A Queens-based real estate firm and its broker-president will have to cough up $845,000 as part of a settlement reached with the city and state over accusations they illegally listed and rented out multiple Upper East apartments through Airbnb, according to court documents.
The agreement with Mega Homes and its broker-president Katherine Cartagena, which city and state officials finalized Wednesday, will require the nearly $1 million payment as restitution and will serve to shut down the illegal, short-term rentals, which were run out of 311 E. 51st St. and 207 W. 75th St. in Manhattan by Mega Home, Inc.
The hefty penalty, which stemmed from parallel probes conducted by the city’s Office of Special Enforcement and the New York State Department of State, will have to be made over the next two years and is due in full by Oct. 2026. As part of the settlement, Mega Homes and Cartagena are prohibited from renting and advertising apartments for periods under 30 days. Cartagena also agreed that if she advertises illegal transient rentals moving forward her real estate license will be revoked.
“New York is in the middle of a housing shortage crisis which makes returning a long-term rental units to the housing market crucial,” Secretary of State Robert Rodriguez said. “The Department of State’s Division of Licensing Services will continue to collaborate with our city partners to ensure the laws are being followed and that violators are held accountable.”
A report issued last month showed that the Big Apple’s rental vacancy rate stood at 1.4% last year, the lowest level it’s been at since 1968, further proof the city is in a serious housing crisis.
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According to city officials, Mega Home and Cartagena raked in more than $2 million from Airbnb between 2019 and 2022. Those payments — tied to just the two Upper East Side buildings — were for approximately 550 short-term rentals to over 2,000 guests within that three-year stretch.
The city’s legal action against Mega Homes and Cartagena is grounded in a city law that requires booking services like Airbnb to provide it with data on short-term rental transactions. The requirements include providing the physical address of the short-term rental, the internet address of the short-term rental listing, and the contact and banking information of the host.
That data, according to the city’s lawsuit, demonstrated that the firm broke the city’s Consumer Protection Law.
Mayor Adams said in a written statement that the settlement means those city laws are working as intended.
“With our short-term rental reporting and registration laws we are stopping illegal operators from impeding our housing goals,” he said.
Cartagena declined comment. A spokesperson for Airbnb did not immediately respond.
