- On September 5, New York City will begin enforcing a 2022 law restricting short-term rentals.
- An estimated 40,000 listings will need to adhere to the new rules, such as the presence of hosts on site.
- For some short-term hosts, that’s the end of the road. For others, it’s a huge opportunity.
Labor Day marks the end of summer, but this year it will also mark the end of the era of short-term rentals in New York City.
Starting September 5, the city will begin enforcing a 2022 law that requires hosts on Airbnb, Vrbo, and other short-term rental platforms to register in the city. Hosts will have to abide by new rules such as a ban on renting the entire unit, a requirement to stay in the unit with guests, and a two-person booking limit.
Failure to comply can result in fines of up to $5,000 per stay, but exceptions are made for certain buildings designated for temporary housing.
The new rules threaten to shut down thousands of short-term rentals and remap the types of apartments and homes used for primarily short-term rentals in New York City. For some hosts, this is the end of the road, while others see the disadvantage of competition as their biggest opportunity in a decade.
No one knows how many short-term rentals will close
It is not clear exactly how many short-term rentals there are in New York City. The location of the data within Airbnb It is estimated that there are 40,000 listings on Airbnb alone, while an economic study prepared by Airbnb by Boston University Professor Michael Salinger He estimates that number is closer to 36,000. Sure enough, that’s a lot, and that’s only for Airbnb. The law will affect listings on all short-term rental platforms.
the The Wall Street Journal reported The city itself believes there are as many as 10,800 illegal listings across all short-term rental platforms and is having a very difficult time trying to efficiently register legal hosts. As of August 28, only 257 permits have been approved by the New York City Bureau of Enforcement. According to the travel site Skift.
Analytics site AirDNA said they are monitoring 4,000 listings that they believe may be removed under the 2022 law. However, that pool accounts for more than 40% of the revenue earned in the five boroughs.
Airbnb declined to comment.
New York resembles dozens of cities and towns across the country cracking down on short-term rents, citing everything from unruly guests to shrinking housing stock. And in Philadelphia, the recent enforcement of the 2021 law threatens 85% of the city’s listings.
One reason for New York City’s crackdown is concern about how short-term rents are squeezing an already incredibly tight housing market.
“Our administration is determined to preserve affordable housing and cracking down on illegal short-term tenants is one way we will get there,” said New York City Mayor Eric Adams. he said at a news conference in July 2022.
One flight attendant feels “caught in this slow sweep” and fears for her future
Melissa, an Airbnb host in New York City whose last name is withheld for personal safety reasons, owns a three-unit townhouse in Ridgewood, Queens.
Melissa and her two school-age children live on the first floor of the building, a long-term tenant lives on the second floor, and Melissa rents the basement unit as an Airbnb. Sleeps up to four people for approximately $175 per night.
As a documentary filmmaker, the $3,000 to $5,000 per month in short-term rent has been crucial to her livelihood. In April, she was laid off from her full-time job at a media company, and said she could not live without her income from Airbnb.
“Since losing my job, I have been relying on that income as a single mom with two young children,” she told Insider. “I’m escalating a little bit.”
Under the new rules, Melissa is not sure she will be able to rent out her unit as she currently does. She finds the law overly confusing and restrictive, shutting down small hosts like herself at the cost of trying to get rid of hosts through entire corporations.
“I understand what they are trying to do, which is to try to get rid of the bad hosts who are taking a lot of housing off the market,” she said. “But a lot of short-term rental hosts are getting caught up in this slow sweep.”
Melissa said she has no plans to try to sign up for a license. Instead, she explores moving into mid-term rentals—stays between one month and a year—which are often booked by transient professionals such as traveling nurses, medical residents, filmmakers, and interns.
She said that medium-term leases are not profitable and are more prone to legal complications.
“Everyone just wants a place to live and fulfill in one of the most expensive cities in the country,” she added.
Other operators see a huge opportunity
Meanwhile, AKA the short-term leasing company sees an opportunity in the market. AKA CEO Larry Korman told Insider that he’s “hopeful to level the playing field” under the new law, as operators that previously helped Airbnb empires move out of apartments would cease to exist.
The AKA operates entire buildings for short-term rentals and will be allowed to operate under the city’s new rules. AKA Deals targets luxury travelers, with Bulgari soaps and state-of-the-art gym facilities.
The starting nightly rate for most AKA properties is around $450. Currently, the average daily price for New York City listings on Airbnb and Vrbo is $251, according to AirDNA.
Corman sees the potential decline in Airbnb’s housing inventory in the city as the right time, and niche opportunity for his company, as the generation of young first-time Airbnb users ages for high-end stays.
“A lot of these young kids who started with Airbnb 10 or 15 years ago, some of their tastes have evolved,” he said. He added that they may have once relied on Airbnb for low-cost travel as students, but “now they have jobs and a little money.”
With buildings outside Central Park, in Times Square and in New York’s NoMad neighborhood, Korman said most rooms for September and October are already booked, but all eyes are on winter bookings.
“I think this big uptick will be seen after the implementation goes into full effect,” he said, adding that he hopes the first quarter of 2024 will be a boom time for city hotels and hotel-like residences such as AKAs.
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