Last week the city of New York filed a lawsuit against a Manhattan apartment building claiming it was operating as a hotel. The city filed this against Metro Apartments for a few reasons. First, they claimed there were safety code violations. Second, they noted that the building was not up to hotel safety standards. Third, not stated but clearly implied, the apartment building failed to pay the required taxes for a building operating as a hotel. According to the article, the city is asking for a court order stopping the short-term rentals and the city wants more than $500,000 in damages.
Metro Apartments is certainly not doing anything to help their case when their own website hold itself out as a short-term rental. They even offer free coffee in the lobby as well as complimentary luggage storage, something not typically found – or even needed – in apartment buildings. In addition, they are ranked #30 of #185 in New York City on the TripAdvisor website, not a well known site when someone is looking for an apartment to live in. They can also be found on Expedia, Kayak, and Hotels.com.
While Airbnb is not mentioned in this lawsuit, it is nevertheless part of the continuing battle between the city and the properties that hold themselves out as short-term apartment rentals without meeting the city’s demands for hotel safety code as well as paying the additional fees and taxes.
This case seems like low hanging fruit for NYC but no doubt Airbnb will be watching the outcome carefully.