamanca, Jr., Torres, Treyger, Williams, Cabrera , Van Bramer, Holden, Koo

The Real Estate Board of New York (REBNY), the City’s leading real estate trade association, representing commercial, residential, and institutional property owners, builders, managers and brokers is pleased to submit comments on the proposed legislation.

This bill requires that any listing platform accepting fees in relation to booking services allowing for the rental of a housing accommodation to report on the address of the unit and the name of the person renting the unit to the City on a monthly basis or be subject to fines ranging from $5,000-$25,000.

REBNY commends the Council’s efforts to address the growing problem of illegal short-term rentals by regulating listing platforms. Recently, the City’s Comptroller’s office published a report confirming the practice contributes to our City’s growing housing affordability crisis by driving up neighborhood rents and by removing housing units from the market.[1] These are important statistics that could allow the City to continue to study the effects of short-term rental activity upon our housing market.  

As you know, short-term rental activity (rentals for less than 30 days) in Class A multiple dwellings (buildings with three or more units) without the host present for the duration of the stay was banned in New York State in 2010. REBNY’s members have diligently tried to stymie this growing practice by combing through listing platforms in order to identify their buildings and to enforce the law, but have been hindered from doing so because rental platforms are not required to disclose the addresses of units being rented. Illegal short-term rentals create a number of safety and fire code issues due to the transient nature the practice promotes within residential buildings. In fact, our members have received costly fines for building and fire code violations resulting from illegal short-term rental activity often occurring without their knowledge, after they have taken proactive measures to prohibit the illegal activity within their buildings, or, after expeditious attempts to correct these violations after being notified of such activities.

While this legislation is a great first step, REBNY recommends this bill be amended to allow owners to be notified when their building is posted on a listing platform to allow for greater transparency. Doing so will ensure this legislation does not disempower owners from enforcing the law within their own buildings while allowing the City greater efficiencies in identifying those (whether owners or residents) who are breaking the law. Additionally, the City should provide regular notification to owners and should grant owners adequate time to address the problem before receiving fines.  

There are several other ways the bill could be improved to ensure its success, which are listed below:

Rebuttable presumption. REBNY recommends the City allow for the creation of a rebuttable presumption allowing violations incurred by the owner to be waived provided s/he demonstrates meeting certain good faith efforts to curb or prohibit illegal short-term rentals. These efforts could be defined as including lease terms or riders prohibiting illegal short-term rentals, providing notice to the residents of the law and their intent to enforce the law, and/or seeking injunctive relief from housing court. Providing such a mechanism allows owners who are aware of these activities to report violations to the City without fear of incurring fines themselves for illegal short-term rental violations by residents. Furthermore, the City should seek to penalize the party responsible for any violations associated with illegal short-term rental activity by passing on those fines. If a tenant is found to be the offending party, s/he should not only be subject to all penalties, but s/he should also be precluded from the rebuttable presumption of landlord harassment for a period of time.

Opt-out provision. REBNY recommends the City require listing platforms to allow building owners to “opt out” of their services and prohibit residents from listing units in those buildings.  Listing platforms with this information should be required to remove any units provided by these self-reported buildings and should face penalties for noncompliance.

REBNY is happy the Council has taken such an important step in protecting our affordable housing stock and we look forward to working with the Council to further strengthen this legislation.

For the abovementioned reasons, REBNY SUPPORTS INTRO No. 981.

[1] “The Impact of Airbnb on NYC Rents.” Office of the New York City Comptroller. May 3, 2018. Accessed June 25, 2018.