New York’s City de Facto Ban on Short-Term Rental / Airbnbs

Owning and operating a short-term rental, like those on Airbnb, has always had its challenges. One significant hurdle is the ever-changing legislative landscape which can shift the ground beneath hosts’ feet. Many New York City hosts recently felt this uncertainty when thousands of Airbnb listings began disappearing in response to stringent city mandates. This is after Airbnb sued and lost to New York City over short-term rental restrictions.

From September 5, the city plans rigorous enforcement of short-term rental rules. Hosts can only continue operations if they meet a series of requirements — including being present during the guest’s stay and not renting out the entire property, even if they own it. The new law doesn’t just target hosts. Booking platforms that process payments for unregistered listings face penalties.

While guests in non-registered properties won’t face penalties, hosts could be fined between $100 to $5,000 based on the nature of the violation. It's impossible for average New Yorkers to completely comprehend and adhere to the city’s complex laws and codes related to zoning, multiple dwellings, housing maintenance, and construction. New York City Mayor’s Office of Special Enforcement (OSE) hasn’t even highlighted which specific provisions apply to city residents.

Many have criticized the city’s rules as excessive, especially concerning the prohibition on bedroom door locks. It certainly doesn't make sense to me. Furthermore, given that hosts are now required to be present during a guest’s visit, they cannot rent out their property while on holiday.

Airbnb has described the new rules as a “de facto ban on short-term rentals.” Many hosts feel cornered, with some pondering whether they can sustain living in their homes without the supplementary income from rentals. Many will have to leave their home.

Behind this crackdown is a long-standing tussle between Airbnb and New York City. While many city residents and officials believe stricter rental rules would address the housing affordability crisis, hosts and Airbnb challenge this narrative. They argue that these rules hit hardest those who depend on the extra earnings to make ends meet in the city.

This dynamic isn’t unique to New York either; other cities like Washington DC, Dallas, Philadelphia, and New Orleans have introduced their short-term rental restrictions, making New York’s decision a bellwether for the industry.

As these regulations reshape the short-term rental scene in New York City, both hosts, and guests find themselves navigating a transformed landscape. Only time will tell how these changes truly impact the industry, the hosts, and the city’s economy.