Policy

Airbnb vs. NYC

Tax-free accommodations

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The city of New York prohibits owners from subletting their apartments for less than 30 days. So it's not surprising that an October report from the New York Attorney General's office found 72 percent of Airbnb units in the city that never sleeps violating at least one local law.

Airbnb, a website that allows tourists to book accommodations in private homes, is a remarkably efficient way of allowing under- and unused properties to help meet a demonstrated need for short-term lodging, especially in dense urban areas and popular vacation destinations. In fact, the A.G. found a tenfold increase in Airbnb bookings between 2010 and June 2014, representing $282 million in revenue for the service and the individual hosts.

The report calls the growth in Airbnb "staggering" and suggests that the rise of Airbnb is a dire development, asking rhetorically: "Are the new platforms fueling a black market for unsafe hotels? By bidding up the price of apartments in popular areas, do short-term rentals make metropolitan areas like New York City less affordable?"

The A.G.'s office is likely most staggered by the $33 million in taxes it believes the city is owed-the vast majority of which it will never collect, thanks to the fact that Airbnb is structured around person-to-person transactions.