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Report Says Most Airbnb Rentals in N.Y.C. Illegal

(CN) - Most of Airbnb's residence-sharing listings in New York City are illegal, according to a report published by the state attorney general's office.

The 41-page report, "Airbnb in the City," focuses on the New York City market from Jan. 1, 2010 to June 2, 2014, a period during which time Attorney General Eric Schneiderman found the lodging rental portal enjoyed "tenfold" growth.

In fact, Airbnb's New York City business has nearly doubled every year since 2010, and its 2014 revenues are projected to reach $282 million, his office said.

The problem is that 72 percent of Airbnb's units violated state and local laws against short-term rentals, as the Multiple Dwelling Law prohibits the renting of an entire home or apartment for less than 30 days in a "Class A" multiple dwelling, the report found.

Also, the New York Administrative Code disallows housing in non-residential buildings.

"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 written release.

"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. 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," he added.

Among the attorney general's findings was that 6 percent of Airbnb hosts - which he called "Commercial Users" - offered hundreds of units and racked up 37 percent of the revenue, with the top twelve commercial users each exceeding $1 million.

He added that some Airbnb rooms seemed to be used as illegal hostels, "where multiple, unrelated guests share tight quarters."

The attorney general's data showed that the top 10 most-booked units were rented for 1,900 nights per year. The top listing accepted an average of 13 rentals per night.

More than 40 percent of Airbnb's business took place in three Manhattan districts: Greenwich Village/SoHo, Chelsea/Hell's Kitchen and the Lower East Side/Chinatown.

By contrast, Queens, Staten Island and the Bronx combined to represent less than three percent of New York City's business.

In Brooklyn, the Williamsport and Greenpoint neighborhoods generated 40 percent of Airbnb business in the borough.

According to the report, Airbnb units generated $33 million in uncollected hotel tax revenue during the review period.

Schneiderman said that thousands of residents complained to state and local authorities about short-term rentals.

"Safety, building security, quiet enjoyment of our homes; any sense of community is under assault: please investigate," urged one resident, whose name was redacted.

Another complained, "rent in our neighborhood has become near unaffordable to us, and it is partly because people can charge such high rent to illegal hotels."

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