A small percentage of hosts is responsible for over a third of all Airbnb activity in New York.

Most rentals take place in popular Manhattan and Brooklyn neighborhoods.

A large portion of rentals in the most popular neighborhoods take place in units illegally converted from long-term rental use.

The revenue generated by hosts with more than two listings on the site.

Today New York Attorney General Eric Schneidermann released a report on four and a half years of Airbnb activity in New York that used the short-term rental site’s own user data to argue that the majority of its revenue in New York is generated by illegal activity.

The report presents a picture of Airbnb’s business and users that differs wildly from the portrait the company paints in interviews, advertising, marketing, and lobbying efforts.

Studies and data scraping commissioned by Skift, which the Attorney General used in April of this year to subpoena Airbnb, made a strong argument that a majority of available rentals on the site were in violation of the state’s short-term housing laws. Data from Skift also suggested that a small group of hosts renting out multiple units were responsible for a disproportionate amount of activity on the site.

The Attorney General’s study confirmed and expanded upon this. The study is notable for a number of reasons, primary among them being that for the first time a party outside of Airbnb had insight into transaction and revenue information.

In a statement provided to Skift today, Airbnb called the data it provided the Attorney General as “incomplete and outdated.” Airbnb removed over 2,000 hosts in late April of this year. The data does not include any activity since June, but otherwise includes all transactions since it began doing business in New York in 2010.

The Attorney General’s reading of the data reveals a number of points that run strongly counter to Airbnb’s marketing message in the city.

Among them:

  • Airbnb will generate $282 million in revenue from New York listings in 2014.
  • At least 72% of Airbnb rentals in New York City are in violation of state law.
  • At least 66% of Airbnb revenue comes from illegal units.
  • Airbnb hosts with more than two listings on the site represent 6% of Airbnb hosts. These hosts generate 37% of revenue in New York.
  • 41% of host revenue was generated by listings in three popular Manhattan neighborhoods of Lower East Side/Chinatown, Chelsea, and Greenwich Village/Soho.
  • Airbnb is most popular in expensive and rapidly gentrifying neighborhoods in Manhattan and Brooklyn.
  • The majority of units that have been converted from long-term housing to rentals are in these neighborhoods.
  • Less than 3% of host revenue came from all listings in Queens, Staten Island, and the Bronx, combined.
  • One host made more than $6.8 million on the 272 units he/she rented through Airbnb.
  • 38% of the fees Airbnb received in 2013 were from units illegally converted from long-term housing.
  • The tax liability between 2010 and 2014 is at least $33.5 million.

It is true, as Airbnb has long argued, that the majority of hosts rent the places where they live. But when it comes to what portion of Airbnb’s business this actually represents, the numbers tell a much different story.

“It is no wonder that Airbnb fought to keep this data in the dark,” said New York State Senator Liz Krueger, who co-authored the state bill banning most short-term rentals. “The picture it paints is clear: nearly three quarters of Airbnb’s New York rentals are illegal, and commercial operators account for a large portion of its business.”

The report acknowledged that its numbers were a conservative estimate of illegal activity. It did not count rentals in “private rooms” as illegal, despite the practice of hosts renting out multiple bedrooms in one apartment and not remaining present during the rental, as required by law. According to Skift’s research in January, “private room” rentals represented 32% of the available listings on the site.

Along with the report, the Attorney General announced a new joint initiative between his office and the city to crack down on illegal rentals:

Together, the Attorney General’s Internet and Taxpayer Protection Bureaus and the City’s Departments of Finance and Buildings along with the Office of Special Enforcement will investigate violations of building and safety codes, tax regulations and the executive law.

No other details about the initiative have been release, suggesting that the Attorney General and the city are waiting to see how the public and Airbnb respond to the report.

Airbnb spokesman Nick Pappas said today “We look forward to working with everyone in New York in the weeks ahead.”

More on Airbnb in New York City:

The full report is below:

Download (PDF, 7.3MB)