New York Community and Political Leaders Target Airbnb’s Marketing Machine

A coalition of local and state political leaders in New York gathered this morning on the steps of City Hall in Manhattan to announce the formation of an anti-illegal hotels group targeting the business practices of Airbnb and other short-term and vacation rental companies.

Share Better is focused on highlighting illegal conversions and evictions, as well as quality of life issues for residents living near short-term rental units. Share Better includes a who’s who of City Council members, State Senators, and State Assembly Members, as well as New York City Public Advocate Tish James and Manhattan Borough President Gale Brewer. It’s receiving financial backing from its members, which include representatives of the hotel industry and hospitality workers’ unions.

Following the event this morning, the coalition released a YouTube video (below) featuring user complaints about Airbnb apartments, done in the style of Airbnb’s latest television campaign.

According to spokesperson at Share Better, the group will spend $3 million on a campaign both online and in print.

Assembly Member Richard N. Gottfried, who represents the popular Chelsea and Hell’s Kitchen neighborhoods, sent an email to supporters earlier in the week that said “We’re seeing cheery ads showing people sharing brunch with their house guests, but illegal hotel activities create problems for residents and tourists alike.”

“Airbnb’s major public relations and lobbying campaign aims to repeal or cripple New York’s illegal hotel law. There is a new coalition forming to fight back, and we hope your organization can join it.”

In a statement responding to the event, Airbnb said “We strongly oppose illegal hotels, and we are a company founded on the belief that housing should be more accessible, more affordable, and more available.”

Not a New Problem

Illegal hotels have long been a problem in New York City, with landlords turning out tenants for more profitable nightly visitors in buildings that are zoned residential. The current law that makes illegal a large portion of Airbnb’s listings in the city went into effect in 2011 after years of lobbying by neighborhood groups who opposed the illegal conversion of homes and buildings into by-the-night rentals advertised on Craigslist, Airbnb, and other services.

With Airbnb’s early success in New York came a wave of illegal hotel activity on the site that Airbnb’s leaders repeatedly ignored until the arrival of David Hantman as its head of global public policy in the fall of 2012.

These hotels were not unique to Airbnb — in fact you can still find them listed on sites such as TripAdvisor — but the same things that make Airbnb great for legal use made it just as good for breaking the rules. One host was so wildly successful on the site he launched his own independent short-term rental service that operated in dozens of buildings across the city. It was subsequently shut down as part of an historic $1 million settlement with the city.

Current State of Illegal Hotels

The new group and New York Attorney General Eric Schneiderman are after illegal hotels on Airbnb, but do they still exist?

When Skift studied Airbnb user data earlier this year, it did not find a large number of illegal hotels. Instead it found hundreds of hosts who managed multiple properties across the city, with 12% of the site’s hosts representing over 30% of the available housing on the site and a majority of the most popular housing by user reviews.

Airbnb removed many of these users — nine of the top ten are now gone from the site — in an April purge meant to assuage the state Attorney General. This purge was reported to effect 2,000 of the over 19,000 listings in the city, but comparisons of the live site to data Skift has on Airbnb users shows losses higher than this.

According to Airbnb, these hosts “weren’t providing a quality, local experience to guests,” but this was not consistent with the ratings left in guest reviews prior to their removal, which showed many of them to be both highly and frequently rated.

Despite growth in the six months between November 2013 and May 2014, Airbnb showed a net loss of listings in the New York market.

The large-scale illegal hotels have largely fled from Airbnb, returning to Craigslist or less high-profile sites. In their place on Airbnb and competitors such as HomeAway and Flipkey are multiple illegal B&B conversions of spaces in popular neighborhoods like Harlem and Williamsburg, Brooklyn, as well as landlords, renters, and investors (both foreign and domestic) who have turned over residential units to full-time use in buildings across the city.