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Real Estate Firm Allegedly Used Over 130 Apartments For Illegal Airbnb Rentals

Dashed Arrow Jake Dobkin / Gothamist

New York City's Office of Special Enforcement is suing a Manhattan real estate brokerage firm for $21 million, accusing the company of using at least 130 apartments for illegal short-term Airbnb rentals. The units, which would have presumably been available to NYC residents had they not been turned into more lucrative short term "hotel rooms," were allegedly scattered across 35 residential buildings, including one entire building in East Harlem.

The lawsuit names the Metropolitan Property Group and several of its agents for their role in carrying out a massive commercial listing scheme over the last three years. According to the Mayor's Office of Special Enforcement, the group used various fake identities to advertise the approximately 250 listings through more than 100 host accounts.

“Over and over again, well-meaning visitors are being misled by sophisticated businesspeople into booking illegal rentals," Christian Klossner, Executive Director of the Mayor’s Office of Special Enforcement, said in a statement. "Only with better data and cooperation from the booking websites can we efficiently identify and shut down these operations."

The Metropolitan Property Group, led by CEO Sami Katri, had previously come under scrutiny after renters reported that they'd been charged a fee by the firm's brokers for apartments that were listed as no-fee. The brokerage has an F rating from the Better Business Bureau. Katri did not immediately return Gothamist's request for comment.

The lawsuit comes just a few weeks after a federal judge blocked part of Mayor Bill de Blasio's attempted crackdown on the home-sharing services, which would have required that the companies disclose sensitive information about their users. The mayor has pledged to challenge the ruling, and to put a "strong data regimen in place" for the companies.

The city currently estimates that about one-third of listings on the top five online booking platforms for short-term vacation rentals are placed by commercial renters. In some neighborhoods, there may be one commercial Airbnb listing for every five vacant apartments.

For its part, Airbnb has continued to assert that commercial renters are not a widespread problem, and are in fact the fault of the city for not creating a regulatory framework that legalizes home sharing. "This case is a clear example of just one thing: the ongoing need for a comprehensive, statewide bill that would provide for strict recourse against the few bad actors while protecting the rights of thousands of regular New Yorkers who are responsibly sharing their home,” Josh Meltzer, the head of northeast policy for Airbnb, said in a statement to Gothamist.

Meanwhile, the Times spoke with some business conference attendees staying in an Airbnb in one of the buildings named in the lawsuit, who did not seem to care much one way or another whether their hosts were regular New Yorkers or a vampiristic brokerage firm.

“I know there are sometimes issues with Airbnb hosts and regulations,” Stan Zylowski, a 46-year-old software company CEO based in Arkansas, told the paper. “I’m a platinum Marriott member of 25 years, but hotels in this city are just too expensive.”

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