Like many homes in popular tourist destinations, the boxy red brick townhouse on 31st Drive in Astoria, New York, was listed on Airbnb. City records indicate that the three-story building was designed as three separate apartments, but they didn’t last.
Paris Martineau covers platforms, online influence, and social media manipulation for WIRED.
A May visit from a New York City Department of Buildings inspector revealed the building had been illegally converted into 12 rooms, four squeezed onto each floor, equipped with a total of 24 beds for nightly rental, according to a summons filed by the inspector. On Airbnb, the shoddily assembled living spaces were described with appealing titles like “Newly Renovated Apt Next to East River, NYC View!” ($195 per night) or “Clean and Comfy Room With Balcony, 15min to NYC!” ($100 per night). However, in reviews some guests described them as “packed with garbage,” “broken furniture,” and plagued by ants, centipedes, and black mold.
Before the building was partially shuttered by the city of New York in May for being, among other things, “imminently perilous” to people or property, more than 2,600 guests had booked a stay in the townhouse through Airbnb for a total of 2,268 nights, earning its host over $210,000, according to Airbnb data released by the city.
The host is part of a sprawling network that city officials say illegally converted residential units in 36 buildings—many of which were low-cost or rent-stabilized—in Queens, Brooklyn, and Manhattan into full-time short-term rentals, available primarily through Airbnb. From 2015 to 2019, the alleged scheme earned more than $5 million in revenue through Airbnb for booking 24,330 rooms and housing 63,873 guests in what the city describes as dangerous and unsanitary conditions.
In a lawsuit filed Wednesday, the city names real-estate agent Elvis Tominovic as the central figure in the “lucrative unlawful hotel operation.” The city wants Tominovic and 13 other people and businesses alleged to be involved in the scheme to turn over all revenue, properties, and proceeds from illegal rental activity, pay fines and damages, and shut down their listings.
Court documents, including data from Airbnb, and interviews paint a detailed picture of how Tominovic and his allies allegedly evaded detection by both Airbnb and the law, and misled guests as they expanded their short-term rental empire.
“What this really shows is how much economic incentive there is to break the rules,” says Ulrik Binzer, CEO of Host Compliance, which helps cities draft and enforce rules for short-term rentals. “People are only willing to go through this much scheming and violate the law at [this kind of scale] if there is enough money to be made that they consider it worth it.”
Airbnb and New York officials have spent much of the past five years in a high-profile feud. Airbnb wants to operate more freely in its largest market. City officials want to constrain home-sharing platforms, which they argue exacerbate New York’s housing shortage by incentivizing owners to convert residences into de facto hotels. Similar debates are playing out in popular tourist destinations around the country as local governments struggle to keep up with the growing popularity of short-term rental companies.
New York City is notable for its strict short-term rental laws, which prohibit renting an entire apartment or home for fewer than 30 days without the owner present. Short-term rentals of a private room or shared space are limited to no more than two guests, who must be given “free and unobstructed access to every room and to each exit within the apartment,” a provision that stops hosts from evading the ban on whole-apartment rentals by listing multiple private rooms.
Christian Klossner, executive director of the mayor’s Office of Special Enforcement, told WIRED that his department’s investigation into Tominovic’s alleged network indicated that it operated primarily on Airbnb, so they subpoenaed the company for data. The request came as Airbnb softened its historically combative approach to data-sharing requests.
“We have long said that we want to work with the city on a regulatory framework that will provide for effective enforcement against illegal hotel operators,” Airbnb spokesperson Liz DeBold Fusco told WIRED. “After working with the city and providing data in response to valid legal process, we will continue to urge the city to come to the table, so that we can find a solution that addresses our shared enforcement priorities while still protecting the rights of regular New Yorkers.”
Airbnb and other short-term rental platforms are traditionally associated with individuals renting all or part of a home part of the time, but that’s often not the case. In many high-tourism areas, listings are dominated by hospitality companies, groups of property owners, and other businesses that effectively rent properties year-round.
Klossner said the techniques allegedly used by Tominovic and his network to evade Airbnb and city agencies are common among those operating illegal short-term rental empires. “People are engaging in anti-detection techniques like establishing fake host accounts, so it doesn’t look like it is all one person, and using multiple phone numbers, even though it is one person operating multiple units,” said Klossner. “And in this case, clearly there was coaching going on.”
The city says Tominovic and others coached guests to mislead enforcement agents tasked with finding short-term rentals. In reviews included in the lawsuit, guests who stayed in listings associated with the scheme noted that the host had instructed them to lie to housing inspectors if confronted and say they were staying with a friend. Multiple guests noted in reviews that they had been told to ignore authorities banging on the door or window.
“During our stay, there was knocking on the door periodically from 1 am until 8 am, and, since we had been instructed to not answer the door under any circumstances, we were left to an incredibly unrestful sleep,” wrote one guest at an apartment on West 136th Street. “[The host] is putting people in a very uncomfortable and rather questionable situation in this apartment and I would not recommend.”
In the Astoria townhouse, a piece of wrinkled paper taped to a common-area wall instructed guests to watch out for members of “a task force [created] to go after Airbnb hosts like myself” and warned that government inspectors may try to approach people on the street toting suitcases, according to photos taken by inspectors.
“If this happens by law you are not obligated to talk to them. Keep walking and do not answer their questions,” read the sign. “They will try to intimidate you and tell you that they need to check for fire hazards in the house but these are all tricks to get in the house … They might even tell you they are the police but this is illegal, they are not the police. DO NOT LET ANYONE IN THE HOUSE. Let’s keep Airbnb alive! 🙂 ”
By the time a guest disobeyed the sign, things had gotten dire. On May 3, inspectors from the city building department and the Office of Special Enforcement found three guests from South Carolina accidentally locked into their room on the first floor, trapping them in the building; the inspectors also found two guests from Brooklyn and two guests from Singapore in different rooms on the second floor—all of whom had booked stays through Airbnb—according to affidavits filed by the inspectors.
“For years these linked operators have been operating and making money on Airbnb without a problem.”
Christian Klossner, New York City Office of Special Enforcement
The inspectors smelled gas and called the fire department, which found a gas leak, according to inspectors’ affidavits. The commissioner of the building department ordered the second floor vacated after a review determined that the conditions described in the inspectors’ report were “imminently perilous to life, public safety or the safety of the occupants or danger to property,” according to court documents. The illegally constructed extra rooms lacked required exits, sprinklers, and fire alarms, “rendering apartment unsafe to occupy,” the documents say.
The guests told the inspectors that their Airbnb host was a man named Bloz, according to an affidavit from an inspector. The person listing the apartment identified themself as “Bloz Rajkovic.” Between 2015 and 2019, Rajkovic’s account accepted more than 2,500 reservations from more than 5,000 guests at more than a dozen listings, generating $675,297 in revenue, according to Airbnb transaction data obtained by the city.
All profiles and listings mentioned in the lawsuit were removed from Airbnb’s site by Wednesday. However, an OSE researcher identified an archived version of Rajkovic’s profile, showing the account was more than six years old, and had garnered 1,524 reviews as a host. In his bio, included as an exhibit in the lawsuit, Rajkovic described himself as a “young professional who has a large townhouse in Astoria” and lists his occupation as “Airbnb.”
The account is marked as “verified,” ostensibly a sign that Airbnb checked his name and information against some form of government ID. But listing, host, and transaction data provided by Airbnb suggests that Bloz Rajkovic, the Airbnb host, might not exist.
Airbnb said the Rajkovic account had been made before its verification policy took effect. It declined to say whether the government ID associated with the account matched the name “Bloz Rajkovic.” The company said the Rajkovic account was one of many the company recently discovered had evaded its enforcement efforts. The account was removed from the platform before the lawsuit was filed, Airbnb said.
Court documents state that, of the $675,297 earned by the account, $127,813—covering more than 480 bookings associated with one listing on 48th Street in Queens—went into the bank account of Tominovic, who owns, co-owns, or manages many of the buildings named in the suit. The city claims Tominovic has a history of running illegal short-term rentals, citing a cease-and-desist order issued to him in 2014. In 2017, the city fined him $7,000 for illegal short-term rentals at another building in Queens; Tominovic said he had “rented out the upstairs/duplex to transients/Airbnb” for a time, but converted it back following the fine. Since then, multiple anonymous complaints have been filed with the city alleging the building is “being used as a hotel,” public records show.
The court documents in the new case say that 66 payments ($25,828) for the 48th Street listing went into the bank account of Tominovic’s domestic partner. Payments for 476 reservations ($97,964) at the Astoria townhouse went into the bank account of a corporation associated with Tominovic’s domestic partner and parents, the lawsuit alleges. And 66 payments ($16,034) for reservations at an unknown address went to a bank account allegedly associated with Tominovic’s sister.
Tominovic is among more than a dozen defendants named in the suit, including his sister, mother, father, friend, domestic partner, domestic partner’s sister, and four corporations associated with them, according to court documents. An analysis of Airbnb data illustrates how the defendants used shared or connected bank accounts, phone numbers, and IP addresses to create 28 distinct host accounts, which they used to expand their Airbnb empire without drawing attention from authorities or Airbnb, the city says.
Many of the accounts used names that don’t appear to be associated with a real person, and allegedly served primarily to funnel payments to Tominovic and his group. However, some mysteries remain. Much of the revenue generated by the Rajkovic profile appears to have gone to an account associated with the name “Bloz Rajkovic,” court documents say. It’s unclear whether Rajkovic is a real person. A public records search of the name did not return any matches, and “Bloz Rajkovic” hasn’t appeared online on any site indexed by Google, other than in connection with this lawsuit.
The 28 host accounts allegedly controlled by the group were central to its financial success, the city says. Between 2015 and 2019, Tominovic alone used 14 host accounts to list and book 3,872 reservations at 73 Airbnb listings in 18 residential buildings in Queens and Manhattan, earning $878,510 in payments from the accounts, according to Airbnb records. In the suit, the city describes the revenue and Tominovic’s activities as “illegal,” adding that his Airbnb listings “deceived approximately 10,000 transient guests in four years.” Tominovic did not respond to multiple requests for comment.
According to the city, the operators of these accounts frequently listed inaccurate address information for an Airbnb rental. After a booking was confirmed, the operators would message guests directly with the correct location, photos of messages included in court documents indicate. This made it harder for officials to determine the locations of some properties, the city says.
Klossner, the OSE executive director, says the investigation rested on obtaining robust data from Airbnb on the people and buildings they had identified as possibly connected. He said the data painted a picture of coordinated illegal activity.
“For years these linked operators have been operating and making money on Airbnb without a problem, using more host accounts than there are actual people and using multiple listings,” said Klossner. “Once we obtained data from Airbnb about the scope of this operation and could see the data in the way that [Airbnb] can see the data, the connections between operators became very clear.”
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This article was syndicated from wired.com