AirBnB has been proving to be quite a financially lucrative option for New Yorkers. However, the landlords and owners of the apartments aren’t making money from their real-estate, but instead it is the tenants who are making the extra scratch — and they are apparently quite sour. With that in mind, it’s no wonder that AirBnB, one of the biggest and most successful endeavors offering opportunities to the city dwellers to make money from their leased accommodations, is under heavy scrutiny from the New York judicial system.
There’s no doubt, over-crowded New York is a heaven for AirBnB and its patrons. According to AirBnB’s own admission on its website, the company has facilitated over 400,000 visitors to find temporary accommodations. But, by local census, real estate experts estimate more than 60 percent of the “hosts” are directly or indirectly violating state housing or tenancy laws by harboring strangers and hence making money illegally.
Currently, AirBnB is facing a tough time in The Apple, fighting state Attorney General Eric Schneiderman’s strong-willed intention to halt the runaway growth of the portal that offers a platform for tenants to offer strangers a “place to crash.” AirBnB’s platform allows visitors to the city a place to rest for extremely short durations and at rates that are significantly lower than hotels and other commercial establishments.
It’s not just New York; AirBnB is facing similar backlash from owners and housing societies across the country. It is quite clear that whatever happens in New York, however, will have cascading effect in other similarly over-priced cities like San Francisco, Malibu, New Orleans, etc. Hence it makes sense that the company is stepping up its promotional activities before the possible clamp-down erodes its business, reported Venture Beat.
Instead of advertising its services, AirBnB is now trying to rally-up support from ordinary citizens, reported Digital Trends. Getting on the good-side of the “good and fair” people of New York, and the Politicians as well as the Regulators will have to fall in line — that seems to be the logic behind the campaign.
From a legal stand-point, AirBnB appears to be in clear violation of the state laws. Moreover, there appear to be some news that doesn’t bode well for the company’s image as a friendly and safe service. The second bone of contention is about taxation. AirBnB hasn’t been able to come up with a reliable method to collect and later pay the government taxes associated with such services. Hotels collect 14.75 percent Service Tax, while AirBnb offers nothing.
However, from a commercial perspective, the company claims to have brought the city $632 million worth of economic activity in just one year. Hence AirBnB seems confident that if it can butter-up the citizens, the law will have to bend in its favor.
[Image Credit |Digital Trends]