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Airbnb home-leasing business faces scrutiny in New York

October 07, 2013|By Stuart Pfeifer
  • Hope Arnold said she uses the Airbnb website to rent the bedroom of her home in the Silverlake neighborhood of Los Angeles. She said she uses the income to help pay her bills.
Hope Arnold said she uses the Airbnb website to rent the bedroom of her home… (Anne Cusack / Los Angeles…)

Airbnb Inc., the short-term home rental service for travelers, has been issued a subpoena from New York prosecutors.

State Attorney General Eric Schneiderman’s office is investigating whether people who put units on the Airbnb website are complying with state rental laws, Bloomberg News reported, citing an unidentified person familiar with the matter.

Airbnb, which has become increasingly popular in Southern California, allows people to rent homes and apartments on a short-term basis as an alternative to hotels. A 2010 New York law bars renters from subletting apartments for fewer than 30 days with some exceptions.

The trend has also been criticized in Silver Lake, where homeowners have complained that Airbnb hosts are running virtual hotels, packing homes with throngs of visitors whose presence alters the community feel.

"They're popping up everywhere," said Scott Plante, a Silver Lake neighborhood councilman. "They're all over Silver Lake, and it's the volume of these things. There has to be some sort of balance."

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Airbnb rentals violate Los Angeles zoning laws, which prohibit rentals shorter than 30 days, except for licensed hotels and bed-and-breakfasts, Silver Lake council member Anne-Marie Johnson said.

In New York, Schneiderman’s office is targeting people who are renting large numbers of units or are leasing their properties for much of the year, Bloomberg News said. Casual hosts who occasionally rent personal apartments they own or lease aren’t a target of the probe.

Matt Mittenthal, a spokesman for Schneiderman, declined to comment.

New York City has been a legal battleground for Airbnb. Last month, the company helped a tenant who sublet his apartment through the service overturn a $2,400 fine levied by the city.

Democratic state Sen. Liz Krueger, the author of the state’s illegal-hotel law, has called Airbnb’s business model “unambiguously illegal” in the city.

In a blog post Sunday, Airbnb’s head of global policy, David Hantman, said the company wants “to work with governments to make the Airbnb community stronger.”

The demand from the attorney general’s office, seeking data on 15,000 New York Airbnb hosts, is “unreasonably broad and we will fight it with everything we’ve got,” he wrote.

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