On Tuesday, New York City officials are expected to begin enforcing strict new regulations that limit residents’ ability to rent 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 perhaps most significant development in the years-long struggle between major cities and home-sharing companies.
The city says the proliferation of short-term rentals through Airbnb and other platforms has pushed up rents and helped fuel the housing shortage in New York City.
Airbnb has said the new rules amount to a “virtual ban” on the platform, and other critics say the city is bowing to pressure from the hotel industry and shutting down cheaper options for visitors.
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 stresses that no more than two guests are allowed to stay at the same time, and they must have easy access to the entire house.
But there are still many rental listings for apartments and entire homes, and the city said companies like Airbnb don’t police their platforms aggressively enough to root out offenders.
A city official claimed in a lawsuit in July that more than half of Airbnb’s net revenue of $85 million in 2022 from short-term rentals in New York City came from illegal activity. Airbnb disputes this number.
The new regulations, which the city will begin implementing Tuesday after a series of court challenges, require hosts to register with the city to allow them to rent on a short-term basis.
In order to collect fees associated with short-term stays, Airbnb, VRBO, Booking.com, and other companies must verify that the host 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 rental.
Why restrict short term rentals?
City officials estimated that there were approximately 10,800 Airbnb listings as of March 2023 that were illegal short-term rentals. Renting those homes out to tourists and visitors rather than New Yorkers, they argued, exacerbates the city’s severe housing shortage and makes it more expensive to live here.
Residents who live in buildings with short-term rentals have complained that transient guests present a greater risk of crime, excessive noise and hygiene problems.
Christian Klausner, executive director of the Mayor’s Office of Special Enforcement, said the new rules will create a “clear path for hosts who follow old city ordinances.”
There is also the impact of the hotel industry, which is competing with platforms like Airbnb. The Hotel Trade Board, a powerful force in local politics and an ally of Mayor Eric Adams, has long fought platform expansion.
What is the argument in favor of short term rentals?
Airbnb says that short-term home rentals help the city’s tourism economy, especially in parts of the city where there are few hotels.
The company has opposed the new rules in court, arguing that city law should allow “non-hosted” rentals in some one- and two-family homes, and that New York City’s interpretation of its laws is “unreasonable.”
Airbnb also emphasized that the registration system is unnecessarily complex. The lawsuit was dismissed last month.
“The city is sending a clear message to the millions of potential visitors who will now have fewer accommodation options when they visit New York City: You are not welcome,” said Theo Yedinsky, director of global policy for Airbnb.
What will happen starting on Tuesday?
There will be far fewer Airbnb listings available.
It is possible that any short-term rentals through platforms such as Airbnb for units that are not classified as “hotels”, and are not registered with the city, will 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 were nearly 15,000 hosts with active listings for short-term rentals in homes across the city. As of August 28, the city had received about 3,250 registration applications. Only 257 were approved.
Airbnb said it has prevented people since mid-August from taking short-term reservations in New York City after Sept. 5.
Neither Airbnb nor the City has been able to provide updated data on the number of listings expected to be removed.
AirDNA, a rental analysis company, has estimated that of the approximately 13,500 active listings for apartments and entire homes on Airbnb as of July, about 6,000 appear to be for units classified as hotels or offered for long-term rentals, leaving about 7,500 listings that could be affected by the new rules.
Will my reservation be cancelled?
If you’ve booked an Airbnb for less than 30 days after Tuesday, a few things might happen.
If the stay includes check-in before December 1, the reservation will not be cancelled.
But reservations made after December 2 will be canceled and refunded, according to the company. Airbnb did not say how many of these reservations exist.
The city said it will not remove guests from illegal short-term rentals unless there are health or safety risks in the apartment.
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