New York City’s law limiting short-term rentals went into effect on Tuesday. To offer stays of less than 30 days, hosts must stay in the unit with their guests.
No one can predict the future of real estate, but you can prepare. Find out what to prepare for and pick up the tools you’ll need at Virtual Inman Connect online Nov. 1-2, 2023. And don’t miss Inman Connect New York on Jan. 23-25, 2024, where AI, capital and more will be center stage. Bet big on the future and join us at Connect.
New York City’s short-term rental crackdown went into effect on Tuesday, razoring the city’s bustling short-term rental industry ahead of the holiday travel season. The law requires owners to register their homes and stay with their guests for reservations less than 30 days, among several other requirements.
Although the law applies to all short-term rental platforms, news coverage has focused on Airbnb, which has the largest short-term rental footprint in NYC. The law has cut New York City’s nightly Airbnb stock from nearly 23,000 units down to approximately 260 — the number of short-term rental owners who have successfully completed their applications with NYC’s Office of Special Enforcement (OSE).
“New York City’s new short-term rental rules are a blow to its tourism economy and the thousands of New Yorkers and small businesses in the outer boroughs who rely on home sharing and tourism dollars to help make ends meet,” Airbnb Global Policy Director Theo Yedinsky told CNN in a written statement on Tuesday. “The city is sending a clear message to millions of potential visitors who will now have fewer accommodation options when they visit New York City: You are not welcome.”
Passed in January, Local Law 18 requires short-term rental owners to register their homes or apartments with the Office of Special Enforcement. Once approved, rental owners cannot rent their full home or apartment for less than 30 days. For stays less than 30 days, owners must share the space with guests. The OSE also limits the number of guests for short-term rentals to two.
AirDNA, a company that tracks the short-term rental industry, estimates there are 22,500 nightly rentals in New York City. An Inman article on Aug. 29 said the OSE had only approved 199 of approximately 2,000 applications. The OSE provided an updated number to CNN, saying as of “early last week” the city had approved 260 of more than 3,200 applications. The office returned 800 applications for missing information or inaccuracies.
Based on those numbers, Airbnb’s footprint in the city could be reduced anywhere from 98 percent to 85 percent based on the data the OSE provided to CNN. Inman contacted the OSE for an update on the number of approved applications and the number of applications currently in the queue as of Sept. 5. They did not respond in time for publication.
The crackdown on short-term listings comes as homeowners, investors, homebuyers, tenants and housing advocates battle over precious housing stock.
Short-term rental advocates say the crackdown infringes on homeowners’ rights to generate income from their homes and snatches choices from travelers who prefer unique lodging experiences and want to stay outside of the city center, as Airbnb claims “80 percent of New York City’s census tracts are home to Airbnb listings but no hotels.”
Brooklyn Airbnb host Margenett Moore-Roberts told Wired on Tuesday the new law offers a stiff blow to NYC homeowners, who use the platform to support their livelihood in a city that’s notorious for a high cost of living. Moore-Roberts told the publication she’s been renting out a two-bedroom apartment in her brownstone for short-term stays. Because her family doesn’t stay in the unit full time — they use it as a flex space for rentals, hosting family and remote work — they can’t rent it for less than 30 days.
“They’ve used a very blunt object when they should have used a scalpel,” she said, while noting that she’s currently unemployed. “Putting us all in that same bucket of players is really unfair and not helpful.”
On the other hand, housing advocates will likely see OSE’s decision to pull the reigns on short-term rentals as a win. New York City’s median rent reached a new high of $3,799 in July and several headline-making data analyses of the city’s lackluster affordable housing stock have painted a dire picture for the city’s renters and aspiring homeowners.
“Some people just don’t like short-term vacation rentals for one reason or another,” Nick Scarci, state and local government affairs director with the Vacation Rental Management Association, told Inman in a previous report. “Folks have moved away from just party house type discussions and there’s a lot more about affordable housing and [that] it’s eating away at the housing supply.”
Scarci said Airbnb’s policy is ultimately “bad” and could be “contagious” as other cities aim to solve their housing crises. “We’ve seen this with other policies,” he said. “I’d assume this one could follow.”
While the final impact of Local Law 18 has yet to be seen — some experts predict hosts will find ways to keep listing short-term rentals illegally — Airbnb has offered some comfort to travelers with upcoming trips to the Big Apple.
Airbnb will honor existing reservations with check-in on or before Dec. 1. Airbnb told CNN and several other publications they would refund “fees associated with those stays after check-in to comply with STR regulations.” Local Law 18 bans booking platforms from processing transactions for unregistered listings.
Reservations with a check-in date on or after Dec. 2 will be canceled, and travelers will be refunded.