Landlords Listing Rent-Stabilized Apartments on Airbnb Get Sued by City

Photo: PropertyShark

The heat is on in Hell’s Kitchen, NYC.  The city has filed a lawsuit in Manhattan Supreme Court against three Hell’s Kitchen building owners for operating illegal short-term rentals in rent-stabilized apartments.  If you’re walking around the Penn Station area and happen to pass the buildings at 410 and 412 West 46th Street and 452 West 36th Street, you will be passing buildings owned by some underhanded owners (Several of which are on the Public Advocate’s worse landlords list. You’ll have to read on for those juicy tidbits.)

The owners have neglected the buildings, harassed tenants to get them to move out, deregulated units and kept units vacant to rent out on a short-term basis.  One building in particular had no gas and no roof for six-months in 2015 due to a fire. Other buildings have a long list of code violations.

When city inspectors went to take a look, they found 11 of the 50 apartments that should have been used as rent-stabilized units not rentals at all -- but being used to host Airbnb. (If you ask us, it sounds like they probably didn’t get great reviews under those conditions!) Nine of the apartments were found by The Mayor’s Office of Special Enforcement (OSE), which enforces the city’s nuisance abatement law including illegal hotel activity.

Airbnb rentals are big money.  According to the suit, the apartments hosted over 700 guests–and raked in $300,000 over three years.  Rent-regulated units have been on the decline since 2011, and that’s about when the OSE began getting calls about the illegal hotel activity.  In the case of these units, only five units out of 50 are still on the books as rent-stabilized according to DHCR records.

The city is looking to show that this crime doesn’t pay and is seeking over $1 million in punitive damages.  There is a movement to stop the short-term rental of apartments for less than 30 days at a time.   Mayor Bill de Blasio has been fightingagainst building owners who defy the state’s short-term rental law.

The buildings have an impressive 100 violations for illegal transient occupancy and 250 outstanding violations for hazardous conditions from the New York City Department of Housing Preservation and Development. All three buildings have been deemed unsafe, which is also tenant harassment. 

A spokesman for the mayor’s office said, “Short-term illegal rental platforms like Airbnb make it all too easy for landlords to harass and displace rent stabilized tenants. We will continue to use our enforcement tools to hold these landlords accountable as part of large effort to preserve and protect affordable housing.”
 This is a story that will probably keep unfolding as more buildings and apartments with illegal Airbnb rentals come to light. We will keep you posted, as always!