Short-Term Sublets in New York Banned Under New Law

By DNAinfo Staff on August 2, 2010 9:32am

Instead of paying $210 for a hotel, vacationers can rent this East Village apartment, complete with a Queen-sized bed, TV, Internet, clean towels and sheets for $100 a night.
Instead of paying $210 for a hotel, vacationers can rent this East Village apartment, complete with a Queen-sized bed, TV, Internet, clean towels and sheets for $100 a night.
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Courtesy of Zach Geller

By Jill Colvin

DNAinfo Reporter/Producer

MIDTOWN — When Zach Geller travels to Ireland later this summer, he's hoping to make some extra cash while he's gone.

Instead of letting his East Village apartment stand empty for two weeks, the 29-year-old is planning to rent it out for $100 a night. He's done so a handful of times in the past and said he's always returned to find his place safe and sound.

But thanks to a new law set to go into effect in May 2011, this could be the last summer Geller and the thousands of others who post ads for short-term rentals on online classified sites like Craigslist will be able to sublet their homes. The law bans apartment rentals for less than 30 days, making a subculture of short-term subletting that has been operating under the radar for years explicitly illegal.

The new legislation was intended to stop landlords from turning residential buildings into illegal hotels. The law doesn't apply to bed-and-breakfasts where owners remain in their apartments or to house-sitting as long no money is exchanged.

"The problem is that we have landlords who are emptying out their buildings and turning their buildings into hotels," said Michael Kaplan, deputy chief of staff Assemblyman Richard Gottfried, who sponsored the bill.

In addition to eating up affordable housing units, illegal hotels can make life "a nightmare" for  tenants who remain, he said, forcing them to endure an endless parade of strangers moving in and out of their homes, coming and going at all hours and making noise.

But Geller says that if that's the fear, he doesn't know why the bill includes tenants like him, who rent out single apartments occasionally to make a few extra bucks.

While Geller admits the idea of opening his home to strangers may seem strange to some, he says he vets everyone who stays there and has never had a problem.

"It is inherently odd," he said. "But sometimes a couple hundred dollars is worth it."

With an average hotel stay now costing $210.33 a night, according to Smith Travel Research, he says that he can offer vacationers "a pretty fantastic deal," with a Queen-sized bed, TV, Internet access, clean sheets and towels for less than half the price.

Zach Geller's East Village apartment, which he's advertising for $100 a night on Craigslist while he's on vacation.
Zach Geller's East Village apartment, which he's advertising for $100 a night on Craigslist while he's on vacation.
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Courtesy of Zach Geller

While losing the revenue wouldn't be a huge blow, Geller said, he takes issue with the government telling him what he can and can't do in his home.

"New York's full of tourists, so why should the government not let me do what I want?" he said.

Geller's not the only one crying foul. Joe Gebbia, the president of AirBnB.com, an EBay-like site for renting apartments, told Curbed that the company has received more than 300 letters from New Yorkers in protest of the legislation.

Others have begun websites, including Protect-vacation-rentals.com, which argue that the bill infringes the rights of homeowners, some of whom rely on the extra income to stave off foreclosure.

But legislators behind the bill say that, regardless of whether apartments are rented by tenants or landlords, opening the doors to strangers poses a risk.

And despite what may be in the books, Kaplan said, tenants like Geller will likely never face problems unless there are complaints.

"There’ll probably not be caught unless they have people coming and going frequently," Kaplan said."

Yarrow Willman-Cole, a tenant organizer for the Goddard Riverside SRO Law Project, said that that the uproar from tenants is misguided.

No individual sub-letters should be afraid of the bill, she said, blaming building owners now profiting from illegal hotels for "fear mongering."

"This is a win-win situation for tenants," she said.

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