Wd we be breaking the law by staying in one or is it the person renting it out that is committing the crime?
From tripadvisor:-
"Many of the situations are scams (the apartment may not exist, or “bait-and-switch” tactics may be used), because of safety concerns (your ability to leave the building in case of fire, for example) and because of the possibility of eviction during your stay. Anyone can put photos and an ad on the internet. Keep in mind that "brownstone townhouses" are not like townhouses in the suburbs. They are usually over 100 years old and look it. Older buildings up to 5 stories high were not required to have elevators. Typical apartments in Manhattan are small, do not have much closet space and usually have very small bathrooms. That "open plan kitchen" in a "loft space" could mean that it's just a 450-square-foot (42 square-meter) one-room studio with a kitchen against the wall.
BUILDING RULES: Aside from local laws, many large apartment buildings in NYC are condominiums or co-operatives (co-ops), and they are governed by rules about what their residents can and can not do. Most likely, their rules prohibit renting apartments to tourists on a weekly or daily basis. If the neighbours are fed up with a resident who has tourists coming in and out on a weekly basis, and if they don't want strangers to have copies of keys to the building, they will check with the super or management company to find out what's going on.
LOCAL LAWS: Short-term (less than a month) rentals of apartments in New York City violate various laws and building regulations. In general, renting an apartment to someone without a lease for less than 30 days at a time is illegal. The current local laws are confusing and often do not get enforced, but revised laws that are clearer take effect May 2011. Are there exceptions? Yes, especially for OWNER OCCUPIED buildings with 4 or fewer apartments, including the owner's apartment. But odds are the apartment vacation rental you're considering is NOT an exception. Check the DOB website above for building info, don't waste your time researching the internet until 3 in the morning trying to find that needle in NYC's housing haystack. Hosted stays in apartments or bed-and-breakfast accommodations present a different legal and regulatory situation. In Manhattan, though, these may cost about the same as hotel accommodations.
TYING UP THE HOUSING MARKET: Housing is already a hot commodity in NYC, and affordable housing in Manhattan is an endangered species. In the pursuit of higher rents and better income, some landlords illegally convert buildings into hotels. One can also make the argument that locals who hold leases on apartments they don't use creates an artificial real estate shortage and drives up rental prices. There are 3 million households in NYC. If even one half of one percent decides to rent out their lodging to tourists, that would take 15,000 living spaces off the market. Some might say you're helping the economy, but for whom? There are lots of issues that follow in the wake of such rentals".
IMPACT ON LOCAL RESIDENTS: Most locals don't like having strangers coming and going in their place of residence. Even worse, some residents are innocently used as pawns in apartment scams, unbeknownst to them!