The End of Airbnb in New York

Countless Airbnb accommodations and transient rentals are on the verge of disappearing from the New York City scene.

The legislation known as Local Law 18 has recently taken effect, imposing severe restrictions on Airbnb's operations within the city. In fact, it virtually eliminates the possibility of using Airbnb for numerous hosts and guests. As of now, all hosts in New York who engage in short-term rentals must complete a registration process with the city. Moreover, only those who reside in the property they are renting and are physically present during their guests' stay are eligible. Additionally, the number of guests per rental is limited to a maximum of two individuals.

The era of stylish city dwellings designed for bachelor celebrations, snug homes with two or three bedrooms close to museums for families, and even the freedom for individuals to lease their apartments during weekends when they are absent has come to an end. Although Airbnb, Vrbo, and similar platforms can still function in New York, the freshly imposed regulations are so stringent that Airbnb perceives them as an "implicit prohibition" on its operations.

Temporary accommodations can result in disturbances, litter, and hazards, and they can make it unaffordable for locals to reside in their own communities. Numerous property owners in New York City have an extensive array of Airbnb listings. However, some individuals residing in the city also utilize Airbnb as a means to make financial ends meet, either by renting out their homes while they are away or by offering a portion of their duplex to aid in offsetting their mortgage expenses.

Airbnb is a hit among numerous tourists, accounting for 66 million individuals per year, who seek affordable accommodations that often surpass the size of typical hotels. In the year 2022 alone, short-term rental offerings in New York City generated a remarkable $85 million in revenue. Although the city may constitute a relatively insignificant portion of Airbnb's global market, the recent regulations demonstrate how local authorities possess the capability to swiftly eradicate short-term rentals and mitigate their effect on densely populated residential zones. Moreover, New York City is merely one example of numerous urban centers across the globe striving to regulate the frenzy surrounding short-term rentals.

In various places, diverse strategies are being adopted. Dallas, for instance, has decided to confine short-term rentals to particular neighborhoods to prevent unruly and hazardous gatherings. On the other hand, the Canadian province of Quebec and Memphis, Tennessee, along with other locations, have recently implemented the requirement of obtaining licenses for short-term rentals. In San Francisco, the duration for which someone can offer their entire residence for rent through Airbnb is restricted to 90 days annually; Amsterdam sets this limit at 30 nights per year, while Paris allows up to 120 days. Berlin had initially prohibited almost all Airbnbs but later reversed this decision in 2018.

Airbnb's efforts to combat the recent legislation have thus far proven fruitless. In June, the company took legal action against New York City, but in August, a judge rejected their case, asserting that the limitations were "completely reasonable." Airbnb has refrained from commenting on whether they will contest the ruling. Hosts are also actively advocating for the ability to advertise their apartments as temporary lodging, having discussions with city authorities in hopes of amending the law.

According to Theo Yedinsky, Airbnb's global policy director, the new regulations are a negative impact on the tourism industry and the people of New York City who depend on home sharing and tourism revenue to survive. He states that the city's actions are conveying a message to potential tourists that they are not wanted anymore, as there will be less available accommodation options. Yedinsky expressed Airbnb's desire to collaborate with the city in establishing reasonable regulations for home sharing, but did not provide further details on their future actions.

According to Sean Hennessey, an expert from the Jonathan M. Tisch Center of Hospitality at New York University, this alteration will significantly diminish the appeal of short-term rentals for numerous individuals visiting New York. Furthermore, in a city renowned for its costly and cramped hotel accommodations, this amendment may lead to a decrease in the accessibility of the city.

According to Inside Airbnb, a website that tracks listings on the platform, there are currently over 40,000 Airbnbs in New York. Out of these, 22,434 are considered short-term rentals, meaning they can be booked for less than 30 days. The majority of these rentals are located in downtown Manhattan, the Upper East Side, Williamsburg, and Park Slope in Brooklyn. Even though the number of rentals may seem small compared to the city's population of 8 million, Murray Cox, the founder of Inside Airbnb, argues that some desirable neighborhoods are being overwhelmed by short-term rentals, leading to housing shortages and higher rents. The new law, in theory, aims to make these properties available to local residents. New York City is currently dealing with a housing shortage, which has resulted in increased rents and homelessness rates.

The execution of the legislation demonstrates "obviously you can decrease the number of temporary rentals," declares Cox, who was involved in the Alliance Against Unlawful Hotels, an organization that pushed for the enactment of the registration requirement. "You can hold these platforms responsible."

There is an old law in New York that prohibits the renting of entire apartments for less than 30 days. However, it has been challenging to enforce this law without the registration requirement, which will be implemented on Tuesday. In addition to this, there is another part of the new law that allows landlords to prohibit short-term rentals on entire buildings. Currently, there are almost 9,000 buildings in New York City that are included in this ban. It's important to note that certain entire apartments on rental platforms, which are designated as hotels or boarding houses, are exempt from New York's short-term rental laws. Therefore, there will still be some whole units available for rent on these platforms.

Certain hosts who only have a few properties to offer feel that the regulations unfairly group them together with professional landlords. Margenett Moore-Roberts is one of these hosts. She rents out a two-bedroom apartment in her brownstone in Brooklyn. She and her husband and teenage daughter live in the other unit of the same house. Margenett doesn't want to become a full-time landlord and lose the flexibility of being able to accommodate family and friends in the apartment. During the pandemic, she also used it as a home office. However, because her family doesn't occupy the second two-bedroom unit, she can no longer list it on Airbnb for stays shorter than 30 days.

A coalition called Restore Homeowner Autonomy and Rights, comprising of homeowners residing in New York, is championing for changes to the rules that would grant the freedom to owners of single- and double-family homes to officially register their properties with the city, and remove any restrictions on occupancy. They argue that individuals like Moore-Roberts should have the opportunity to lease their units, asserting that they should not be classified under the same category as larger-scale landlords.

According to Moore-Roberts, she is not completely opposed to the rule change. However, she believes that the law should be revised in a more subtle way to safeguard tenants who own only one property, such as herself. Moore-Roberts suggests that instead of employing a heavy-handed approach, a more precise and targeted strategy would be more appropriate. Currently unemployed, Moore-Roberts adds that a decrease in income resulting from the decline in short-term rentals adds to her financial strain. She expresses her dissatisfaction with the fact that everyone is being grouped together without considering individual circumstances, which she believes is unjust and unbeneficial.

According to Airbnb, starting from December 2, they will be terminating and reimbursing bookings made in unregistered lodgings. However, reservations made prior to December 1 will still be honored in order to minimize the negative consequences for both hosts and guests. Guests will not face any penalties for booking and staying in an unregistered rental, but hosts and the platforms they use for advertising may face consequences starting from September 5.

According to Airbnb, they claimed to have blocked unregistered stays from making future bookings after September 5 starting from August 14. However, when we conducted a search, we found numerous fully furnished apartments for more than two individuals that were still available for booking beyond September 5. These listings do not meet New York's criteria for short-term rental registration. Airbnb did not provide any clarification on why these listings are still present on their platform. Vrbo chose not to comment on this matter, and Booking.com did not respond to our request for a comment.

According to Christian Klossner, the head of the Office of Special Enforcement in New York City, a total of 3,250 hosts offering short-term rentals have applied for registration by August 28. Out of these, more than 800 applications have been evaluated. The office has approved 257 registrations, sent 479 back for more information or corrections, and rejected 72. Starting from Tuesday, the office's priority will be collaborating with booking platforms to ensure that they are utilizing the registration verification system and not accepting unverified transactions, as highlighted by Klossner.

Despite an increasing amount of cities attempting to restrict Airbnb rentals, the company remains on an upward trajectory. In the second quarter of 2023, it generated $2.5 billion in revenue, marking an 18 percent rise from the previous year. Moreover, the platform experienced an 11 percent growth in the number of nights and experiences booked during this period.