Airbnb, the popular online community marketplace that allows you to rent out your home to travelers, has been ruled illegal in New York City by an administrative law judge despite efforts from the web service to persuade the city not to do so. PayScale investigates why this happened to one of the Internet’s biggest recent success stories and what it means for business travelers.
It’s All About the Illegal Hotel Law
Originally, the illegal hotel law was enacted to prevent New York City landlords from renting out their residential properties as hotels for less than 29 days. But according to New York City lawmakers, this law is being violated by New York City residents who use Airbnb to save individuals and companies money on travel costs — and pocket some extra cash themselves. Offering business travelers places to stay as low as $50 a night, and a sense of “homeyness” while on the road, Airbnb seems like an easy win-win for everyone who uses it. But it poses a big threat to the hotel industry, especially in bustling metropolises like New York, which are known for spendy lodging options.
What This Means for Airbnb Hosts and Corporate Travelers
The good news is that this decision doesn’t necessarily mean that every single New York City Airbnb host will be caught violating the law — it’s enforced only if a complaint is filed. There are over 1,000 New York City listings on Airbnb right now. Residents and travelers alike can still take their chances and continue using the service, but it would be much smarter for larger corporations to stay out of the news headlines completely by heading to hotels instead during business trips to New York City. As for individuals thinking of renting out their couch, apartment or guest room, hope that you don’t end up like East Village resident Nigel Warren, who was slapped with a $2,400 fine.
In the meantime, if you are making business travel plans on a tight budget use Airbnb at your own risk, at least until they successfully get around to lobbying the decision. Or consider following another trend popular among start-ups and offer to stay with friends to save your company money. Your sacrifice may just win you some much-needed bonus points with your boss.
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