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CBS2 Exclusive: Assemblywoman Goes Undercover, Finds Industry Of Illegal Airbnb Rentals

NEW YORK (CBSNewYork) -- Business is still booming for Airbnb in New York City, even though a report last year from the state attorney general found that most of the listings in New York City violate the law and take affordable housing off the market for New Yorkers.

As CBS2's Sonia Rincon reported, Assemblywoman Linda Rosenthal, D-Manhattan, went undercover to see exactly how it's happening.

Rosenthal used a hidden camera and got one leasing agent to admit he didn't really live at an apartment and that it wasn't really supposed to be rented short-term.

"If somebody asks you something, never mention in the building Airbnb," he told her. " ... Because this is supposed to be residential."

State law prohibits someone from renting out an apartment for less than 30 days unless that person is also staying in the unit.

But those aren't the types of places Rosenthal found on Airbnb.

"Thousands of units that belong in the housing market to rent to New Yorkers are taken off the market and reserved for tourists," Rosenthal said.

She says the apartments she saw had no evidence of anyone living there.

"So, in fact, they were hotel rooms," Rosenthal said. "There were no clothes in the closet. There was no food in the kitchen."

Karina Trono from Argentina had just checked out after a couple days in an apartment on West 31st Street. Nobody was living there, and it was like a hotel, she said.

"Yes, there's an office," she explained. "You go to the office, and there's a person who asks you for the reservation. You give your reservation, and you have the key."

An apartment at a luxury building on West 33rd Street was advertised on Airbnb as being exclusively a rental for tourists. The listing actually said no one lives there.

Rosenthal said landlords, leasing agencies and Airbnb are all profiting while New Yorkers lose.

The assemblywoman went to get one key from someone named Stephanie at a leasing office, not the apartment. Stephanie did not live in the apartment.

"We have over 200 apartments. That's why everybody has to come," an employee at Ideal Oasis said, adding that Stephanie is an agent who "just books apartments."

CBS2 went to the office, too, and asked a man who said he worked there if he knew properties were being rented illegally.

"No, not at all," he said. "Definitely not happening."

Irish tourists who stopped to pick up a key for a weeklong rental were confused when CBS2 explained that the rental is illegal in New York.

"If it's not legal, how are they getting away with it then?" asked tourist Collette Bonner.

The answer to that, according to Rosenthal, is the city isn't sufficiently enforcing the law.

But the enforcement is complaint driven, and many neighbors of the short-term rental apartments don't complain -- in many cases because they don't know it's illegal.

"It's none of my business," said John Savio, a neighbor to an Airbnb unit. "If the city has a problem with it, the city has to do something about it."

Airbnb claims it advises users that they should follow local laws and provides information about them.

"Nobody supports bad actors who turn apartments into large-scale illegal hotels," an Airbnb spokesman told Rincon. "We have removed thousands of listings from our site and Ideal Oasis is prohibited from accepting reservations on our site.

Airbnb said city enforcement agencies should be targeting illegal hotel operators, but also that rental laws need to be clarified.

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