Renting Your Home Out, By the Hour
By: Ronda Kaysen, NY Times, March 2017
Like other New Yorkers, Alex Story occasionally rents out her home through Airbnb, relinquishing her East Village townhouse to strangers who sleep in her bed, eat in her kitchen and lounge on her sofa. But she has found a less intrusive way to profit from her property: She rents it out by the hour, instead.
In the last three years, a handful of companies have entered the New York City marketplace, providing an internet platform that allows people to list their properties for parties, corporate events and photography shoots. Companies like Splacer, Peerspace and Thisopenspace allow ordinary New Yorkers to turn their living rooms into venues for corporate retreats or baby showers, charging as much as a guest is willing to pay.
For New Yorkers who want to make money off their apartments, but are reluctant to skip town to do it, these companies offer a viable alternative to vacation rentals. “You don’t have to wash your bedsheets, you don’t have to find another place to sleep,” said Yashar Nejati, 31, the founder of Thisopenspace, a company based in Vancouver, British Columbia, that opened in New York last year. “You can rent out your space while you go run errands.”
Splacer, which started in Tel Aviv, has attracted 700 New York City listings since it entered the marketplace in 2014. A third of the spaces are residential, and the rest are commercial, like restaurants, galleries and warehouses. Peerspace, a San Francisco-based company, arrived in New York in November 2015 and now has 600 listings in this market, about 150 of which are residential. And about a third of Thisopenspace’s 300 listings in the city are residential.
The sites operate much like Airbnb. Hosts list their property online, uploading photographs, a description of the space and the rental price. All three companies charge hosts a commission. Peerspace and Thisopenspace charge the guests a fee, too. These companies are tapping into a trend that has become a hallmark of the so-called sharing economy: With a clever app and a smartphone, everyday objects in our lives can become viable revenue streams.
“Your apartment is standing vacant 14 hours a day,” said Adi Biran, 45, who started Splacer in 2014 with Lihi Gerstner, 41. “Why not use it?”
Proponents of these new sites see hourly rentals as a way to avoid the legal quagmire of vacation rentals, which can run afoul of state and city occupancy laws. However, commercial use of a residential space could raise other thorny legal issues. Operating a de facto party business out of an apartment in a residential neighborhood could violate city zoning codes or a building’s certificate of occupancy. Most residential leases prohibit commercial uses of an apartment. And co-op and condo buildings have similar restrictions. “There are all kinds of issues,” said Phyllis H. Weisberg, a real estate lawyer and the managing partner of Montgomery McCracken’s New York office. “It’s problematic.”
Ultimately, the debate about the merits of short-term rentals is not really about legal statutes, but about how people want their apartments, buildings and neighborhoods used. While supporters see short-term rentals as a relatively painless way to help pay the rent in an expensive city, critics argue that the trend turns homes into hotels. People who live next door to an apartment that is used for short-term rentals often complain about a rotating cast of endless guests diminishing their quality of life.
So, as far as the neighbors are concerned, is a site like Peerspace really all that different from Airbnb? If your neighbor turns her living room into a venue for corporate retreats, the guests may leave at nightfall, but the vibe is still altered. “It used to be that you had a group of people, and this was going to be their homes, and they had a common interest in preserving it,” Ms. Weisberg said. “Now, that’s gone.”
When Spacebase, a Berlin-based event rental company, opened in New York in October, it excluded residential listings from its database, worrying that neighbors would balk. “You’re renting out residential space to corporations, it’s the ultimate evil,” said Jan Hoffmann-Keining, 29, a founder of Spacebase. “If you already feel like tourists are taking away the residential vibe of your apartment building, corporations would do that even more.”
But for the people listing their homes online, corporate clients can mean corporate-size checks. Ms. Story, 48, a jewelry designer and an adjunct professor at New York University and the Fashion Institute of Technology, makes enough money from hourly rentals that she was able to reduce her teaching load. She rented out her three-story East Village townhouse about 20 times over the last year on Splacer and Peerspace, charging users $173 an hour. Facebook and Etsy have held company retreats in her living room, which has an exposed brick wall and a floating staircase. The space has also been used for wedding receptions, baby showers and photo shoots.
On a good month, Andrew Matusik, 47, a fashion photographer who owns a 1,600-square-foot loft on Park Avenue South, makes $11,000 through Splacer, more than enough to pay the $8,000-a-month mortgage on his $900,000 apartment. He charges renters, mostly film and photography crews, about $1,800 a day to use his studio space with vaulted, 13½-foot ceilings and oversize windows. Mr. Matusik spends six to 10 hours a week coordinating rentals. His guests have included Absolut vodka and the VH1 show “Love & Hip Hop.”
While Mr. Matusik does not mind strangers overtaking his apartment twice a week, his wife, Sunni Spencer, 42, is less enthusiastic. The couple married in 2015, about a year after Mr. Matusik started the endeavor. The couple sleeps in the mezzanine level of the loft on a Murphy bed. “For the first year of marriage, it was difficult,” he said. Ms. Spencer, a brand adviser, had trouble adjusting to the endless stream of visitors in an apartment with an open floor plan that leaves little room for privacy.
Not all parties go as planned. About a year ago, Ms. Story walked in the door of her townhouse at midnight to find that a party that was supposed to end at 10 p.m. was still going strong. Added to that, about 70 people were in her home, well over the 30-guest limit. “I was like, ‘What’s going on?’” Ms. Story recalled. “They were supposed to be in the cleanup phase. The guy gave me an attitude.” The bathroom was flooded. Ms. Story insisted that the group pay for a maid service.
All three companies provide liability insurance, and hosts can request that their guests leave a security deposit. While many hosts have renters or homeowners insurance, a residential policy may not cover damage from a commercial use. Corporate guests generally have insurance, too.
Still, cleaning up a mess takes time. In Bushwick, Brooklyn, Cristina Puron spent two days refinishing the floor of her 1,200-square-foot loft after a dance troupe destroyed the varnish and cracked the wood with their shoes. But the incident did not deter Ms. Puron, 27, from listing her rental apartment again.
She lists the space, with a hammock and a rope swing hanging in the living room, on all three sites for around $100 an hour. As for the potential for mishaps, she said: “It’s a risk that you have to take when you do this.”
