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"Come on, the guy lives alone in a 3+ bedroom apartment in Brooklyn. We all know he signed that lease specifically to run a pseudo-hotel business under the guise of an Airbnb profile."

Categorically not true. Chris is a good friend, and he had a long term roommate until recently. He took on the lease because he knew they could cover rent whether or not the third room got let out. It is an amazing apartment in an awesome building, and his involvement in airbnb is not cynical or presumptuous. His listing was great value and he is an excellent host. I met him through airbnb and am incredibly grateful for it. So, try not to presume.

The only part of your comment that is germane to the GP is that before his roommate left they could cover the rent without renting the third room. "Chris being a good friend" and "His listing was great value" are irrelevant.

Lends credibility and helpfully lets us know bias.

Thanks, I really appreciate the context; didn't expect it. Though he still has other options... like approaching his roommate about the financial hardship suddenly imposed upon him, leveling with his landlord to get out of the lease, or finding a new (real) roommate.

The NYC rental market is brutal, getting out of a lease is rarely the best option. If you're lucky enough to find an affordable spot in a good neighborhood with decent space, you hold onto it with white knuckles.

> His listing was great value

Illegal transactions are often great value.

Actually, the general tone seems to be exceptionally meek: he does say he was surprised, but I got the impression that he thinks he shouldn't be surprised. It reads much more like a "look what an idiot I was, and please don't repeat my mistakes" story than "oh woe is me".

There's a lot of people trying to rent out rooms on AirBnB now, and many of them think it's a "small issue," as likely to be ignored as, say, hosting a close friend for a month or two while they're looking for a flat after an explosive breakup. But it appears that a typical landlord disagrees with that opinion, and some shout-outs to that effect might be really helpful.

I'm not even sure he was looking for sympathy. There's very little 'woe is me' in this story. I read it as a cautionary tale more than anything.

It's definitely an interesting story. The author was offering a personal experience that was enjoyable for both the guest and the host. As he said, his guests and he often established a unique connection. On the other hand:

"When I delivered my rent at the beginning of the next month, I found the management company’s office under construction. It's now a hotel. The “loft-style” rooms are now listed on Airbnb for $169 a night."

Is this how airbnb was intended to be used? Isn't the point of a bed and breakfast-style experience the small-scale feel that the author described? Are guests really going to get the same attention/enjoyment out of airbnb if it's more-or-less a run of the mill hotel experience? Also, aren't there different regulations in place for rentals vs. hotels? The property manager may be violating laws as well.

from: Paul Graham

to: Fred Wilson

date: Fri, Feb 20, 2009 at 10:00 PM

subject: airbnb already spreading to pros

I know you're skeptical they'll ever get hotels, but there's a continuum between private sofas and hotel rooms, and they just moved one step further along it.

[link to an airbnb user]

This is after only a few months. I bet you they will get hotels eventually. It will start with small ones. Just wait till all the 10-room pensiones in Rome discover this site. And once it spreads to hotels, where is the point (in size of chain) at which it stops? Once something becomes a big marketplace, you ignore it at your peril.

--pg

http://paulgraham.com/airbnb.html

There are lots of hotels listing on airbnb. And yes, some look like they were intended to be apartments.

NYC hotel laws are strict. Its very possible what the landlord is doing is illegal. If the OP was staying in his room, may be it qualified as a bed & breakfast. I don't think the landlord would meet that qualification.

In an efficient market, every niche will be filled. Resistance is futile. If there is money to be made, landlords will flock to it. The laws will change or be ignored.

It may well not be how AirBnB was intended to be used, but it definitely is. When I took a trip to London recently I rented an "apartment" (A room with a kitchen in it) from a guy on AirBnB that had at least seven rooms listed on the site.

When I wrote this I wasn't looking for sympathy. Most hosts probably have nothing to worry about. What's interesting is that my landlord became my Airbnb rival. The internet's magic is enabling disintermediation -- as the tenant, I was the middleman, and my lease gave him a way to cut me out.

I'd concur with the folks who say that 'shocked' is over-reaching. More like surprised the owner went straight for a restraining order rather than having a chat with him at their next meeting. If I were this guy's landlord I'd probably talk first, sue later. But that's just me. It is an interesting (and good) counter story to the one of an owner having their house trashed.

That the market is expanding is not surprising. There are a lot of empty bedrooms around. We've yet to see someone doing this with their foreclosed property but I'm sure that will happen too. Like Ebay, AirBnB seems to have a 'let the user do what they will and let whomever thinks they are harmed go after them.' A good example of this was the way software companies responded to people selling old copies of software on eBay or enterprise gear that normally requires a service contract. It may start a sort of 'race to the bottom' for some folks, we'll have to wait and see.

NYC is a very tenant-friendly environment.

It's critical to the landlord to have it on the record that he was running a pseudo-roominghouse out of his apartment in order to evict him later.

Otherwise, you get held up in housing court.

As landlords, we obviously have language prohibiting these sorts of actions on the parts of our tenants. But that isn't just because of our own greed. Tenement homes/boarding houses get worn down quite a bit faster than rentals. It's easy to end up with the property completely trashed, it's easier to get sued or otherwise in trouble, and it's easy to end up with neighbors complaining and disliking you.

In addition to all of that, often codes simply don't allow boarding houses, regardless of who is running them. One of our renters tried to run a boarding house without our knowledge, and when the police were called to one of their parties, the city threatened to levy considerable fines against us for running a boarding house, regardless of whether we were actually running it or getting any money from the tenants.

"If your landlord was interested in running a tenement home/boarding house/hotel" - then he would have to staff it himself too, promote it and take the risk of no bookings. With a tenant he has someone making sure the place is looked after + he has a contracted income for the whole 12 months.

By the sound of this place, the landlord could probably do quite well out of airbnb. But in that case, why not just approach the guy and cut a deal or explain that he wants him out to rent the place himself?

Yes, though if the landlord had a hand in the operation I'd imagine it would have to be a legal business. This means taxes, insurance, wages, administration costs, permits that probably make it more trouble than its worth.

Let's take a moment and see the amazing things that can be accomplished with AirBnB and marvel at the things that we do to ourselves with regulation which could make things like this practically impossible. Stifling business and innovation, deadweight losses to society, and all that economics jazz. Great for the traditional hotel industry, though, and whatever lobbyists they have at City Hall and in Albany...

Yeah, it's amazing how one can make a lot more money by violating health and safety regulations. Upton Sinclair did a great piece about how amazing it is.

Your comment is incredibly relevant and insightful because the world is black and white and our current regime, which is perfect, is all that stands between us and _The Jungle_. So-called "sensible" reforms to hotel-related legislation and economic freedom in general will only doom us all to accidental cannibalism in our hamburgers.

Seriously, this is flippin' AirBnB, not the slaughterhouse industry. I only asked you to think about the costs, not to roll everything back. Is this a knee-jerk reaction to straw-man arguments which you happen to imagine coming from your least-favorite Republicans, or what?

You criticized regulation in general so I criticized lack of regulation in general. It's not a hard leap.

If you want a more closely related set of laws, look at tenement housing. The Jungle was not the only example of an industry that badly needed reform.

True, its easy to go this grasp for this argument in the abstract. Hell, maybe the way they do things in NY is corrupt. But in reality you're grossly oversimplifying a century of progress in public policy.

Labor laws protect the needy and powerless, taxes pay for schools and city services, permits keep us safe and hold businesses accountable if they fuck customers over or violate things like heath codes...

The problem is that it's hard to tell when value arises from the elimination of a deadweight loss and when it arises from externalization of costs. E.g. environmental regulation generates some deadweight loss in the form of compliance, etc. It also seeks to internalize inherent costs of activity that would otherwise be externalized. If we got rid of the regulation, a factory owner would see a small amount of benefit from the elimination of the deadweight loss, and a very large amount of benefit from being able to externalize the inherent environmental costs of operating a factory on the local community.

In the situation of AirBnB, the externalities are imposed on all the other residents of the building and the neighborhood who signed up for apartment leases on the assumption that random people would not be coming and going. The value that accrues to the AirBnB host is generated partially by the loss of value to his neighbors. So what you have is not a creation of value, but rather the opportunistic transfer of value.

Negative externalities are best handled by tort law. Let case law develop over time. Central planning (i.e. one law with 'good intentions') does not work.

Tort law works okay when the number of interacts are limited, but it falls down when you're talking about large numbers of people interacting. Ronald Coase, who is deified in modern conservative economics circles, said as much in his seminal 1960 paper on the FCC.

So I can sue smokers for polluting my air as I walk past them? How about my neighbors who play loud music at 4am? Oh, and that guy who urinated on the plants outside my apartment?

Hmmm. I'm not sure that it's so easy for courts to take on all these cases. I'm especially worried that it's too much burden on individuals to defend their rights. Maybe we should try to find a consensus on what's OK and have the police hand out tickets?

Okay, I don't want to drag HN into flamewars for the lulz, so... Man, all you guys, chill. I'm not saying let's all go anarchist hyper-libertarian on you, or say that no regulation has any purpose or any benefit. I'm just asking you to think about the costs we impose on ourselves with it - I think this is reasonable, because you're clearly doing a perfectly good job thinking of alllll the benefits already, as your responses have clearly indicated.

And this is a specific occasion to see the costs. Most occasions you won't get to see the costs. They'll be behind the veil of obscurity and all you'll actually see is a bunch of (possibly self-interested) Republicans talking about abstractions, if the costs are mentioned at all.

Perhaps now that we are better enabled by technology we can get all or substantially all of the benefits with fewer costs in the future? Then everyone can be happy happy freedom joy double rainbow all across the sky puppy-kisses. For srsly. :)

okay i'm done here. :)

Yeah, but what are the "costs" when AirBnB "moves in?" Expectations of residential building/neighborhood such as certain amount of traffic and noise, as well as neighbors who are relatively long term (in other words, you can get to know them--example may not apply in some cities).

Face it, AirBnB is just the next hiding place for illegal rentals after tax and zoning officials caught on to vrbo. I don't understand how so many people think that they can turn the property under their control (owned or rented) into a business without liability or regulation. Just write the word taxi on your car, pick up some fares, and see what happens.

The Chinese suppliers who provided all that terrific melanine-spiked baby powder said the same thing!

Why let such silly things as laws stand in the way of profit? Who cares if someone else gets hurt...

> though if the landlord had a hand in the operation I'd imagine it would have to be a legal business

Couldn't the landlord just up the rent? That way, presumably everyone would be happy.

I pay my landlord in cash. He doesn't accept checks. Though I suppose AirBnB does force you to accept credit card and that's a bit harder to hide.

Exactly. This restraining order was the first I had heard from my landlord that he didn't want us airbnb'ing. A phone call and I would have stopped. I knew it was too good to be true.

Attached to the order was a complete printout of my Airbnb listing and all my reviews, included as evidence I had violated clauses in my lease. (Some leases, I have since learned, have evolved specific language prohibiting tenants from listing their pads on vacation-rental sites such as Airbnb.)

I don't buy your innocence here. I've been leasing houses for ~10 years now during and after college. The leases have always required a mix of landlord approval for subletting, banned running a business from the house, and prohibited occupation by non-lessees.

Here are two clauses from an older lease[1] I happen to have in my desk:

* Tenant shall not assign this Agreement, or sub-let or grant any license to use the Premises or any part thereof without prior written consent of Landlord.

* The premises shall be used and occupied by Tenant and Tenant's immediate family... exclusively, as a private single family dwelling.

Your faux innocence is pretty annoying actually. You were abusing the property for commercial purposes and you're surprised he didn't give you a friendly phone call?

1 Looks like the lease was originally snatched from www.academichomes.com/downloads/ExampleLeaseAgreement2.doc

I actually find your belligerent attitude annoying. Is that helpful to note?

OP would be 'abusing' the property if he were running a crack den. I see no problem with tenants doing whatever they want with the property that they are leasing - as long as no damage is done & neighbors are not troubled.

Then don't get doe-eyed when served with legal papers after signing a lease which explicitly prohibits the behavior.

> I see no problem with tenants doing whatever they want with the property that they are leasing - as long as no damage is done & neighbors are not troubled.

That's why landlords define "damage [being] done" and "neighbors [being] troubled" in a legally binding contract called a lease, and when you break that contract, you can get evicted.

I strongly suspect most resistance to these basic facts in this thread is typical Airbnb/pg/HN apologia. It certainly isn't coming from anyone who has rented in NYC, that's for sure.

I don't buy your innocence here.

I don't find it that hard to believe that someone would blindly sign a lease after only quickly skimming over the important bits and then never look at it again. I remember one landlord looking quite surprised when I sat in his office and read all 8 pages of the contract, asked for clarifications on a couple of points and asked for one clause to be changed. It seemed to me that she'd never seen anybody do that before.

As a landlord my lease agreement is only 3 pages, and I have always reviewed it with tenants before I allow them to sign it. I review every clause with them and have them initial every page. If they have questions or objections we sometimes modify clauses; we cross out the standard language and write in the new agreement and we both initial the change. It only takes a few extra minutes to review the entire agreement, and I wouldn't want a tenant to sign something that I know they haven't read.

My current landlord in Chelsea walked me through the exact same process. Took 10 minutes.

When said person is occasionally and randomly having friends or guests over, sure.

When said person is making a fulltime income solely from renting space in an apartment that he is only leasing, well, "most people" would think "I should probably take a look at my lease first"...

I think it's pretty much de facto standard that you must disclose first hand before you sign the lease contract whether you rent the place for living or for business. Subletting is not always forbidden but you have inform the landlord before you subleasing.

> I don't find it that hard to believe that someone would blindly sign a lease after only quickly skimming over the important bits and then never look at it again.

I don't find that hard to believe either.

What I find revolting is someone not reading the lease, violating it, then playing the victim.

The clauses in your lease which expressly forbid this sort of activity would actually probably count as the "first you heard from your landlord that he didn't want you AirBNB'ing." It's not like you were unaware of them - you wrote that you "had flouted the same clauses" before.

Now that you were cranking tons of guests through for personal gain, you were surprised when your landlord took exception. If I found out that somebody was blatantly disregarding the rental agreement they'd signed with me for commercial gain, they would not be getting a friendly "hey brother, can you please stop?" phone call either.

> This restraining order was the first I had heard from my landlord that he didn't want us airbnb'ing.

Read leases before you sign them in the future.

Read the article, the landlord is getting into AirBnB. Why would the landlord want a middleman in this case?

It sounds like the OP was actually an excellent host, and that's worth something on AirBnB. The landlord wouldn't necessarily be able to consistently pull in the kind of high-quality guests by himself.

The OP is a parasite, abusing his landlord's resources for gain. Also, if he hasn't declared his 'rental' income for tax purposes then his problems are only just beginning ...

The OP pays his rent. He abused his landlord's resources in the sense that his lease prohibited his behavior, but there's no need to label him as a parasite. His behavior is no more parasitical than the behavior of the landlord himself. If you have no moral objections to rent, your objection to someone creating value by providing rental liquidity and turning a small profit while doing so is bewildering.

>"He abused his landlord's resources in the sense that his lease prohibited his behavior"

He signed an agreement with another party saying he would not do what he ended up doing, for profit. How are you equating that with the landlord collecting rent?

Maybe if the landlord signed an agreement with one rent price, then started charging a higher price, you could equate the two behaviours.

>Why would the landlord want a middleman in this case?

for the reason I stated, someone to look after the place while multiple Airbnb guests come and go. Otherwise you'll need to pay for a cleaner and check the place every time someone stays. That middleman is taking a lot of the pain of managing a property away from the landlord.

You mean kind of like a super?

Has anyone here ever rented?!

I'm glad someone made the connection; if his landlord is going to Airbnb anyway, why not cut a deal?

If I was his landlord, I would have more than enough leverage with the breech of contract to get him to sign a new similar contract, this one charging maybe 2 times more rent. The landlord gets paid more, which in turn covers his slightly higher (or possible the same) landlords insurance and then some. The landlord lets his tenant do what he's good at (maintain a sterling Airbnb profile and choose good renters) and the landlord takes a larger cut. Worst case scenario, his tenant doesn't take the deal and the landlord proceeds to kick the tenant out for breech of contract (could possibly lead to a court battle, but breech of contract is a pretty cut and dry phenomenon and the contract most likely has breech of contract clauses built into it) and do was he was going to do anyway (rent it out through Airbnb or otherwise).

As it stands the landlord will be throwing money at lawyers (possibly covered by landlords insurance, but could effect the premiums later), which may not turn out favorably for the landlord in court, to ultimately do something that is outside his area of expertise (act as an Airbnb hotel himself).

That's what I think at least.

Also, it is unfair to the other tenants who have to deal with the coming and goings of complete strangers.

Shocked? He wrote: "My landlord had caught on..." and "The Airbnb printout looked idiotically flagrant..."

He seems quite aware of his position.

> If your landlord was interested in running a tenement home/boarding house/hotel, they wouldn't sign you into a year-long lease.

But they aren't running a hotel (their tenant is), so what're they complaining about?

If I was a landlord I'd have no more problem with this than if I was a wholesaler whose customers resold the stuff retail.

> If I was a landlord I'd have no more problem with this

Until you are a landlord, you can't really say for sure what you'd do as a landlord. I just recently started renting out my house. Going into it I was all "as long as they pay the rent on time and don't trash the place, I don't really care who rents it". But then I started getting into the fine points of liability and eviction rights and all the icky stuff you never see as a renter. And then I started showing the place to prospective tenants and started to realize how critical it is for me to choose the right people to live in my house. After doing all that, I would really hate to see the tenant let someone I know nothing about rent the place. And so the lease states they can not. The wholesaler -> customer relationship is not the same as landlord -> renter.

I don't think it's the same situation as somebody reselling goods you've sold wholesale. As other posters mention, running a commercial operation from a residential apartment brings with it a number of insurance concerns for the landlord, safety and security concerns for other tenants (which would also be the landlord's concern), and no doubt a host of other liability issues which I'm ignorant of because I'm not an NYC landlord.

If you were a landlord who was an AirBnB fan, you could certainly choose to not include clauses that specifically forbade this sort of activity. This guy chose to lease somebody else's property and then go ahead and use it in a manner that was expressly forbidden by his lease agreement to line his own pockets.

I have zero sympathy for him. He got slapped down for misusing somebody else's property and rightly so.

On the back of his landlord, really? "On the back" of a rentiering parasite?

    So, naturalists observe, a flea.  
    Hath smaller fleas that on him prey; 
    And these have smaller still to bite 'em; 
    And so proceed ad infinitum. 
        -- Jonathan Swift