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Airbnb Listings Mostly Illegal, New York Blasts

New York's AG raked Airbnb in a new report that said the vast majority of its New York listings were illegal hotels.

New York turned the heat up on Airbnb Thursday in the latest salvo against the online listing website over whether it owes the city taxes. New York's Attorney General Eric T. Schneiderman raked Airbnb in a new report Thursday that said the majority of its listings violated housing laws. And New York City and state are going to start investigating and cracking down on the biggest offending Airbnb hosts.

"We must ensure that, as online marketplaces revolutionize the way we live, laws designed to promote safety and quality-of-life are not forsaken under the pretext of innovation," said Schneiderman, who is up for re-election. According to an analysis of the site's data the AG's office subpoenaed, over 72 percent of Airbnb's New York listings appeared to violate rental and zoning laws, and others appeared to be illegal hostels. For example, one user administered 272 listings, booked 3,024 reservations and made $6.8 million in revenue, according to the AG's office. While only 6 percent of hosts ran large enterprises on the site, they generated 37 percent of the total revenue, or $168 million. Schneiderman has argued that Airbnb hosts should pay the city's 14.7 percent hotel-occupancy tax. Airbnb spokesman Nick Papas said in a statement that the company has helped "countless families pay their bills and stay in their homes" and that it would join regulators to craft new rules to stop the "bad actors."

-- Ben Popken