Slinging Spaces to Summer Settlers is Big Business in Brooklyn

Muttering about the rental situation is on par with talking about the weather in New York City. For some it takes getting use to the very direct question, what do you pay in rent? These days it’s common to follow up with, how much do you charge on Airbnb?

As someone who has ridden the waves of cheap neighborhoods since I moved from my parents rent stabilized Manhattan apartment to go to college some time ago, I have a particular angle on the matter of Airbnb.

About a decade ago my parents were still living in the apartment I grew up in (imagine that) when Extell Development Corporation purchased our building. Extell proceeded to systematically offer exorbitant sums of money for rent-stabilized tenants to leave. Since my father was dying of cancer, he thought it best to move.

I’ve recently heard similar stories about long time rent stabilized tenants being paid to leave apartments in Williamsburg and Crown Heights so that landlords may turn them over for a higher market rent. Luxury decontrol is what they call it, but that sounds like an oxymoron. For some, being paid to leave is better than any lottery windfall; for others, it’s the bureaucratic urban legend.

The building I grew up in was a bland brick tower in Hell’s Kitchen with bars on the windows and tiny rooms, but it was our home and we lived in a community. The property manager and superintendent both lived in the building. By the time of the building’s sale, there were few children being raised in the building and there were many small businesses with offices, and a whole lot of young (sub)urban professionals with bachelor pads. Though it had changed, it was still a community.

The building, like most in New York, had a name and not just an address. It was called The Encore, “again” in French. The building was literally named for its bland repetitiveness, and spruced up by foreign semantics.

What happened next though was a surprise to all. After so many tenants left the building with the windfall pay day that had to have cost millions of dollars itself, many of the apartments sat empty and vacant. The building’s new management soon opted to furnish them and began to rent them out as hotel rooms.

This was a decade ago, long before Airbnb came along. After my parents moved literally across the street and six floors up, I was walking from their new apartment to the train one day when a young woman stopped me to ask for directions.

“I am supposed to meet my friend at a hotel right around here, but I can’t find any hotels. Where is The Metro?” she asked.

The Metro was once The Encore. I couldn’t believe that of all people to ask, she stumbled upon me. I directed her to the building, a block over from where we stood, and explained to her that it wasn’t, in fact, a hotel, it was just masquerading as one. They too used a website to list property photos with descriptions of apartments and amenities, just like Airbnb but less pretty, and advertised that website abroad.

What inevitably happened to The Encore-come-Metro was a hostile tourist takeover. A bland building with community and even a few notable creative businesses and actors including Jerry Orbach (our corner was named for him) turned into crash pad from hell. Eventually bouncers were brought in on weekends to deal with over the top parties and brawling from the mix of long term tenants and short-term hotel guests. No longer did any tenants have a stake in the building as a community, and the few rent stabilized tenants who remained were less than happy about this to say the least.

The truth was, neither staying nor going was a great choice, if one wanted to remain in the neighborhood. Without the money, tenants were stuck in the new nightmare of corporate management offices and unruly tenants while the neighborhood shops around them became unaffordable. With the money, tenants who left found new places at the much higher market rate only to get priced out eventually.
I think Airbnb is great at empowering people to make good use of their space, and in this sense is making them think more like corporations about how they can profit off of under utilized assets. This is probably why the corporate hotel world is going a little bit crazy about it.

Sure, Airbnb has made mistakes, definitely, but always tried really hard to clean them up and engage their community. I can respect that. I have other issues with the way in which innovative companies get funded and structure their companies, but let’s set that aside for a moment.

People who are meeting interesting people from around the world and hosting them in their apartments is not the problem, and will never be, even if there are some bad apples. These are individuals who care about their spaces, and for the most part are not going to rent them out to someone who is likely to destroy them. The vast majority of people using this service in the way that it was intended are using it responsibly.

The problems arise when people do not actually live in the space, the space is not a home per se, and essentially run by rental agents hoarding apartments for exorbitant amounts of money. There should be no apartments hoarded off for use only as Airbnb pads. This is creating a bubble in the rental market that is driving up prices across the board. Buildings were hoarding apartments to let out as illegal hotel rooms for many years before Airbnb, causing this to happen long before the website existed. Innovation just made it easier.

Airbnb listings should be limited to individual hosts who actually live in their apartments and regulated hotels who want to list their rooms. These are different traveling experiences and should be treated as such. Also, you should have renter’s insurance if you do not own, and these policies should factor in guests as a legitimate part of the real estate economy.

Homeowning and home-renting hosts who are letting out their personal space are inherently more responsible. These are people with one space, or multiple rooms in one place, to rent, or a homeowner with multiple homes; people who actually live in the spaces, not rental agents. They are less likely to risk renting to an irresponsible guest just for the money because it puts their home on the line.

Apartment managers, realtors and Airbnb hoarders are the exact opposite. They just want money, and more of it. I’ve read messages on local email lists seeking individuals to live in hoarded Airbnb penthouses in the East Village as protection to stave off the authorities from checking on these apartments.

One of the impacts on the local economy I’ve noticed is that now, for most freelance and independent oriented locals, it’s almost impossible to remain in a rental apartment in New York without using Airbnb or bringing in many roommates to cover the high rent, or a combination of both.

Airbnb is well aware of who the apartment hoarders are and need to make a distinction between those people and the people who are hosts and New York City ambassadors to visitors. Regulations should change to allow for hosts to let out their spaces and make additional revenue for less than 30 days.

If it weren’t for a service like this, many creative people would have already left New York because prices have soared beyond the average person’s means. Airbnb is just one way locals have held on while politicians sit on their hands and do nothing about the soaring rent.

To be fair though, I am critical of Airbnb as a service that shares community offerings and sends profits away to venture capitalists when these services can be maintained by and for the community like with the great Listings Project.

Thankfully, the Attorney General failed in his quest to subpoena Airbnb’s records and go after its user base. However, I was surprised to read that despite that, Public Advocate Letitia James persisted in writing a letter to the MTA requesting they review their decision to allow Airbnb to advertise on their property. This is a limitation on free speech, a public spectacle and a waste of time.

If the public advocate is looking for unlawful activities to monitor she might direct more attention to the illegal hotel rooms, and hoarded apartment economy and the realtors and rental agents who are running these rings, not one website. These rentals may be on that site, but they also advertise all over the world.

In the meantime, let’s acknowledge that the real perpetrators of the problems surrounding Airbnb are the big real estate interests who will never be satisfied no matter how much rent they collect, not the average New Yorker with a little bit of room to spare.

Nicole Brydson Written by:

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