Testimony of The Real Estate Board of New York Before the New York City Council Housing & Buildings Committee on Intro 1976-2020

Ryan Monell

Director, City Legislative Affairs Real Estate Board of New York (REBNY)

June 17, 2020

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The Real Estate Board of New York (REBNY) is the City’s leading real estate trade association representing commercial, residential, and institutional property owners, builders, managers, investors, brokers, salespeople, and other organizations and individuals active in New York City real estate. REBNY thanks the Council for the opportunity to testify.

In June 2018, REBNY offered testimony to this committee in support of what later became Local Law 146-2018 (LL146) which serves as the basis for this hearing. In that supportive testimony we highlighted obstacles property owners encounter when trying to curb illegal short-term rentals in their buildings and offered concrete suggestions on how to strengthen the legislation and enforcement of short-term rentals. Unfortunately, these recommendations were not incorporated into the legislation and since then the City has failed to address these obstructions surrounding short-term rentals in our neighborhoods.

On June 12, 2020, following a federal lawsuit against the City of New York on LL146, the plaintiff Airbnb agreed to a settlement with the City to establish a regulatory framework that would require the disclosure of certain rental information. This has necessitated Intro 1976-2020 which is the subject of this hearing.

While the argument was made that the abbreviated hearing timeline was due to the recent settlement, REBNY has deep concerns that the June 17, 2020 hearing was noticed less than 24 hours prior to the meeting. The Council has failed to provide ample opportunity for the public to provide feedback on legislation with such dramatic implications. Just as concerning was that this legislation was aged merely just a few hours later whereby no changes to the bill could be made before receiving public input.

REBNY hopes that the Council and the administration will be forthright in hearing the concerns of many constituents who have been affected by short-term housing rentals, who are fully aligned with the City on the need for greater transparency, and who long for more pragmatic enforcement to achieve our collective goals.

BILL: Intro 1976-2020
SUBJECT: Requiring booking services to report short-term housing rental transactions
SPONSORS: Council Members Rivera and Kallos

This bill would clarify the transactions for which a booking service charged, collected or received a fee that must be reported to the Office of Special Enforcement. It would also reduce the frequency of reporting and remove the requirement that a booking service report the specific amount of fees associated with a given transaction.

Short-term rental activity (rentals for less than 30 days) in Class A multiple dwellings (buildings with three or more units) without the host present for the duration of the stay was banned in New York State in 2010. REBNY members have diligently tried to stymie this growing practice by spending significant amount of time and resources combing through listing platforms in order to identify their buildings and to help enforce this law but have been hindered from doing so because rental platforms are not required to disclose the addresses of units being rented. We fully stand against property owners who illegally engage in short-term rentals when these units are critically needed for the public. In addition, illegal short-term rentals create several safety and fire code issues due to the transient nature the practice promotes within residential buildings. Our members have in many instances received costly fines for building and fire code violations resulting from illegal short-term rental activity often occurring without their knowledge, despite the many proactive measures taken to prohibit this behavior within their buildings.

While this legislation is a step in the right direction, there is a looming unintended consequence whereby the City will take this newly disclosed information and issue violations to property owners who have no access to this data, despite these same owners being eager to work with the City to root out this conduct.

REBNY recommends additional legislation be introduced to allow owners to be notified when their building is posted on a listing platform to allow for greater transparency. Doing so will ensure this legislation does not disempower owners from helping to enforce the law within their own buildings while allowing the City greater effectiveness in identifying those (both owners and residents) who are breaking the law. Additionally, the City should seek to work with property owners by providing regular notifications when their buildings have been used inappropriately.

There are several other ways the bill could be improved to ensure its success:

Rebuttable Presumption

REBNY recommends the City allow for the creation of a rebuttable presumption allowing violations incurred by the owner to be waived provided they demonstrate meeting certain good faith efforts to curb or prohibit illegal short-term rentals. These efforts could be defined as including lease terms or riders prohibiting illegal short-term rentals, providing notice to the residents of the law and their intent to enforce the law, and/or seeking injunctive relief from housing court. Providing such a mechanism allows owners who are aware of these activities to report violations to the City without fear of incurring fines themselves for illegal short-term rental violations by residents. Furthermore, the City should seek to penalize the party responsible for any violations associated with illegal short-term rental activity by granting the ability to pass on these fines. If a tenant is found to be the offending party, they should be subject to the penalties.

Opt-Out Provision

REBNY recommends the City require listing platforms to allow building owners to “opt out” of their services and prohibit residents from listing units in those buildings. Listing platforms with this information should be required to remove any units provided by these self-reported buildings and should face penalties for noncompliance.

REBNY appreciates the opportunity to provide feedback and is hopeful the City finally moves forward on these recommendations which will only strengthen enforcement of short-term rentals.

Thank you.