Airbnb Operator Sued by New York City in Fight Over Short-Term Rentals - The New York Times

A building near the East River in Manhattan was the site of one of the biggest illegal rental operations in the city in the past year, a lawsuit said.

The five-story building near the East River in Manhattan was supposed to house eight residential apartments on top of a doctor’s office, according to city records.

But city inspectors in recent years noticed people carrying suitcases in and out of the building. On one occasion, five guests told inspectors they were visiting from Italy. They said they had booked a six-day stay for more than $3,000.

In a lawsuit filed in Manhattan State Supreme Court on Tuesday, New York City officials asserted that the building was in fact one of the biggest illegal hotel operations housing visitors in the past year.

The lawsuit was the first filed by the city targeting a short-term rental scheme identified through a new law that requires services like Airbnb to regularly report some information on hosts and transactions.

And it was the latest in a yearslong attempt by the city to stamp out illegal short-term rentals, which officials in many American cities say exacerbate the housing shortage by catering to tourists over residents.

New York State law largely bars apartment rentals for fewer than 30 days when the host is not present. And New York City officials have imposed several restrictions on the rental services over the years.

But thousands of homes that seemed to violate the rules continued to be listed on the companies’ platforms.

Mayor Eric Adams said the city was likely to bring additional lawsuits to compel hosts to follow the rules in an attempt to alleviate the housing crisis and aid the hotel industry, which has struggled during the pandemic.

“We are not going to let bad actors, despite their attitudes, they are not going to deplete our housing stock and our hospitality sector,” Mr. Adams said at a news conference outside the building at East 51st Street and 1st Avenue.

The investigation found that the operators advertised the units through Airbnb and other online listing services, drawing in about $2 million between 2018 and 2022 from visitors and violating laws that said the units in the building must be long-term residences, according to the lawsuit.

Inspectors also discovered faulty fire alarms and sprinklers, among other problems with the building.

Mr. Adams and other city officials also said the building owner and a broker who was running the operation repeatedly ignored violations issued by city inspectors.

Dave Sanders for The New York Times

The lawsuit, which seeks a court injunction to shut the operation down, was filed against Arron Latimer, a real estate broker; Apex East Management, the building owner; and Esther Yip, Apex’s managing agent.

Mr. Latimer did not respond to requests for comment. A woman who was reached by phone and identified herself as Ms. Yip said that she was not aware of the lawsuit and needed time to understand the allegations.

Nathan Rotman, Airbnb public policy regional lead, praised the city on Tuesday for “taking swift action on illegal hotel operators who flout the rules.”

Eliminating illegal short-term rentals would make only a small dent in the city’s housing shortage. But those rentals have still been a source of friction between the city and companies like Airbnb.

In 2018, Airbnb sued New York City after it tried to force Airbnb and other platforms to share more data about hosts, resulting in a settlement in June 2020.

The city said that the lawsuit filed on Tuesday was the product of an agreement reached in that settlement, in which Airbnb began sending some information on hosts and transactions to the city.

Christian Klossner, the executive director of the mayor’s Office of Special Enforcement, which has spearheaded investigations into illegal hotels, said that his office estimates about 13,000 Airbnb listings were for illegal short-term rentals that were regularly being rented, based on data provided by Airbnb and the city’s own analysis.

That number has come down in recent years, particularly as the pandemic depressed travel to New York City, which has long been one of Airbnb’s most important markets.

Officials expect the number of listings for illegal rentals to drop further. Last year, the city passed a bill that would for the first time require hosts to register before renting out their homes for fewer than 30 days.

The measure, which goes into effect in January 2023, mirrored regulations in other cities, including Boston and Santa Monica, Calif.

Mr. Latimer is accused in the lawsuit of using more than two dozen fake host accounts to advertise different rentals. The city estimates more than 6,500 guests stayed at rentals he ran between 2018 and 2022.

Mr. Klossner said the city was able to match up the account information of several different host accounts to target Mr. Latimer. He said that the city believes Mr. Latimer is still operating and advertising illegal rentals through other sites.

Mr. Rotman, of Airbnb, said in a statement on Tuesday that the company had issued a cease-and-desist letter “months ago” to the operators of the illegal listings that were the subject of the lawsuit.

He said Airbnb wants to work with the city and state “to differentiate between the responsible hosts who should be protected under the law and operators of properties like this who have no place on our platform.”

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