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By: Hadassa Kalatizadeh
A task force set up by New York City Mayor Eric Adams is getting aggressive about its Airbnb ban.
As reported by Crain’s NY, the mayor’s task force has sued to permanently ban the principals at the firm Stay & Smile from the hospitality industry. The lawsuit, filed on Friday in Manhattan Supreme Court, alleges that the firm ran a three-year operation that illegally rented about 250 apartments in 50 buildings across NYC, many of which allegedly took place in rent-stabilized buildings across the East Village, Hell’s Kitchen and the Upper West Side. The firm is accused of having net approximately $2 million in total. In the complaint, Mayor Adam’s office is seeking $1 million in damages, and seeks to collect heavy fines of up to $3.4 million in total for the rental transactions. The filing also says that because Stay & Smile ignored the June 2023 order to shut down its service, a special injunction is necessary.
As per Crain’s, despite the aggressive lawsuit from the Office of Special Enforcement, Stay & Smile seems to have already mostly slowed operations. This is thanks to the short-term rental registry which the city launched in the fall, which has successfully led to a sharp decline in non-compliant listings. Rentals of more than a month when hosts are not present are still allowed, and some companies have since switch to longer term models. Filings show that when the registry kicked off, company principal Gokhan Simsek signed an agreement with city officials promising to close. Per Crain’s, the firm had been renting out apartments in modest prewar walk-up buildings owned by mom-and-pop-type landlords, and then leasing them out through Airbnb and other websites making a handsome profit. Thirty of the buildings named in the filing are in Manhattan, while the other 28 sites did not have addresses listed.
A previous case brought by a building landlord specified listings at 131 Ave. A in the East Village; 363 W. 51st St. in Hell’s Kitchen; and 350 E. 91st St. in Yorkville, where Stay & Smile charged tenants $240 a night to stay in a three-bedroom, two-bath unit.
The firm actually got evicted from that apartment in 2023, and were on the hook to pay $21,000 in back rent for the unit, Crain’s reported. In recent months, Stay & Smile was booted from about a dozen apartment buildings, with landlords alleging that they were functioning like hotels.
The city says that illegal Airbnbs contribute to the city’s dire housing shortage. “We are stopping illegal operators from taking away our safe, stable, and affordable housing,” Adams said in a statement. “Today’s lawsuit sends a clear message that we will not allow you to use our valuable housing stock for unlawful personal gain.”
Stay & Smile has not yet filed a response to the lawsuit, and Crain’s was not able to reach Simsek for comment.
