NEW YORK (CBSNewYork/AP) — They’re styled as funky, friendly ways to travel. But short-term apartment rental sites such as Airbnb are sparking debate over whether they undercut or help housing affordability in New York City.

Scores of proponents and critics packed a City Council hearing Tuesday on how the short-term rental boom affects the city’s housing market and economy.

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On one side, tenants say landlords are unlawfully turning their homes into de facto hotels by renting apartments to high-paying tourists instead of full-time residents. On the other side are homeowners and tenants who say they comply with the law, and that sharing their homes help them afford to stay in them.

Before the hearing started, Airbnb supporters and opponents held dueling rallies outside City Hall.

A rally against Airbnb is held before a City Council hearing on Jan. 20, 2015. (credit: Juliet Papa/1010 WINS)

A rally against Airbnb is held before a City Council hearing on Jan. 20, 2015. (credit: Juliet Papa/1010 WINS)

“It’s actually illegal,” Rachel Christmas Derrick, of Harlem, told CBS2’s Janelle Burrell. “It’s against the laws because affordable housing has been subsidized by taxpayer dollars, and those should not be used for illegal hotels, which is what places like Airbnb do.”

Airbnb supporters said they fear those opposed are trying to take away their rights and their supplemental income.

“I do believe as a host that we give access to this city to people who otherwise would not be able to visit,” said Vita, who has had success renting out her spare bedroom in Williamsburg since 2011.

As CBS2’s Janelle Burrell reported, Lee Thomas said renting out his home in Ozone Park, Queens, allowed him to earn an extra $19,000 a year — money spent on cancer treatments that his insurance won’t cover.

“This was a stop gap, a safety net,” Thomas said. “This was a way to help myself without having to depend on government or having to reach out to social services.”

Lawmakers argue Thomas’ case is the exception and believe the city needs better regulation.

“Sometimes the regular people are also being exploited by these companies because they won’t tell them, ‘Actually, you face eviction from your home. You even face the loss of a co-op or condo you’ve purchase if you break your lease,'” state Sen. Liz Krueger said.

Airbnb and similar sites have become a focal point for discussion about whether and how to regulate the growing “sharing economy,” and whether it represents an innovative, person-to-person business model or an unregulated, unruly upstart.

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Short-term rentals also have become a thread in a larger debate about affordable housing — an especially hot topic in New York, where it’s a centerpiece of Mayor Bill de Blasio’s agenda.

The number of New York City apartments and private rooms rented through Airbnb rocketed from about 2,650 in 2010 to 16,500 in just the first five months of 2014, state Attorney General Eric Schneiderman’s office said in an October report.

Critics say such services shrink the amount of available housing by creating incentives to convert apartments into de facto hotel rooms, rather than rent them to residents.

“Airbnb and the illegal hotel operators it enables are contributing to the affordable housing crisis,” the city Public Advocate Letitia James said in a letter to the company last month.

In New York, it’s generally illegal to rent an apartment for under 30 days unless the apartment’s resident also stays there. But Schneiderman’s report said nearly three-quarters of Airbnb listings violated city or state laws. Nearly 2,000 units were booked as short-term rentals for at least half of 2013, the report said, and some users were listing multiple apartments and reeling in as much as $6.8 million over four years.

The Mayor’s Office of Special Enforcement fielded 1,150 illegal-hotel complaints last year — a 62-percent increase from 2013 — and conducted 883 inspections and issued hundreds of violation notices, focusing on health and safety concerns, said Elizabeth Glazer, who oversees the office. It recently sued one landlord.

De Blasio spokesman Wiley Norvell said Friday the city has a strong enforcement system to pursue complaints about apartments being used as illegal hotels and will pursue those that pose safety risks.

San Francisco-based Airbnb said in October it had removed many listings that violated laws. The company says most hosts comply with the law, and sharing homes helps make New York housing affordable to residents.

“The majority of hosts use the money they earn to pay their bills and stay in their homes,” Airbnb public policy head David Hantman wrote to lawmakers in a letter Friday. It called for “smart regulation,” including allowing collection of hotel taxes on Airbnb rentals in New York, as in some other cities.

Some cities have decided to accept but regulate short-term rentals. In San Francisco, restrictions include a cap on the number of days an entire home can be rented out per year.

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