NYC scores $845,000 settlement over alleged illicit Manhattan Airbnb operation

A real estate firm allegedly raked in $2 million over 550 short-term stays from 2019 to 2022
NYC law prohibits renting out an apartment for less than 30 days, unless a host is present in the unit

By Celia Young | March 22, 2024 - 11:54AM

A New York City real estate firm and its president will have to pay $845,000 in part of a settlement with city and state officials over an alleged illegal Manhattan Airbnb operation, the city and state announced Wednesday.

Mega Home and broker Katherine Cartagena agreed to take down the illegal listings and pay the fee after allegedly raking in $2 million through short-term stays at at 311 East 51st St. and 207 West 75th St, the Mayor’s Office of Special Enforcement and New York Department of State announced Wednesday.

“This settlement highlights the City’s commitment to ensuring people are safe and our housing stock is protected,” NYC Corporation Counsel Sylvia Hinds-Radix said in a statement.

Mega Home and Cartagena resolved the city's claims without admitting wrongdoing, said Christian Klossner, executive director of the Office of Special Enforcement. But if Cartagena advertises illegal rentals again, her real estate license will be revoked, according to the Department of State.

Cartagena and a representative from Mega Home did not respond to requests for comment.

The city alleged that more than 2,000 guests stayed at the two buildings from 2019 to 2022 across 550 short-term stays. Under city law, a host has to be present in the apartment with their guests if they want to rent out the unit for less than 30 days.

How NYC’s Airbnb rules work

Owners or renters cannot rent out an entire apartment for fewer than 30 days, unless the host remains in the same unit as the guest, and a host can have no more than two guests at once under NYC’s rules for short-term rentals.

The city made another effort to crack-down on illicit short-term rentals in 2022 by passing Local Law 18, which requires owners and renters to register their rental properties with the Mayor’s Office of Special Enforcement. Property owners can also let the city know that short-term stays are banned at their property through the city’s Prohibited Buildings List.

As NYC deals with a dearth of affordable housing, city leaders have cracked down on short-term rentals as a way to expand inventory.

“Safe, stable, and affordable housing is fundamental to a prosperous city, and with our short-term rental reporting and registration laws we are stopping illegal operators from impeding our housing goals,” Mayor Eric Adams said in a statement. “Today’s settlement sends a clear message that we will not allow anyone to use our valuable housing stock for unlawful personal gain.”

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Celia Young

Senior Writer

Celia Young is a senior writer at Brick Underground where she covers New York City residential real estate. She graduated from Brandeis University and previously covered local business at the Milwaukee Business Journal, entertainment at Madison Magazine, and commercial real estate at Commercial Observer. She currently resides in Brooklyn.

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