High profile Airbnb investors warned off by NYC Council members 
Last week, high profile Airbnb investors including Jeff Bezos and Ashton Kutcher received letters from two New York City Council members warning them of the illegal nature of short-term rentals in the city. The letter  from Council Members Helen Rosenthal and Jumaane Williams, cites a New York State law that prohibits the rental of entire residential units for less than 30 days. Airbnb wrote the letters off as “theatrics”  and defended its service as a way for middle class New Yorkers to make ends meet.

Two New York City Council members on Wednesday sent a letter to several high profile Airbnb(opens in a new tab) investors, including actor Ashton Kutcher and tech mogul Jeff Bezos, warning of the illegal nature of short-term renting in the Big Apple. Airbnb responded with derision, writing off the letter as "theatrics."



Kutcher(opens in a new tab) and Bezos(opens in a new tab) are both investors in -- and defenders of -- Airbnb, among their many other investments.







The letter from Council Members Helen Rosenthal and Jumaane Williams, cites a New York state law that prohibits rentals of entire residential units for less than 30 days. The law predates the popularity of Airbnb.

"We asked [Airbnb executive Chris Lehane] if Airbnb would voluntarily install simple software to keep illegal rentals off of their website," the lawmakers wrote. "Remarkably, he refused, saying that he did not agree with the New York State law."



However, enforcement of the law has been limited; the mayor's office of special enforcement is responsible for responding to complaints. There are more than 35,000 Airbnb listings in the city.

Airbnb responded strongly to the letter.

"Most lawmakers are having a serious conversation about how to regulate home sharing responsibly in New York, but some are focused on theatrics," an Airbnb spokesperson said of the two council members, according to Crain's New York(opens in a new tab). "Council Members Williams and Rosenthal are clearly committed to punishing middle-class New Yorkers who simply want to share the home in which they live in order to make ends meet."

"For our part, if we were invested in a company that knowingly engaged in so much illegal activity, we would think twice about keeping our money in that company," wrote Rosenthal and Williams, who both represent districts in Manhattan.

Excerpts from the letter:

Dear Airbnb Investors:



We are writing to alert you to new information regarding your investment in Airbnb. By Airbnb's own admission, the majority of their listings in New York City are illegal. We are therefore increasing regulation on Airbnb activity, which could impact the value of your investment.



New York City recently allocated several million dollars to fund:



Education efforts to make all New Yorkers aware that renting out their entire apartment, condo, or cooperative for fewer than 30 days is illegal;



Information technology to scrape the websites of Airbnb and other short-term rental platforms to identify users who post illegal listings; and



Inspectors from multiple City Agencies to identify and fine apartment owners or tenants who post illegal listings on Airbnb and other short-term rental platforms. In addition, we are passing legislation to significantly increase the fines for anyone caught posting their apartment for an illegal rental on any online platform.



We recently met with Airbnb’s representative, Chris Lehane. We asked him if Airbnb would voluntarily install simple software to keep illegal rentals off of their website. Remarkably, he refused, saying that he did not agree with the New York State law.



As you can imagine, we were disappointed to learn that a nearly $30 billion company would knowingly allow illegal activity on its website. Other online platforms like Craigslist and Reddit have policies in which they promise to ensure their users obey the law and remove content that disobeys the law. It is remarkable that Airbnb would refuse a seemingly commonsense corporate practice to maintain the integrity of their product.



...



For our part, if we were invested in a company that knowingly engaged in so much illegal activity, we would think twice about keeping our money in that company.







The fight over New York's rentals

New York City is the largest metropolitan market for Airbnb, based on the number of listings tracked on InsideAirbnb.com(opens in a new tab). It is also a city with high rents and few vacancies, factors that make short-term rentals more concerning than in cities where affordable housing is more readily available.

"If we were invested in a company that knowingly engaged in so much illegal activity, we would think twice about keeping our money in that company."

Airbnb, however, says its services are used by "middle-class New Yorkers" trying to "make ends meet."

Rosenthal and Williams have been going hard at the short-term rental service for some time: Last year they led a grueling City Council hearing on short-term rentals in the city. And just last week, the two responded to New York City Mayor Bill de Blasio's appearance on (opens in a new tab)The Daily Show(opens in a new tab), once again focusing on what it says is the misleading message Airbnb puts forth.







Not all U.S. politicians are against Airbnb: In Arizona, the state senate has given preliminary approval to a bill(opens in a new tab) that would ban local governments from banning short-term rentals on sites like Airbnb.



Airbnb has also touted recent policy wins in Paris, Rome, Amsterdam and Catalonia, as well as economic impacts in Africa and Australia.

Additional reporting by the Associated Press

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