Airbnb Host Sues City After Receiving $32K In Fines

Stanley Karol, who is suing the City

An Airbnb user is suing New York City in federal court, claiming that the Mayor’s Office of Special Enforcement [OSE] retaliated against him for speaking out in favor of the company by hitting him with $32,000 in fines.

The lawsuit is being funded by Airbnb, on the day that legislation requiring Airbnb to turn over its user data to the City is being voted on by the City Council.

"Airbnb is paying for this host’s legal costs because we are committed to defending the rights of our hosts not only to share their home to make ends meet but also to exercise their First Amendment rights to free speech," said Liz DeBold Fusco, a spokesperson for Airbnb.

In his lawsuit, 59-year-old Stanley Karol claims that he is disabled, and uses Airbnb to rent out rooms in his two-family home in Sunset Park in order to pay the mortgage, taxes, and utility bills for the home.

Karol has appeared in an Airbnb video speaking about his negative experience with OSE (Airbnb says he has not been paid for participating in the video), and testified in favor of Airbnb at a City Council hearing on the legislation last month. One week later, his lawsuit claims, the City received an anonymous tip, and agents for the Mayor’s Office of Special Enforcement, which is charged with regulating and enforcing illegal hotel laws, showed up and fined him $32,000 for not having a sprinkler system and fire alarm, failing to provide proper exits, and because his basement was “illegally converted to transient use.”

Subletting your entire rental apartment out for less than 30 days is illegal in New York City, but renting out the home you own is legal under state law.

A spokesperson for the Mayor's Office said they will respond to the complaint in litigation.

The City has long insisted that it goes after illegal hotels that use Airbnb, not homeowners who need to supplement their income.

"We are not trying to go after a grandma who rents on the weekend to go on vacation. If there's someone who rents 20 weekends out of the year, that's illegal,” Councilmember Jumaane Williams said at a City Council hearing in 2015.

Enforcement has been relatively modest, even after the state passed a law banning the advertising of short-term illegal rentals. But Karol’s lawsuit points to the war that New York’s powerful hotel lobby has fought against Airbnb and its users—the complaint quotes a 2017 article from Bloomberg in which a rep for the hotel industry said, “We are bringing [OSE], wrapped in a bow, a bunch of leads.”

The legislation being voted on today, sponsored by Councilwoman Carlina Rivera, would require Airbnb to give the City the information of all its users, potentially exposing them to enforcement action. The measure is expected to pass.

“The City Council is pushing through a bill that does just one thing—it obliterates the privacy rights of thousands of New Yorkers to protect the record profits of the big hotel lobby, which has contributed hundreds of thousands of dollars to the Council’s campaign coffers,” Chris Lehane, Airbnb’s policy head, told reporters earlier today.

Airbnb’s critics charge that the service is driving up rents and displacing residents.

“While it is critical we are able to find and root out bad actors who are removing affordable housing units from the market, the aggressive enforcement efforts of the Mayor’s Office of Special Enforcement against one and two-family homeowners sharing space in their homes are deeply troubling,” said Brooklyn Councilmember Robert Cornegy, who chairs the Housing Committee.

“I routinely receive calls from residents throughout the city detailing harrowing encounters with OSE and the intimidating tactics they pursue,” Cornegy said. “They should instead be cracking down on larger-scale illegal hotel operators, which has been and continues to be the intent of the City Council as it seeks to find ways to hold these truly bad actors accountable.”

The vote is expected to happen on Wednesday afternoon. You can read Karol's suit below. [UPDATE] The bill passed and is expected to be signed by the mayor.

Federal Lawsuit Against NYC By Airbnb User by Christopher Robbins on Scribd