09/28/2023
New York City officials are expected to start enforcing strict new regulations that limit residents’ ability to rent out homes through platforms like Airbnb.
The move is expected to lead to the removal of thousands of listings from the platforms. It is the latest and potentially most consequential development in the yearslong feud between big cities and the home-sharing companies.
The city argues that the proliferation of short-term rentals through Airbnb and other platforms has pushed up rents and helped fuel New York City’s housing shortage.
Airbnb has said the new rules amount to a “de facto ban” on the platform, and other critics say the city is bending to the lobbying of the hotel industry and locking out cheaper options for visitors.
What are the new regulations?
For years, the city has maintained that existing laws preclude people from renting out homes to guests for less than 30 days, unless the host is present during the stay. The city also asserts that no more than two guests are allowed to stay at a time, and that they must have ready access to the entire home.
But there continue to be numerous listings for rentals of whole apartments and homes, and the city has argued companies like Airbnb are not policing their platforms aggressively enough to root out violators.
A city official claimed in a July court filing that more than half of Airbnb’s $85 million net revenue in 2022 from short-term rentals in New York City came from activity that is illegal. Airbnb disputes the figure.
The new regulations, which the city will begin enforcing on Tuesday after a series of court challenges, require hosts to register with the city to be allowed to rent on a short-term basis.
In order to collect fees associated with the short-term stays, Airbnb, Vrbo, Booking.com and other companies must check that a host’s registration application has been approved.
Starting Tuesday, hosts who violate the rules could face fines of up to $5,000 for repeat offenders, and platforms could be fined up to $1,500 for transactions involving illegal rentals.
Why restrict short-term rentals?
City officials estimated there were roughly 10,800 Airbnb listings as of March 2023 that were illegal short-term rentals. They have argued that renting those homes to tourists and visitors instead of New Yorkers exacerbates the city’s acute housing shortage and makes it even more expensive to live here.
Residents who live in buildings with short-term rentals have complained that transient guests bring a greater risk of crime, excessive noise and cleanliness problems.
Christian Klossner, the executive director of the Mayor’s Office of Special Enforcement, said the new rules would create a “clear path for hosts who follow the city’s longstanding laws.”
There is also the influence of the hotel industry, a competitor of platforms like Airbnb. The Hotel Trades Council, a powerful force in local politics and ally of Mayor Eric Adams, has long fought the expansion of the platforms.
What is the argument in favor of short-term rentals?
Airbnb says short-term home rentals help the city’s tourism economy, especially in parts of the city where there are few hotels.
The company has fought the new rules in court, arguing that city code should allow “unhosted” rentals in some one- and two-family homes, and that New York City’s interpretation of its own laws is “unreasonable.”
Airbnb has also contended that the registration system is unnecessarily complex. Its lawsuit was dismissed last month.
“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,” said Theo Yedinsky, Global Policy Director for Airbnb.
What will happen starting Tuesday?
There will be far fewer Airbnb listings available.
Any short-term rentals through platforms like Airbnb for units that are not classified as “hotels,” and have not been registered with the city, will probably no longer be available. Airbnb said some listings would be automatically converted to long-term rentals and others would be deactivated.
Airbnb estimated last month that there were nearly 15,000 hosts that have active listings for short-term rentals in homes across the city. As of Aug. 28, the city had received about 3,250 registration applications. Only 257 had been approved.
Airbnb said that since mid-August, it has prevented people from booking short-term reservations in New York City for after Sept. 5.
Neither Airbnb nor the city could provide updated data on the number of listings expected to be taken down.
AirDNA, a rental analytics company, estimated that of the roughly 13,500 active listings for entire apartments and homes on Airbnb as of July, about 6,000 appeared to be for units classified as hotels or offered long-term rentals, leaving about 7,500 listings that could be affected by the new rules.
Will my booking get canceled?
If you have booked an Airbnb for less than 30 days after Tuesday, a few things could happen.
If the stay involves a check-in before Dec. 1, the reservation will not be canceled.
But reservations for after Dec. 2 will be canceled and refunded, according to the company. Airbnb did not say how many such reservations there were.
The city said it would not remove guests from illegal short-term rentals unless there were health or safety hazards in the apartment.
On Tuesday, the city will start enforcing strict new rules on how and when New Yorkers can rent out homes using platforms like Airbnb and Vrbo.
