Controversy over New York City Airbnb rentals heats up

By staying in an Airbnb host's home, travelers can get a feel for iconic neighborhoods throughout the world, often for far less than the price of a hotel room. The home sharing company, however, has had to negotiate with state and local lawmakers where regulations for this new business model are still being crafted and debated.

The company can bring in considerable revenue to cities and states through the taxation of those who offer their homes. However, some residents of popular neighborhoods don't like the idea that a neighboring house or apartment is essentially being used as a hotel.

New York is one of the places where Airbnb hasn't been warmly received. New York City law prohibits a home from being rented for fewer than 30 days unless the primary resident or owner is there. The company has also battled the state's attorney general, Eric Schneiderman over turning over data on its listings.

This June, both houses of the New York state legislature passed a bill prohibiting the advertisement of rentals that violate this law -- essentially making it impossible to offer your home on Airbnb or other home sharing sites. Fines could reach as high as $7,500 for multiple violations. The bill is now on the desk of Gov. Andrew Cuomo.

A group that includes well-known, powerful people such as the co-founders of Facebook and PayPal and actor Ashton Kutcher. are asking Cuomo to veto the bill. They signed a letter to the governor that read in part, "We are increasingly concerned New York legislators are turning their backs on innovation, saying no to technology and siding with the entrenched interests that have controlled Albany for too long."

Despite the legal battles Airbnb has faced here, New York City is still an important market for the company, which currently has over 300 New York City listings. Airbnb says that had they been able to reach an agreement with the city to share in the revenue, much like the one they reached with San Francisco lawmakers, the city and state could have added some $90 million in taxes to its coffers during the last year.

It remains to be seen what the governor decides and if perhaps some type of compromise can be reached. It's essential for homeowners who choose to become hosts to make sure that they're abiding by all local and state regulations.

Source: Fortune, "Airbnb Gains Support From Big Names In Fight Against N.Y. Regulations," Kia Kokalitcheva, Aug. 10, 2016