The New York State legislature passed a bill last week that would make advertising entire-home rentals for fewer than 30 days illegal. The bill would affect many of the city’s residents who rent out their apartments on Airbnb while they are away. Now it is up to Governor Andrew Cuomo to sign or veto the bill.

The new bill would mean that anyone who attempts to rent out their entire home would be subject to a fine of $1,000 for a first offense and up to $7,500 for a third violation. The law would not apply to people who only rent out a room, while also staying in the apartment themselves.

The bill has been criticized by many of Airbnb’s high-profile investors such as actor Ashton Kutcher and venture capitalist Paul Graham:

Tech is the future of the NY economy, but @NYSA_Majority & @NYSenate might throw it all away with terrible anti-tech bill A8704C/S6340A

— ashton kutcher (@aplusk) June 17, 2016

The @NYSenate is trying to quietly rush through a bill banning Airbnb. If you'd like the decision to be more democratic, tell them.

— Paul Graham (@paulg) June 17, 2016

Renting out an entire apartment for less than a month has already been against the law in New York City since 2011, but this new bill would make advertising for such rentals illegal as well. While the multiple dwelling law that took effect in 2011 was meant to target illegal hotel businesses and landlords who own multiple units, it also made the actions of ordinary people in need of some extra income illegal.

If the new bill is signed into the law, it will not only be bad for the company but would also put 30,000 people in New York City at risk of being evicted, according to a survey conducted by Airbnb. After the bill made its way through the state legislature, company spokesperson Josh Meltzer said in a statement:

It’s disappointing—but not surprising—to see politicians in Albany cut a last-minute deal with the hotel industry that will put 30,000 New Yorkers at greater risk of bankruptcy, eviction or foreclosure.

Airbnb has previously been under fire for its unclear responsibility in cases of guests hosting extreme parties, wrecking people’s homes, sexual assault, prostitution, and even death.

Learn More: Uber, Airbnb: Is the “Sharing Economy” Dangerous?

Linda Rosenthal, a member of the State Assembly the bill’s sponsor, said in a statement:

This bill, once it’s signed into law, will send a strong message that we prioritize hardworking New York families and affordable housing, and will give law enforcement the tools they need to crack down on illegal hotels that destabilize communities and deprive us of precious units of affordable housing.

The next step is to wait for the Governor to either approve or reject the bill, making Airbnb partly illegal or not. If you live in New York you can weigh in on the bill here.

Emma Von Zeipel

Emma Von Zeipel is a staff writer at Law Street Media. She is originally from one of the islands of Stockholm, Sweden. After working for Democratic Voice of Burma in Thailand, she ended up in New York City. She has a BA in journalism from Stockholm University and is passionate about human rights, good books, horses, and European chocolate. Contact Emma at EVonZeipel@LawStreetMedia.com.

The post A New York Bill Could Make Listing Your Home on Airbnb Illegal appeared first on Law Street.

Under a scalding summer sun, a small group of men–all wearing hard hats and neon yellow vests, many with forearms covered in tattoos–stream out of a door that separates two vastly different worlds. On the inside: the fenced-in private property of the Trump International Hotel D.C., Donald Trump’s newest real estate venture in the heart of the nation’s capital. Outside: a lunch break, bustling Pennsylvania Avenue, and the anonymity of being any other construction worker, unbeknownst to strangers as the guys working on a Trump property. The $200 million Trump hotel–with its 263 rooms, BLT Prime restaurant, and renovated space within the 19th century Old Post Office Pavilion–officially began taking reservations earlier this week.

While it’s too early in the reservation cycle to analyze substantial data for his D.C. property, a recent study by the travel site Hipmunk found reservations in Trump hotels worldwide plummeted by 59 percent in the first quarter of 2016 compared to the first quarter of 2015.

In fact, 1.7 percent of all Hipmunk bookings were made with a Trump property in the first quarter of 2015. A year later, during that same time period and as the Trump name has sliced through the national conscience, bookings with a Trump property on the site were down to 0.7 percent.

Dividing lines: Trump is coming to the Capital one way or another. [Image courtesy of Alec Siegel for Law Street]

Not all media coverage is helpful, it seems, when trying to rent out hotel rooms.

Back on Pennsylvania Avenue, the men are hungry. Some carry lunch bags and stand under the shade of a tree, cigarettes dangling from their mouths as they quietly scan their surroundings.

“What do you want to know?” one man tiredly answers in response to a question from Law Street. “It’s money.”

They were tired of answering questions about what it’s like to work on a Trump property. After all, the billionaire has said some disparaging things about Hispanics, who make up a sizable slice of the property’s workforce.

“I love him!” another man chuckled, in reference to his employer whose name appears in giant font on giant buildings in major metropolises around the world. (And in smaller font on ballots now, too).

As Trump locked up the delegates needed to become the Republican party’s presidential nomination, the men who have been toiling away at his hotel for years barely acknowledge the namesake of the building that’s about to start welcoming guests any more. They put on their hardhats and get to work. After all, “it’s money.”

Alec Siegel

Alec Siegel is a staff writer at Law Street Media. When he’s not working at Law Street he’s either cooking a mediocre tofu dish or enjoying a run in the woods. His passions include: gooey chocolate chips, black coffee, mountains, the Animal Kingdom in general, and John Lennon. Baklava is his achilles heel. Contact Alec at ASiegel@LawStreetMedia.com.

The post The Trump Hotel: It’s Not a Name They’re Working For, It’s a Living appeared first on Law Street.

President Obama touched down in Cuba last week, making him the first sitting president to visit the nation in eighty-eight years. As the President and the First Family toured the historic center of Havana, they likely witnessed the stunning old city filled with the vintage cars and delicious cuisine that make Cuba unique. As a result of the embargo, Cuba sometimes seems like a land forgotten by time. However, the Cuba that the Obamas are witnessing this week  is very different than the Cuba the average tourist may experience in the next ten years.  As more opportunities for investment and travel open up in Cuba, foreign investors are making moves–especially within the hospitality sector. Consider that Marriott CEO Arne Sorenson is accompanying President Obama on his visit to Cuba–Marriott may be interested in investing on the island. Read on to see which companies are investing in Cuba and why.

Hotels and Hospitality

Starwood Hotels, the company which owns Westin, Sheraton, and W Hotels (just to name a few), made headlines by announcing that it will open three hotels in Cuba.  At the moment, all Cuban hotels are state-owned but Starwood has the financial and organizational power to build hotels that meet the state’s standards. The location of the third hotel has not been made public but the company has stated that the Hotel Inglaterra, which is owned by a Cuban state tourism company, will become one of Starwood’s Luxury Collection hotels and the Quinta Avenida, which is run by a Cuban military-run tourism group, will become a Four Points by Sheraton hotel.

The potential Starwood-Marriott merger that is currently on the table could have a major impact on how these new hotels will be built and run.  On the heels of the Starwood commitment, AirBnB has announced it will open listings on the island by April 2. AirBnB has in fact been planning for the opening of the country for some time now–last year, the company claimed the right to represent all private residences in Cuba. AirBnB’s chief executive Brian Chesky referred to Cuba as the fastest-growing country that AirBnB has ever launched in. Physical accommodation is not the only segment of the tourism sector that is expanding into Cuba: online booking website Priceline, Western Union, and Carnival cruises have all thrown their hats into the ring (Carnival will begin sailing cruises to the island in May). Multiple U.S. airlines have filed for permission to fly commercial flights into Cuba. At the moment, American citizens cannot travel to Cuba on a tourist visa but visas falling under the following twelve categories have been opened:

Family visits, official business of the U.S. government, foreign governments, and certain intergovernmental organizations, journalism, professional research, educational activities, religious activities, public performances, clinics, workshops, athletic and other competitions, and exhibition, support for the Cuban people, humanitarian project, activities of private foundations or research or educational institutes, exportation, importation, or transmission of information or information materials and certain export transactions that may be considered for authorization under existing regulations and guidelines.

Travelers must provide itineraries that justify their visa, but they no longer have to apply for a formal travel license from the government. Ease of travel is drawing a steadily increasing number of Americans to the island. According to  Jose Luis Perello Cabrera, an economist at the University of Havana, there was a 36 percent increase in the number of Americans visiting Cuba between January and May of 2015 alone.

American investors for the most part are flocking to the hospitality industry but there are a handful of cases of more specific investments. Consider Alabama-based Cleber LLC, a tractor company which was the first company to receive joint approval from the Cuban government and the U.S. Department of the Treasury. Cleber LLC is looking to produce tractors in the newly built port of Mariel just outside of Havana, claiming that these tractors will deliver both a financial profit and an ethical good–improving the quality of life of Cuban farmers. Tractors are just one element of machinery that Cuban farms and factories are clamoring for and as the market continues to open, an increasing number of small businesses like Cleber LLC will be given the opportunity to sell their specialized products on the island.

Chinese Investment in Cuba

American companies are not the only investors chomping at the bit to launch projects in Cuba. Venezuela has historically been Cuba’s largest trade partner but in recent years, China has been vying for that position. Cuba has long been reliant on Venezuela for oil but the regime has now turned to China for its technology and infrastructure needs.

American companies such as AT&T have projects in Cuba waiting in their pipelines but Cuban authorities have resisted American telecommunications investment. Instead, they have turned to Chinese operators such as Huawei Technology Co. Ltd., which was tasked with installing fiber-optic connections in Old Havana. Professor William M. LeoGrande of American University has said that “partly that’s a result of the fact that historically we’ve tried to use telecommunications as an avenue to undermine their government, and so consequently they really don’t trust our hardware.”  Silicon Valley tech companies are getting left behind as Huawei installs dozens of Wi-Fi hot spots around the island. Huawei has also partnered with the Cuban telecom company Etecsa to distribute smartphones, further anchoring its brand with the Cuban public.

The economic exchange between the countries has also led to Cuban efforts to break into Asian trade: Cuba’s Havana Club rum has launched major marketing campaigns targeting the Chinese market, hoping that it will be a gateway to Asia as a whole. In 2015, airlines began operating direct flights between Beijing and Havana as both Chinese investment and tourism in Cuba soared. Although Chinese investors have not paid as much attention to the hospitality sector as American companies, China’s Suntine International-Economic Trading Company has partnered with Cuba’s Cubanacan hotel group to launch a new “Hemingway Hotel”–a luxury hotel with a price tag of at least $150 million. If the Hemingway Hotel project succeeds, then Chinese corporations may commit to more hospitality projects–putting them in direct competition with companies like Starwood and AirBnB.

Conclusion

Although foreign investment appears to open up new opportunities for the Cuban people, it has been argued that foreign companies will only further entrench the power of Raul Castro rather than aiding the general Cuban populace. American (and other foreign) companies hiring Cuban workers will not necessarily be allowed to hire employees directly. Instead, they may only be permitted to hire people through state agencies, effectively blacklisting anybody the regime has deemed unacceptable. Foreign investors will pour their money into the regime itself rather than into the individual bank accounts of Cubans who they hire at their enterprises. Cuba is a nation with a rich cultural heritage that travelers have been drawn to for centuries but many Americans are unfamiliar with the island’s government and its approach towards controlling the population. As diplomatic relations between the U.S. and Cuba expand, American investors are trickling into the country, hoping to prepare it for a potential flood of tourists in the coming years.

While Americans seem to have gained the upper hand regarding early investment in hospitality services, Chinese and Venezuelan companies have been positioning themselves to win the contracts on Cuba’s largest infrastructure projects. Tech investment could be a battleground, as Cisco has already committed to a training institute and Google is interested in working on Cuban connectivity but Chinese investment in Cuba’s internet has already put them at a significant advantage. The swell of foreign investment in Cuba may not provide the stability and equality that optimists hope for, but it should not be dismissed outright. Allowing open commerce and investment in Cuba will allow the nation to engage in the global economy in a way that it has never before–but it is, at least at the moment, unclear who will truly benefit from this expansion.

Resources

VOX: Airbnb and American Hotels Aren’t Wasting Any Time Ppening up in Cuba

USA Today: Starwood: 1st U.S. Company to Run Cuba Hotels in Decades

New York Times: American Firm, Starwood, Signs Deal to Manage Hotels in Cuba

CNBC: Marriott, Starwood Team up to Take on Airbnb in New Merger

New York Magazine: Discovering Cuba, One Airbnb at a Time

Financial Times: No Flood of Investment Despite US-Cuba Thaw

ATTN: 12 Ways You Can Legally Visit Cuba

NPR: U.S.-Cuba Ties Are Restored, But Most American Tourists Will Have To Wait

AP News: Stunning 36 Percent Rise in US Visits to Cuba since January

Worker’s World: U.S. Investment in Cuba: How a Little Red Tractor Jumped to Front of the Line

American Enterprise Institute: Why US Investment Won’t Bring Change to Cuba

Wall Street Journal: U.S. Competes With China for Influence in Cuba

Jillian Sequeira

Jillian Sequeira was a member of the College of William and Mary Class of 2016, with a double major in Government and Italian. When she’s not blogging, she’s photographing graffiti around the world and worshiping at the altar of Elon Musk and all things Tesla. Contact Jillian at Staff@LawStreetMedia.com

The post The New Cuba: Who is Investing in the Island? appeared first on Law Street.

Have you ever gone to check out of your hotel room, maybe after a nice relaxing vacation, only to discover that there are “resort fees” that you owe? Resort fees can include things like use of the pool, wi-fi, housekeeping, or “complimentary” breakfast. But they usually aren’t advertised up front, so these fees come as an unpleasant surprise to the guests when they try to check out. But, if Federal Trade Commission (FTC) Chairwoman Edith Ramirez gets her way, Congress will do something to protect consumers from these tricky hidden fees.

Ramirez wrote a letter to 10 members of Congress, asking for them to draft legislation to prevent hotels from charging these expensive, and hidden fees. She specifically targeted representatives who had previously spoken out against the fees. Last year Senator Chuck Grassley (R-Iowa) called on the FTC to investigate online hotel booking sites and the hidden fees they may have that “push the price of the hotel room beyond what the actual hotel would charge.” Senators Claire McCaskill (D-Missouri) and Bob Casey (D-Pennsylvania)  have also encouraged the FTC to look into these fees. Right now, the FTC looks into each allegation individually, on a case-by-case basis, and has warned different hotels that their hidden fees may “violate the law” in the past.

A study by a non-profit consumer advocacy group called Travelers United recently found that these kinds of fees have been increasing in California, with “nearly 200 hotels in California charging an average mandatory resort fee of $17 per night.”  However, a hotel trade group, the American Hotel and Lodging Association, has stated that the number of hotels that charge these fees is on a decline overall. Rosanna Maietta, a spokeswoman for the group, stated:

The lodging industry provides guests full disclosure for resort fees charged upfront. Those fees, in addition to the base travel and hotel charges, remain transparent whether consumers book online or with the hotel directly.

However, that hasn’t stopped people from getting surprised with resort fees, and many Americans believe that fees should be disclosed before guests book anything. A poll commissioned by Travelers United found that 80 percent of respondents want resort fees included in advertised pricing, and 87 percent would be less likely to stay at a hotel if they were charged fees for amenities they did not use or want.

Whether Congress will actually take action will be interesting to watch–given that a few congresspeople have already been talking about the issue it certainly bodes well, but only time will tell.

Anneliese Mahoney

Anneliese Mahoney is Managing Editor at Law Street and a Connecticut transplant to Washington D.C. She has a Bachelor’s degree in International Affairs from the George Washington University, and a passion for law, politics, and social issues. Contact Anneliese at amahoney@LawStreetMedia.com.

The post FTC Chairwoman Goes After Pesky “Resort Fees” at Hotels appeared first on Law Street.

Law Street writer Anneliese Mahoney recently reported on Airbnb’s developing legal problems and how, frankly, they just cannot catch a break despite their ever-expanding market and wild success. Airbnb has been in a constant legal battle with New York dating back as far as 2010 and continuing well into 2014 (check out: here and here). The trend continued with Portland banning the company’s operations from all residential areas, though the city is now easing those restrictions. There were also issues in Los Angeles and the state of Michigan — truly, the list goes on and on. Now that we’re well into 2014, has Airbnb’s luck changed? The answer is unequivocally no.

As of April 29, 2014, San Francisco joined the legal battle grounds with a potential city ballot initiative against the home-sharing service. Backed by housing activist, Calvin Welch, former Planning Commissioner, Doug Engmann, and PR professional, Dale Carlson, the proposal calls for the following:

1. Creation of a public mandatory registry of all residents who rent out short-term space.
2. Evidence of landlord or homeowner permission to rent.
3. The right of any citizen to file a complaint against an Airbnb rental, go to court, and receive 30 percent in fines or back taxes as a result, along with compensation for their attorney fees.

The most controversial (and little bit scary) part of the proposal is the ability to financially reward residents for actively spying on reporting neighboring hosts who are not in compliance with these rules. While this section of the proposal may not make it to the ballot, let’s call a spade a spade and recognize that they are calling for Airbnb bounty hunters. In the midst of all these legal scuffles, it appears that the ‘share-economy’ company has yet to lose its stride and will continue to introduce new policies to disrupt the hospitality market.

Ashley Powell (@danceAPdance)

Click here to read the original post published November 6, 2013.

One of the big travel trends right now is a site called AirBnB.com. The company was founded in 2008, and the idea is pretty unique. Essentially, it allows people from cities all over the world to rent out rooms, apartments, houses, or even their couches to visitors. The relative costs are beneficial for both the travelers and the hosts, and AirBnB ensures that both sides involved in the transaction have been properly vetted and approved. Customers are also allowed to leave reviews at places they have stayed, creating a community of recommendations and verified great places to rent. This isn’t really even a new idea; in theory, it’s like hosting a friend of a friend in town for a few days in your home. The only difference is that instead of meeting your houseguest through a friend, you connected through the Internet.

Since 2008, AirBnB has hosted over 8.5 million guests, and this innovative online economy does not seem like it will slow down anytime soon. The business is fairly rewarding. According to an interview in the New York Times, a woman in Brooklyn made about $90,000 renting out two bedrooms in her house. AirBnB overall is very lucrative in the state of New York. Over the last three years, the top 100 hosts in New York have grossed a collective $54 million.

The state of New York is less enamored with the idea, and is instead pursuing legal action against the company. There are a few reasons why certain aspects of AirBnB may be illegal. One issue is that by using AirBnB, tourists are not booking hotel rooms. Included in the price of a hotel room is tax, part of which goes to the state. New York State Attorney General Eric Schneiderman is arguing that the AirBnB industry has cost New York millions in tax dollars. Last Friday, his office delivered a subpoena to AirBnB requiring that they disclose the names, locations, and revenue of all of the hosts in the state of New York. The AG’s office claim that they’re not going after the occasional renter, they’re going after those 100 or so hosts that grossed $54 million. A spokesperson for the office, stated, “we began this process in the hopes of collaborating with Airbnb to recover millions of dollars in unpaid taxes and to stop the abuse of Airbnb’s site by operators of illegal hotels. Airbnb isn’t standing up for average New Yorkers who rent out their apartments from time to time — Airbnb is standing up for highly profitable, illegal businesses that make up a huge chunk of its corporate revenue.”

AirBnB disagrees–they have filed a motion in the New York Supreme Court to challenge the subpoena. They claim that Schneiderman doesn’t have any actual evidence of wrongdoing on the site.

There’s also the question of the legality of AirBnB in regards to lease and zoning laws in New York. For example, it is usually legal to rent out your space for less than 30 days, but only if you are home. Some AirBnB hosts are home while their guests occupy an extra bedroom, but many others rent out extra apartments that they lease, or their own apartments while they are out of town for whatever reason. Rules about having guests are not generic—many are contingent on individual leases, bylaws, or building regulations. For example, some buildings may allow guests, but if they stay more than a few weeks, they need to be registered. Some buildings don’t allow the transfer or loaning of the key fobs that allow entrance into the lobby. There are a wide range of rules that govern housing in New York City and other major metro areas, but most do have some constraints on private short-term rentals of property. The chances are that most of the hosts on AirBnB aren’t breaking the law. But the AirBnB moguls in New York City might want to watch out, because this battle could get ugly.

[New York Times]

Anneliese Mahoney (@amahoney8672)

Featured image courtesy of [OuiShare via Flickr]

Ashley Powell

Ashley Powell is a founding member of Law Street Media, and its original Lead Editor. She is a graduate of The George Washington University. Contact Ashley at staff@LawStreetMedia.com.

The post Latest AirBnB Backlash: San Fran May Offer Cash to Snitch on Neighbors appeared first on Law Street.

One of the big travel trends right now is a site called AirBnB.com. The company was founded in 2008, and the idea is pretty unique. Essentially, it allows people from cities all over the world to rent out rooms, apartments, houses, or even their couches to visitors. The relative costs are beneficial for both the travelers and the hosts, and AirBnB ensures that both sides involved in the transaction have been properly vetted and approved. Customers are also allowed to leave reviews at places they have stayed, creating a community of recommendations and verified great places to rent. This isn’t really even a new idea; in theory, it’s like hosting a friend of a friend in town for a few days in your home. The only difference is that instead of meeting your houseguest through a friend, you connected through the Internet.

Since 2008, AirBnB has hosted over 8.5 million guests, and this innovative online economy does not seem like it will slow down anytime soon. The business is fairly rewarding. According to an interview in the New York Times, a woman in Brooklyn made about $90,000 renting out two bedrooms in her house. AirBnB overall is very lucrative in the state of New York. Over the last three years, the top 100 hosts in New York have grossed a collective $54 million.

The state of New York is less enamored with the idea, and is instead pursuing legal action against the company. There are a few reasons why certain aspects of AirBnB may be illegal. One issue is that by using AirBnB, tourists are not booking hotel rooms. Included in the price of a hotel room is tax, part of which goes to the state. New York State Attorney General Eric Schneiderman is arguing that the AirBnB industry has cost New York millions in tax dollars. Last Friday, his office delivered a subpoena to AirBnB requiring that they disclose the names, locations, and revenue of all of the hosts in the state of New York. The AG’s office claim that they’re not going after the occasional renter, they’re going after those 100 or so hosts that grossed $54 million. A spokesperson for the office, stated, “we began this process in the hopes of collaborating with Airbnb to recover millions of dollars in unpaid taxes and to stop the abuse of Airbnb’s site by operators of illegal hotels. Airbnb isn’t standing up for average New Yorkers who rent out their apartments from time to time — Airbnb is standing up for highly profitable, illegal businesses that make up a huge chunk of its corporate revenue.”

AirBnB disagrees–they have filed a motion in the New York Supreme Court to challenge the subpoena. They claim that Schneiderman doesn’t have any actual evidence of wrongdoing on the site.

There’s also the question of the legality of AirBnB in regards to lease and zoning laws in New York. For example, it is usually legal to rent out your space for less than 30 days, but only if you are home. Some AirBnB hosts are home while their guests occupy an extra bedroom, but many others rent out extra apartments that they lease, or their own apartments while they are out of town for whatever reason. Rules about having guests are not generic—many are contingent on individual leases, bylaws, or building regulations. For example, some buildings may allow guests, but if they stay more than a few weeks, they need to be registered. Some buildings don’t allow the transfer or loaning of the key fobs that allow entrance into the lobby. There are a wide range of rules that govern housing in New York City and other major metro areas, but most do have some constraints on private short-term rentals of property. The chances are that most of the hosts on AirBnB aren’t breaking the law. But the AirBnB moguls in New York City might want to watch out, because this battle could get ugly.

—

Anneliese Mahoney (@AMahoney8672) is Lead Editor at Law Street and a Connecticut transplant to Washington D.C. She has a Bachelor’s degree in International Affairs from the George Washington University, and a passion for law, politics, and social issues. Contact Anneliese at amahoney@LawStreetMedia.com.

Featured image courtesy of [Allen Skyy via Flickr]

Anneliese Mahoney

Anneliese Mahoney is Managing Editor at Law Street and a Connecticut transplant to Washington D.C. She has a Bachelor’s degree in International Affairs from the George Washington University, and a passion for law, politics, and social issues. Contact Anneliese at amahoney@LawStreetMedia.com.

The post AirBnB Locked in Battle with New York Attorney General appeared first on Law Street.