Jackson sues business owner, alleging illegal AirBnB in deed-restricted housing
Neishabouri says legal action over Broadway apartment is a "misunderstanding."
JACKSON — The Town of Jackson is suing Jeff Neishabouri, a developer and the owner of Kismet Fine Rugs, alleging that he rented, via AirBnB, an apartment that he was required to rent to Jackson Hole workers.
The town said that Neishabouri benefitted to the tune of thousands of dollars — and says legal discovery could show he made hundreds of thousands of dollars — by renting out the apartment on East Broadway near Kismet as a short-term vacation rental.
Because Neishabouri had signed a “special restriction contract,” or deed restriction, promising the apartment to members of Teton County’s workforce, officials allege that he deprived local residents of long-term housing opportunities. In the lawsuit, filed in Teton County District Court on March 12, town officials allege that Neishabouri violated the contract intentionally.
“Given the minimal time between executing the Special Restriction Contract and breaching the terms of the same, it is clear Defendants never intended to comply with the requirements,” the lawsuit read.
In a phone call with the News&Guide on Monday afternoon, Neishabouri said the lawsuit resulted from an “absolute misunderstanding.”
“That’s all I can say,” he said.
Neishabouri said he could not respond to specific allegations, that he was “extremely busy” and hung up. He did not respond to an emailed list of questions sent Tuesday morning.
The lawsuit alleged that Neishabouri was personally liable for damages owed to the town due to “fraudulent conduct.” It did not specify a dollar figure, but asked the court to award the Town of Jackson any profits he allegedly made on the apartment. They also asked the court to order Neishabouri to rent the unit to Teton County workers in the future.
Attorneys at Hirst Applegate, the Cheyenne-based firm the town hired, did not respond to a request for comment Tuesday. Jackson/Teton County Housing Director April Norton directed questions to Town Manager Tyler Sinclair, who did not respond by press time. Neither did Town Attorney Lea Colasuonno. The town does not comment on pending litigation, Director of External Affairs Susan Scarlata said Tuesday.
The town does not offer proof for the claim about short-term renting in its March 12 complaint. The News&Guide submitted a public records request for emails about the Jackson/Teton County Affordable Housing Department’s investigation of Neishabouri’s Broadway apartments earlier this year, after the issue came up at a public meeting.
Those emails, which are heavily redacted, citing attorney-client privilege and an ongoing law enforcement investigation, do not specifically accuse Neishabouri of renting the unit in question on AirBnB. Multiple emails about the investigation titled “Airbnb Ads — Bald Eagle LLC” are, however, redacted. Bald Eagle is one of Neishabouri’s development companies.
The lawsuit is a civil, rather than criminal, case.
The twofer
The town’s allegations center around a key affordable housing tool, which Neishabouri used to build the apartments in the Ringholz building.
About a decade ago, town and county officials were grappling with how to increase housing for Jackson Hole’s workforce. In an effort to incentivize private developers to build affordable housing — which wouldn’t use local government money — they adopted the town’s 2-for-1 bonus. That bonus allows developers to build bigger buildings than their base zoning allows. In exchange, they must dedicate some of that extra floor area to house members of Jackson’s workforce.
For every one square foot of extra floor area that a developer dedicates to Teton County workers, they get two extra square feet of housing for people searching on the open market. Depending on the location in Jackson, developers can then rent or sell that extra market rate housing for more money, like to someone looking for a second home.
Officials have credited the tool with increasing housing supply in Jackson, while also acknowledging that it has led to bigger buildings. Town councilors and staff are currently weighing whether to tweak the tool.
Neishabouri, for his part, was one of the first people to use it.
In 2018, according to town documents, he used the 2-for-1 bonus to secure 4,397 extra square feet for two three-bedroom units at 160 East Broadway, which are in the Ringholz building.
The allegations
The three-bedroom unit at the center of the lawsuit has to be rented to a household making at least 75% of its income from a Teton County business. The unit otherwise has no income restriction or price cap.
Officials allege Neishabouri did not follow those rules.
Shortly after signing a contract on June 26, 2019 — saying that he would rent the deed-restricted unit to qualified Teton County employees — officials allege in the lawsuit that Neishabouri started violating the agreement, including by renting it out as a short-term vacation rental on popular providers such as AirBnB and VRBO.
Town and Housing Department officials began notifying Neishabouri about the alleged violations as early as June 15, 2021, according to the lawsuit. Neishabouri continued to rent out the unit as a short-term vacation rental over the course of the last year or more, the lawsuit alleged. The town claims that Bald Eagle LLC “ignored” the notices.
Public records indicate that Neishabouri and his attorney, Scott Garland, went back and forth with the Housing Department multiple times, including as recently as January 2026.
The emails the News&Guide obtained between Garland and the Housing Department focus mostly on paperwork — tax returns — that the department alleged Neishabouri had not submitted to verify his tenants’ income and where they were making their money. Garland argued the department could verify compliance without tax returns, while the department said they were the “only credible supporting documentation” confirming someone’s compliance with town and county regulations.
With Garland, the conversation did not appear to touch on allegations about AirBnB’s. It’s unclear what happened between then and now.
This story was published on April 8, 2026.