New York City officials on Tuesday are expected to begin implementing strict new regulations limiting 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’s the latest and potentially most needed development in the years-long feud between big cities and home-sharing companies.
The city argues that the rise of short-term rentals through Airbnb and other platforms has driven up rents and helped ease New York City’s housing shortage.
Airbnb said the new rules amounted to a “de facto ban” on the platform, and other critics said the city bowed to lobbying by the hotel industry and locked out cheaper options for those guest
What are the new regulations?
For years, the city has maintained that existing laws prevent people from renting homes to guests for less than 30 days, unless the host is present during the stay. The city also insists 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 many listings for whole apartment and house rentals, and the city has argued with companies like Airbnb that they are not policing their platforms aggressively enough to weed out violators.
A city official claimed in a July court filing that more than half of Airbnb’s $85 million in 2022 net revenue from short-term rentals in New York City came from illegal activity. 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.
To collect fees related to short-term stays, Airbnb, Vrbo, Booking.com and other companies must check whether 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 are short-term rentals restricted?
City officials estimate there were about 10,800 Airbnb listings as of March 2023 that were illegal short-term rentals. They argued that renting those homes to tourists and visitors instead of New Yorkers was exacerbating the city’s acute housing shortage and making it more expensive to live here.
Residents living in short-term rental buildings have complained that temporary visitors pose a greater risk of crime, excessive noise and sanitation 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 to comply with the city’s long-standing law.”
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 an 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 hotels are scarce.
The company fought the new rules in court, arguing that city code should allow “unhosted” rentals in some one- and two-family homes, and New York City’s interpretation of its own rules. law is “unreasonable.”
Airbnb also argued that the registration system was unnecessarily complicated. Its lawsuit was dismissed last month.
“The city is sending a clear message to the millions of potential visitors who will now have fewer lodging options when they visit New York City: you are not welcome,” said Theo Yedinsky, Global Policy Director for Airbnb.
What will happen from Tuesday?
There will be fewer Airbnb listings available.
Any short-term rentals through platforms like Airbnb for units not classified as “hotels,” and not yet registered with the city, will likely no longer be available. Airbnb said some listings will automatically convert to long-term rentals and others will be deactivated.
Airbnb estimated last month that there are nearly 15,000 hosts with active listings for short-term rental homes across the city. As of August 28, the city has received approximately 3,250 registration applications. Only 257 were approved.
Airbnb said that since mid-August, it has prevented people from booking short-term reservations in New York City after September 5.
Neither Airbnb nor the city could provide updated data on the number of listings expected to be removed.
AirDNA, a rental analytics company, estimated that of the roughly 13,500 active listings for entire apartments and houses on Airbnb in July, about 6,000 appeared to be for units classified as hotels or offers long-term rentals, leaving about 7,500 listings that could be affected by the new rules.
Can my booking be cancelled?
If you booked an Airbnb less than 30 days after Tuesday, a few things can happen.
If the stay includes a check-in before December 1, the reservation will not be canceled.
But reservations for after December 2 will be canceled and refunded, according to the company. Airbnb did not say how many reservations it had.
The city says it won’t remove guests from illegal short-term rentals unless there are health or safety risks in the apartment.