New York City Reverses Fines for Man Who Used Airbnb “Illegally”

Nigel Warren was fined $2,400 for renting out his apartment on Airbnb for three nights. But last week, the New York City Environmental Control Board reversed his fines, setting an important precedent for short term rentals in the Empire State.

Originally, Nigel faced $30,000 in fines for “operating an illegal hotel.” As the Institute for Justice previously reported,

Thanks to a 2011 state law, a residential multiple dwelling must be occupied by the same person or family for 30 or more consecutive days. So renting out one’s own property for less than a month is actually illegal…officials in New York City issued almost 2,000 violations for short term rentals in 2011.

Nigel and Airbnb appealed the fines, arguing that since Nigel’s roommate was in the apartment while the place was rented out on Airbnb, he didn’t violate New York’s rental laws. The board agreed. Airbnb praised the decision, calling it a “huge victory…the sharing economy is here to stay, and so are we.

However, this ruling won’t apply to New Yorkers who rent out their homes when none of the renters or owners are there. This law needlessly limits consumer choice, while protecting hotels from more competition (the Hotel Association of New York City has been one of the staunchest opponents of reform). The state legislature should build on this partial win and reform its protectionist rental laws.

Sites like Airbnb can be incredibly beneficial. By lowering the cost of visiting a city, short-term rentals can both attract more tourists and help property owners earn extra income. Economic impact surveys have found that Airbnb contributed $56 million in San Francisco, $240 million in Paris, and $1 billion in New York State. As IJ has pointed out, no wonder 84% of Americans wants to legalize short-term rentals.

-- Nick Sibilla

Nick Sibilla is a writer at the Institute for Justice


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