New York City officials have filed a first-of-its-kind lawsuit against the owners of a brownstone in Midtown for illegally renting their units on Airbnb.
The lawsuit comes under a relatively recent New York City law that requires rental platforms like Airbnb to give information about short-term listings to the mayor’s office — such as the identity of the host and which bank accounts payments were made to. The city was able to discover the identity of the host from data obtained by Airbnb. The suit was filed as New York City is in the grip of a tight housing market, with critics blaming Airbnb for the squeeze by reserving units exclusively for tourists.
Hosts can only offer rentals for less than 30 days and only if they stay with their guests, with a limit of up to two guests, according to New York city and state law.
“We’re not going to stand by while shady brokers use illegal listings, fake host accounts, to skirt the law and defraud customers,” Mayor Eric Adams said at a press conference Tuesday. Online reviews describe the building as “astonishingly dirty,” the mayor added.
The brownstone is located at 344 East 51st Street, which is supposed to house eight families and a doctor’s office. But real estate broker Arron Latimer created 30 distinct Airbnb host accounts to advertise 85 separate listings to offer short-term rentals at the Midtown Manhattan brownstone home, according to the lawsuit.
Latimer received more than 2,200 payment transactions and $2 million from Airbnb between 2018 and 2022 from illegal short-term rentals, mostly at the Midtown Manhattan brownstone home, according to Christian Klossner, the executive director of the city’s Office of Special Enforcement. The lawsuit also names Esther Yip, the managing member of building owner Apex East Management, as a defendant.
The city received multiple complaints about the building “being used as an illegal ‘Airbnb hotel,’” since 2011, according to the lawsuit.
Latimer did not immediately respond to a request for comment. Apex East Management could not be reached.
The city is charging the defendants with “tens of thousands of dollars in fines,” according to Klossner. The city is also seeking an injunction requiring the defendants to immediately shut down their short-term rental operation.
There are roughly 13,000 active illegal listings across the city, according to the Office of Special Enforcement.
A separate ordinance will require rental hosts in New York City to register starting in January as part of an effort to preclude platforms like Airbnb from processing transactions unless the registration information matches with a city database.