Want CNET to notify you of price drops and the latest stories?

NY AG's report: 72 percent of studied Airbnb listings seem illegal

New York's attorney general releases a report detailing the impact of short-term rentals on New York City. Airbnb says the conclusions "rely on incomplete and outdated information."

Dara Kerr Former senior reporter
Dara Kerr was a senior reporter for CNET covering the on-demand economy and tech culture. She grew up in Colorado, went to school in New York City and can never remember how to pronounce gif.
Dara Kerr
4 min read

Airbnb launched a major marketing campaign in New York City over the summer where it posted positive-messaging posters in the city's subways. CNET

Following a generally peaceful period in the battle between Airbnb and New York lawmakers, it appears shots are being fired again. New York Attorney General Eric Schneiderman released a 41-page report on Thursday detailing his office's take on the impact of short-term rentals on New York City.

The gist: 72 percent of the Airbnb rentals that were looked at "appeared to violate" state and local laws.

"This report raises serious concerns about the proliferation of illegal hotels and the impact of Airbnb and sites like it on the City of New York," Schneiderman said in a statement. "We must ensure that, as online marketplaces revolutionize the way we live, laws designed to promote safety and quality-of-life are not forsaken under the pretext of innovation."

Schneiderman's report raises several issues that his office has with home-sharing services like Airbnb. Most notable among those concerns is the attorney general's claim that as much as 72 percent of all Airbnb rentals over the last several years seemed to be illegal. The data for the report was obtained by the attorney general's office from a subpoena for three years' worth of Airbnb host information.

According to the report, which looked at Airbnb bookings between January 1, 2010, and June 2, 2014, there were a total of 35,354 private, short-term listings through Airbnb and more than 25,500 of those appeared to break New York state or city law. These bookings resulted in roughly $304 million in revenue for hosts and nearly $40 million for Airbnb.

Since Airbnb was founded six years ago, it's grown in leaps and bounds. The company has gone from a service that catered to couch surfers to a massive online marketplace that has hosts in more than 34,000 cities and 190 countries. The company gets between 9 percent and 15 percent of the cost of each rental, and it's impressed investors with its potential: Airbnb is the second-highest-valued venture-backed company in the world, with a valuation of $10 billion.

Other concerns brought up by Schneiderman's report include the claim that various commercial enterprises are using the service to operate multimillion-dollar businesses. For example, the report cites one instance in which a single user made $6.8 million renting out 272 separate apartments on Airbnb in less than five years. The report says more than 100 users operated more than 10 listings and these users tended to dominate the platform -- generating 36 percent of all rental transactions and 37 percent of total revenue.

Another issue the report brings up is the claim that short-term rentals are replacing permanent housing and are contributing to the city's housing crunch. The report says nearly 2,000 units became unavailable for long-term housing in 2013 due to being short-term rentals on Airbnb.

For its part, Airbnb says the report paints an inaccurate picture of the service's impact on the city.

"The report's conclusions rely on incomplete and outdated information," Airbnb spokesman Nick Papas told CNET. "For example, the findings do not account for the more than 2,000 listings we have already removed from our community in New York. Additionally, every single home, apartment, co-op and living space in New York is subject to a myriad of rules, so it's impossible to make this kind of blanket statement. That kind of uncertainty and lack of clarity is exactly why we're advocating for clear, fair rules for home sharing."

"Now we need to move forward," Papas continued. "We need to work together on some sensible rules that stop bad actors and protect regular people who simply want to share the home in which they live."

Airbnb and New York lawmakers have been wrestling since last October when Schneiderman filed the subpoena for Airbnb host information. While reluctant to hand over the data, Airbnb maintained it was willing to cooperate with the lawmakers to root out illegal hotel operators and slumlords. In what appeared to be a show of good faith, the service removed more than 2,000 listings in April.

In May, Schneiderman's subpoena was quashed and he filed a second, narrower one. Shortly after, Airbnb struck a deal with Schneiderman in which it agreed to provide the attorney general "="" from="" approximately="" 16,000="" hosts"="" shortcode="link" asset-type="article" uuid="623596d8-f1c3-434d-9095-97d61362e0af" slug="airbnb-to-hand-over-anonymous-host-data-to-new-york-ag" link-text="with " section="news" title="Airbnb to hand over anonymous host data to New York AG" edition="us" data-key="link_bulk_key" api="{"id":"623596d8-f1c3-434d-9095-97d61362e0af","slug":"airbnb-to-hand-over-anonymous-host-data-to-new-york-ag","contentType":null,"edition":"us","topic":{"slug":"online"},"metaData":{"typeTitle":null,"hubTopicPathString":"Tech^Services and Software^Online","reviewType":null},"section":"news"}"> . Schneiderman was given one year to review the data. The information on hosts did not include names, addresses, or other personally identifiable details.

In August, Schneiderman singled out 124 hosts from the original 16,000 from whom he wanted "unredacted, personal" information. Airbnb complied and contacted those hosts to let them know of the attorney general's request. The statistics in the report released Thursday are the culmination of Schneiderman's review of all of the hosts.

Airbnb has battled other cities over similar issues. Until recently, lawmakers in San Francisco have said the vast majority of short-term rentals in the city were illegal. This changed, however, when the city's Board of Supervisors passed a law earlier this month that legalized short-term rentals. While Airbnb rentals are now mostly legal in San Francisco, there are several stipulations hosts must abide by -- such as being listed in a city registry and not renting rooms for more than 90 days per calendar year.

It's unclear if Schneiderman will eventually work with Airbnb and other short-term rental sites to legalize their services. For now, the AG says he's forming a joint enforcement initiative to investigate and shut down "illegal hotels" in the city.

"The joint city and state enforcement initiative is aimed at aggressively tackling this growing problem, protecting the safety of tourists and safeguarding the quality-of-life of neighborhood residents," Schneiderman said.