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May 8, 2024
(Updated on
Sep 12, 2023
)

NYC's New Short-Term Rental Law: Impact on Airbnb, Vrbo, and More

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Image Credit: forbes.com 

Travellers from all over the world have always been drawn to the vibrant city of New York for its breathtaking skyline, rich cultural offerings, and seemingly endless number of attractions. Recent years have seen an increase in the variety of lodging alternatives available to tourists thanks to websites like Airbnb and Vrbo. On September 5, 2023, however, a new regulation went into effect that is changing the rules for short-term rentals in the city and posing significant difficulties for both landlords and tenants. The dynamic fabric of New York City's lodging options is experiencing a substantial upheaval as city officials tighten down on short-term rentals, triggering discussions about the effect on tourism, housing availability, and the future of the sharing economy in urban centres. This watershed moment in New York City's regulation of short-term rentals reflects a global trend in which cities are rethinking how to govern this dynamic sector.

The Genesis of Local Law 18

In January 2022, New York City approved Local Law 18, which significantly altered the way the city dealt with vacation rentals. The bill, which has been in the works for almost a decade, places tough restrictions on short-term rentals in an effort to address a variety of issues, such as housing shortages, noise disturbances, and safety concerns.

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Short-term rental hosts in New York City must now comply with Local Law 18, which mandates that they register with the Mayor's Office of Special Enforcement (OSE). This is a major policy shift for the city in terms of how it regulates sharing economies like Airbnb and Vrbo. To be in compliance with this requirement, hosts must provide specific information to the OSE, reiterating their intent to comply with all applicable local regulations pertaining to short-term rentals. This action demonstrates the city's commitment to resolving housing market and quality of life challenges without stifling the sharing economy. By signing up, hosts show they are committed to operating legally within the parameters of New York City's hotel business. (Source: New York City Official Website). 

Key Provisions of Local Law 18

Host Registration

Perhaps the most pivotal aspect of the law is the requirement for all short-term rental hosts to register with the city. Hosts must provide detailed information and adhere to strict criteria, including residing in the property they are renting.

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Maximum Stay Duration

Property owners can no longer rent out their homes for more than 30 days. Whether or not the host owns the property or even resides there, this rule still stands. This clause was drafted in reaction to fears of a shortage of accommodation in the city and the possible transformation of private residences into hotels. The law's intention is to safeguard the housing market's accessibility for people who make New York City their permanent home by limiting short-term rentals to a maximum of 30 days and addressing affordability concerns.

Host Presence

Having a host physically present on the premises during a guest's stay is required by law. When complete units are rented out without the host's oversight, noise disturbances and other problems can emerge. Additionally, hosts are now up against the problem of not being able to rent out their residences while they are away on vacation or for the weekend. This law's provision has had a significant negative impact on those who rely on short-term rentals to supplement their income while travelling for work or pleasure. It draws attention to the city's move toward a more regulated and monitored short-term rental scene, in which hosts are required to be present in the house during their guests' stay to ensure that New York's housing stock stays largely residential rather than commercial.

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Maximum Guest Limit

The number of guests that can stay at a home that is rented out on a short-term basis is limited to two people by Local Law 18, which adds an additional degree of control to minimize overcrowding and safety issues. The purpose of this restriction is to find a middle ground between catering to the needs of tourists and preserving the security and convenience of those who live in multifamily dwellings. The restriction to two guests is meant to act as a deterrent to any potential disturbances that larger gatherings might cause.

Implications for Airbnb, Vrbo, and Hosts

The enforcement of Local Law 18 has significant implications for Airbnb, Vrbo, and the hosts who rely on these platforms for income:

Airbnb's Response

It will be difficult for Airbnb, which has been vocal in its opposition to the law, to adjust to the new rules. The corporation has viewed the law as a "de facto ban" on its operations in the city. Airbnb has filed lawsuits and fought in court to prevent the rule from being enforced, but their efforts have been unsuccessful thus far.

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Image Credit: reuters.com

Hosts' Predicament

New York City's thousands of hosts whose livelihoods depend on short-term rentals must reconsider their strategies. These rentals can be very lucrative for hosts, who can earn more each month than they would with a more traditional long-term tenant. In light of the new rules, some owners of short-term rentals may look into exit plans. This could entail things like offering their houses for longer stays or looking into legal loopholes within the bounds of the law in order to comply with the new regulations. Others, seeking stability and conformity with city requirements, may switch to long-term rentals. If the new regulations make short-term rentals unprofitable or if they simply wish to get out of the industry, some hosts may consider selling their premises. Both the hosts and the city's housing market and supply will feel the effects of these choices.

Impact on NYC's Tourism

New York City's tourism industry may feel the effects of the new regulations. There could be a drop in tourism if tourists using Airbnb and similar sites find fewer available rooms. They say the rules make it seem like tourists aren't welcome in the city.

newyork
Image Credit: theguardian.com

Looking Beyond NYC

It's not just New York City that's struggling with the problems that come with vacation rentals and other short-term housing options. Cities all around the world are implementing a wide variety of strategies in order to manage this rapidly expanding business. Municipalities are attempting to strike a balance between the needs of residents, visitors, and those who rent out their homes on a short-term basis by enacting laws as stringent as those in San Francisco and Amsterdam. These global efforts are a reflection of the growing need for cities to find a careful balance between ensuring that short-term rentals positively contribute to local economies while also safeguarding housing availability for inhabitants and keeping neighbourhoods safe. For cities all over the world, finding a way to achieve this balance in an era of increasing urbanization and shifting travel patterns continues to be difficult.

New York City's Local Law 18 represents a significant shift in how the city regulates short-term rentals, impacting platforms like Airbnb and Vrbo as well as hosts and tourists. While the law aims to address pressing concerns, its implementation has sparked debates about its impact on the city's tourism industry and the livelihoods of hosts. As the short-term rental landscape continues to evolve, it remains to be seen how other cities will respond to similar challenges and whether alternative solutions can strike a balance between economic opportunities and housing concerns.

Updated on September 12th, 2023

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According to Inside Airbnb, the implementation of a new law in New York City has resulted in a significant drop of about 70 percent in short-term Airbnb listings. Between August 4 and September 5, approximately 15,000 listings vanished as a result of this enforcement. However, it appears that some listings have transitioned to long-term rentals. These long-term rentals have experienced a significant increase of approximately 11,000 listings, bringing the total to 32,612. It's worth noting that these long-term rentals are not required to be registered under the new law. It seems like the shift in rental options could be a result of the law encouraging hosts to provide accommodations for longer stays, typically lasting 30 days or more. The law is designed to enforce existing regulations on short-term rentals and tackle housing problems in the city. However, it can be difficult to determine which listings on Airbnb are registered. Out of all the listings, only 28 short-term rentals have mentioned having a city registration number. However, it is uncertain whether these numbers are actually legitimate. Thousands of people have applied to register in New York City, but only a small number of them have been approved. Airbnb has recently implemented a policy to prevent new short-term reservations for unregistered rentals. However, it seems that there are still some listings on the platform that are potentially violating the law. Airbnb and small landlords have opposed the new law, which could have implications for other tourist cities dealing with similar short-term rental problems. The city is currently in the process of implementing its verification system, and officials are collaborating with platforms to make sure everyone follows the rules. Travellers who book short-term rentals are currently facing a lot of uncertainty. They are unsure whether the apartment they are staying in is legally registered or if it bypasses city regulations.

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