Sharing Is Hard: Airbnb Is Awesome But Often Illegal in New York City
We know that the sharing economy is exciting and complicated, but it's easy to overlook the extent to which it's complicated. Skift's Jason Clampet reports that many of Airbnb's New York listings are illegal. Maybe half of them.
If a listing offers an entire apartment in a Class A dwelling—which represent all but a few dwellings in the city—for less than 30 days and the host is not present during the rental, it’s illegal. If the listing is for a room or a space in a dwelling and the host will be present, it’s legal. Also legal under the law are traditional B&Bs, couch surfing, and home swaps as long as money doesn’t change hands.
That's according to a law that clarified existing law (which probably didn't anticipate the huge upswing in vacation rentals), passed in May of 2011. I've looked at a lot of Airbnb listings in New York and stayed in two. I don't remember seeing any kind of warning about this—likely because I didn't do a close enough read of the terms of service. Neither did this guy, who got a good, old-fashioned $40,000 scare after not carefully reading the terms of service and then going on to illegally rent out his (rented) space.
Given that the company knows good and well that many of the hosts on its site who live in big cities are violating the rules, he said, why not warn people more explicitly about the kind of trouble they could find themselves in? “By ignoring local laws, you are making casualties of the very people you need to make your site a success.”
But it feels like it doesn't matter—like the proliferation of Airbnb clones and other the-Airbnb-of-x startups is inevitable and maybe in a decade or so we'll have sorted out the stickiest of the legal issues.
In the meantime, it does feel like history is repeating a little. When all those filesharing apps were first out and it wasn't obvious (for whatever reason) to people that they were breaking the law and could be punished for it, it was a shock when they got nailed for it and had to cough up huge fines.
And it's true that some users in both cases were and are breaking the law and had every opportunity to educate themselves about that. And that Napster was then and Airbnb are now disincentivized to do more to educate users than was or is legally necessary to cover their own behinds. Basically: Sharer beware! Those terms of service really do mean something.