New York City Cracks Down on Short-Term Rentals

By Sean O'Neill
October 3, 2012
Courtesy <a href="">AirBnB</a>

Nearly two years ago, Budget Travel helped to focus national media attention on new legislation to regulate short-term rentals in New York state. In particular, New York City has aimed to crack down on "no-tels," residential apartments converted by owners into rent-by-the-day lodging for out-of-towners.

So, it's time for an update: How are travelers being affected? Or, as locals might put it: howsitgoineh?

Surprise! City officials have actually been enforcing the state law. In the past year, inspectors have found hundreds of residential buildings in violation, says the New York Times in an excellent article.

The two goals of the law are to protect travelers from shady scam artists and to spare neighbors in any of these buildings from having to deal with the noise of fly-by-night guests.

One thing to note, though: No traveler visiting New York City has been fined—or harassed—by local authorities. The reason is simple: It's perfectly legal for a visitor to the city to stay in a vacation rental, say experts.

Short-term rentals are widespread in the city. Nearly every block of Manhattan has an owner renting out space to stay through the online booking engine AirBnB, as this map illustrates. That's just one site, with about 10,000 listings citywide. Three other respected sites are HomeAway, FlipKey, and Roomarama. All four companies say they will remove the listing of any landlord that is breaking local laws.

Budget Travel is sticking to its advice for readers that it's okay to rent short-term apartments whenever travelers plan to visit costly cities like New York. The rentals can help visitors save cash on lodging and meals, while delivering a truer live-like-a-local vibe. (For tips, check out Budget Travel's Guide to Vacation Rentals and our 6 Tips for Safer, Smarter Apartment Rentals.)


San Francisco Wants to Claim Taxes on Short-Term Rental Stays


New York Controversy: A Crackdown on "No-tels" (89 comments)

Budget Travel's Guide to Vacation Rentals

The Parisians Are on Vacation! Rent Their Apartments

Plan Your Next Getaway
Keep reading

Strikes Threaten Turbulence for Travelers

Talk of a May 1 "general strike" by the left-wing Occupy Wall Street movement has included some plans to disrupt travel, such as the goal of "blockading" one of the routes into Manhattan. What will actually happen on Tuesday is unclear, given that plans to blockade San Francisco's Golden Gate Bridge were called off over the weekend. The headlines about labor strikes in the US make for a good excuse to remind Americans who plan to head overseas this year about strikes elsewhere. In Europe, labor unions are protesting austerity cuts made by governments during the economic crisis. In the past month, days of strikes by French air traffic controllers and by workers for Spanish airline Iberia led to hundreds of flights being delayed and cancelled. But strikes aren't limited to Europe. Last Thursday at India's Delhi Airport, a strike by airbridge operators paralysed operations. Here are some highlights of threatened labor actions to come&mdash;and how to adjust your travel plans accordingly: On May 3 in Spain, workers at Madrid Airport plan to strike. On May 4 in Italy, baggage workers at Milan Airport may strike, and a strike on the intercity Trenitalia rail line is planned for May 12. On May 10 in the UK, a multi-sector strike will include members of the country's largest rail and transport union, with possible disruptions for travelers aiming to get around cities like London. On May 7 through 13 in Portugal, workers for capital city Lisbon's transport system are calling for a rolling strikes. Later in the month, a general strike is being called for nationwide, which could repeat the effect of a March strike by transport workers, which made getting around a hassle. All told, travelers on Tuesday&mdash;and throughout the peak summer travel season&mdash;should be prepared to be flexible. So if you're traveling abroad anytime soon, keep your eye on potential strikes and how they may affect your journey. These are some strategies to help you cope: Tip 1: Know the word for "strike" in the language of your destination. Search the Internet for news reports in the days before departure, looking for terms like "strike" and "airport" and "transport." Keep in mind that the English-language media often ignores foreign strikes. So it helps to look in the foreign press, too. Years ago, before a trip to Italy, I searched news articles online using the Italian word for strike, scoperto. Lo-and-behold, I found a story&mdash;which I translated using either Yahoo Babel Fish or Google Translate (I can't remember which)&mdash;learning that transport workers were going to be on strike the day my plane arrived at Milan Airport, making it impossible for me to use public transportation to get to my hotel in Lake Como. So I booked a cab from the airport in advance. The extra cost of the cab proved well worth the peace of mind. So look up foreign words for strike, too. (Case in point: Strike is "gr&egrave;ve" in French.) Tip 2: Verify flight times prior to leaving for the airport. Labor actions may disrupt schedules, yet not all of these labor actions will be long strikes. Some will be more subtle, with greater delays and cancellations than usual, as airlines cope with disruptions prompted by workers seeking pay raises and more job security. Tip 3: Don't assume trip insurance will offer blanket protection. The typical travel insurance policy offers coverage in the event of trip interruption or cancellation, but many policies exclude labor strikes along with acts of war. So talk to your insurer to confirm any details if things start looking bad for your particular travel dates. Tip 4: Fly early in the morning when possible because that lowers the odds of problems stacking up. SEE MORE FROM BUDGET TRAVEL Strike! How to Lessen the Grief of a Paris Gr&egrave;ve What to Do If Your Airline Shuts Down Confessions of a National Park Ranger


Another Day, Another Airline Merger

Reports have come out that US Airways and American Airlines are circling a merger and preparing for landing. Seems like these mergers are standard issue for major airlines these days. Southwest merged with AirTran 2010, Continental merged with United in 2011. And whenever these mergers happen, the first question always seems to be: what about my frequent flyer miles? We covered the AirTran/Southwest strategy yesterday. Reuters' Mitch Lipka did a thorough breakdown of what a US/American merger could mean for your frequent flyer miles if you were loyal to one of those airlines. He theorizes that American's AAdvantage program will reign supreme (it has more than twice as many members as the Dividend Miles program from US Airways). The real issue is that US Airways is part of the Star Alliance (along with United, Air Canada, Lufthansa, and others) while American aligns with Oneworld (airlines like British Airways and Qantas are also members). Lipka's advice: start using those points now. Yes, the uncertainty of your miles is important but we can't help but wonder&mdash;what will the name be? May we suggest the fiercely patriotic US American Airways? MORE FROM BUDGET TRAVEL 5 Credit Cards Every Traveler Should Consider United Passengers: How Long Have You Been On Hold? Top 10 TSA Checkpoint Freakouts, Humiliations, and Confrontations


Millions In Refunds In Limbo After Direct Air Collapse

When Direct Air canceled its flights and filed for bankruptcy last month it left its customers scrambling for millions of dollars in refunds, and now the company's credit card processor and escrow bank are claiming they don't have the cash to cover all the reimbursements. The Myrtle Beach, S.C.-based Direct Air sold charter flights and vacation packages up and down the Eastern Seaboard and in the Midwest. The company canceled its charter program on March 13, and on March 15 it filed for bankruptcy protection in the U.S. Bankruptcy Court for the District of Massachusetts. In a company press release issued on March 17, Direct Air explained that "rising fuel costs and other operating expenses pushed the charter company into a severe operating loss position." Following the bankruptcy filing, the U.S. Department of Transportation issued a statement for consumers impacted by the Direct Air shutdown that under federal regulations, Direct Air has in place an escrow account into which all charter participant funds were to be deposited until payment was made to the airline that was to execute the charter flight. The DOT also noted that customers who paid for their Direct Air flight by credit card should contact their credit card company to get their money back. But according to Bingham Farms, Mich.-based JetPay Merchant Services, the credit card processing company for Direct Air, the bank holding the escrow funds is not releasing them and is therefore putting almost the entire refund load on JetPay. In an affidavit to the bankruptcy filing, David Chester, COO of JetPay, explained the credit card processing company's predicament. "Without access to funds in the escrow account, JetPay is currently suffering a cash shortfall," Chester wrote. That shortfall "will likely exceed several million dollars and may reach as high as $20 million which will jeopardize the ability of JetPay to continue business." Later court filings further question whether the bank itself even has enough funds to cover the onslaught of refunds that need to be paid out and why those funds aren't available in the escrow account. The bottom line is that for Direct Air customers seeking to get their money back the process could be long and arduous, and there remains a great deal of uncertainty about whether there will even be enough money to cover all the refunds, and if not, who is responsible and what course of action customers will have. More from Budget Travel: What to Do If Your Airline Shuts Down Delta's 'Basic' New Fare: Cheaper Price, No Changes or Seat Assignments Allowed Tips On When To Book Summer Flights Amid Rising Fares


Delta's 'Basic' New Fare: Cheaper Price, No Changes or Seat Assignments Allowed

Most airline tickets are nonrefundable. But would you buy an airline ticket knowing that you couldn't change the date or flight time, even with a fee? How about the idea of buying a ticket in which you couldn't get a seat assignment, even by paying extra? Delta has just introduced a new "Basic Economy" fare on certain routes, and the tradeoffs for slightly cheaper fares are just that: no changes allowed, and seats are only assigned randomly at check-in. In other words, whoever buys these tickets has the best likelihood of winding up in the dreaded middle seat. How much cheaper are the fares? Delta doesn't say explicitly. For a sample Detroit-Fort Lauderdale round trip in June, the "Basic Economy" ticket cost $229.60, compared to $248.60 for a standard Economy round trip in which seat assignments are guaranteed at the time of booking at no extra charge and changes are allowed for a fee of $150. All things considered, a traveler sure does seem to be giving up a lot, all to save a little money. In this case, a mere $19. The Detroit Free Press categorized "Basic Economy" in a less-than-flattering way as a "new fair scheme." In Delta's press release, by contrast, the airline described the new class of service as "ideal for travelers who seek the lowest fare option, do not intend to make changes and do not consider seat choice an important part of their travel experience." So far, Delta is only offering the new "Basic Economy" option on a few routes connecting Detroit to gateways in Florida (specifically, Fort Lauderdale, Fort Myers, Orlando, and Tampa). Airlines have been "unbundling" tickets for years now, and each new change brings with it less inclusions and more restrictions. What's somewhat curious is that Delta's new "Basic Economy" option seems like it would rule out the possibility of the airline collecting some other fees from travelers who fly in this class of service. Delta notes of Basic Economy: Advance seat assignments are not permitted. Seats will be assigned by Delta at the time of customer check-in, and once assigned, no changes will be allowed. This seems to indicate that Delta isn't selling seat assignments, as carriers such as Spirit Airlines do. Also, because a traveler cannot change a Basic Economy ticket, there is no possibility of travelers with these tickets getting a chance to pay $150 change fees. There is also no incentive whatsoever for travelers to give Delta a head's up if the case arises in which they can't make their flights. If Delta were alerted early enough about someone having to miss a flight, the airline could sell the seat in advance. Delta may get lucky and wind up filling such a seat on the day of travel on a standby basis, but there's no guarantee that'll happen. "Basic Economy" doesn't seem like a good deal for travelers, and it might not even be a good deal for Delta. Nonetheless, the airline announced that, "Basic Economy may be expanded to other markets in the future as determined by Delta." MORE FROM BUDGET TRAVEL: Tips on When to Book Summer Flights Amid Rising Fares READERS' CHOICE: The Best Airports to Get Stuck In How to Get a Free Upgrade