Do New Airbnb Restrictions Mean the End of Vacation Rentals in New York City?
For some visitors, short-term rentals provide a way to access neighborhoods and pricing they can’t access otherwise with hotel stays. But residents complain about a depleting affordable housing supply.
On September 5, the vacation rental market was vastly altered in New York City. New regulations went into effect that limit homeowners’ ability to rent out their homes through online platforms like Airbnb and Vrbo. A quick search on Airbnb makes the new reality painfully obvious: Just 487 full homes are listed across the entire city for a set of random dates in October. In March 2023, city officials estimated there were about 10,800 Airbnb listings that were actually illegal short-term rentals. Most of those have now vanished from the site.
What exactly are the new short-term rental regulations in New York City?
Prior to September 5, New York City had existing laws on the books that prohibited people from renting out their apartments for less than 30 days (considered “short-term rentals”) if they weren’t present during the stay and the guests needed to access the entire home without them being there. Also not allowed? Renting out a space to more than two guests at a time. But up until this month, there was little to no enforcement of these laws. Now, the city is cracking down—to the tune of up to $5,000 in fines.
The only way around the newly enforced regulations, which withstood a series of court challenges by Airbnb to finally be enacted on September 5, is for hosts to register with the city in order to be allowed to rent on a short-term basis—and they must meet a laundry list of stringent criteria to be approved. In turn, vacation rental booking platforms, which include Airbnb, Vrbo, and Booking.com, can only collect their fees from hosts after they check that a host has registered and has been approved, or they, too, can be fined.
According to Airbnb, NYC’s regulations are an outlier and in contrast to other U.S. cities like San Diego and Seattle that have regulated short-term rentals in other, less severe ways. For example, Airbnb shares that in Los Angeles and San Francisco, un-hosted stays (where homeowners can rent their home when they’re away) are allowed.
So can you still book a vacation rental in New York City now, or not?
For now, Airbnb is not canceling any bookings under 30 days scheduled to take place between now and December 1. Any reservations made for after December 2 will be canceled and refunded, says Airbnb. Airbnb has shared information with hosts about how to comply with the new rules.
The city has said it would not physically remove any guests from a short-term rental unless there is a health or safety hazard. Still, it’s prudent to check with your host if you have a booking that is less than 30 days to see if they were approved for registration to avoid any last-minute cancellations or surprises.
Tourists visiting New York City are already seeing the drastic reduction in affordable short-term rentals. And many would-be visitors say they can’t afford often-high hotel prices—and that sometimes a hotel isn’t the right fit.
“We lived in the city for years and I wanted to take my family to visit this fall, but hotels are not great with little kids—home rentals are a real lifesaver for families and people with pets—and we like to stay in the Brooklyn neighborhoods that we know and love, which don’t have many hotel options anyway,” says Freda Moon, who now lives on the West Coast.
Will this deter would-be tourists from visiting NYC? It’s too soon to know, of course, but Airbnb argues that short-term home rentals are needed to boost the city’s tourism economy, which has suffered since the pandemic. The company says vacation rentals bring in a different type of guest than hotels can—the average daily rate of Airbnb listings in New York City areas with no hotels were approximately 30 percent cheaper than in areas with hotels, the company reports.
Why is New York City restricting short-term rentals?
Numerous cities have long been at odds with Airbnb and other short-term rental platforms, including New Orleans and Barcelona, but this is the latest—and largest—victory for a municipality. New York City’s main argument has been that renting these homes to tourists and visitors reduces the city’s already suffering housing stock, making it even more expensive to live there.
Additionally, New Yorkers who live in buildings with short-term rentals in them have lodged complaints about transient guests causing issues ranging from cleanliness to noise to crime.
“I’m so relieved to see Airbnb go,” says Sarah Rose, who lives in the Hell’s Kitchen neighborhood of Manhattan. “In a city with a housing shortage, it deprived residents of desperately needed inventory.”
Shubha Bala, a resident living in the Crown Heights neighborhood of Brooklyn, agrees. Bala is concerned about low-income and minority residents losing their homes. “When I saw the map of how concentrated Airbnbs were in BedStuy—a historically Black neighborhood—and the stories of how most of those Airbnbs were obtained through grossly underpaying longtime Black residents, and then passing the ownership of buildings from corporation to corporation until they finally got sold a couple of years later for about five times the original selling price, I realized that my non-Black inconvenience [of not being able to find an Airbnb for visiting relatives] isn’t worth the vast eviction of Black families.”
Separately, there’s also the issue of the influence of the hotel industry, an obvious rival of vacation rental platforms, that should be factored into the equation. For example, the Hotel and Gaming Trades Council, the union that represents hotel workers in the New York City metropolitan area, in the Capital Region of New York State, and in New Jersey, in addition to nearly 40,000 non-managerial employees, has long fought short-term rental platforms and has close ties with Mayor Eric Adams. The council even commissioned a study back in 2018 to show that these platforms negatively affected NYC’s housing stock. But while the hotel sector stands to benefit, the fact that there are housing issues in the city still stands.
Is there a downside to limiting short-term rentals?
For its part, Airbnb says it has spent the better half of the last decade trying to work with the city to advocate for clear and effective short-term rental rules. In court, Airbnb argued that the city should allow “un-hosted” rentals in some one- and two-family homes, and contended that the process to get approved to host short-term rentals is overly complex. The company says short-term rentals bring much-needed tourism dollars to the city, and provide options for people looking to stay outside of Manhattan, with hotels in many outer borough-neighborhoods almost nonexistent.
According to Airbnb, fewer than half of total Airbnb New York City listings are in Manhattan, with Brooklyn and Queens home to 37 percent and 1 percent of Airbnb listings, respectively.
While it’s too early to know what will happen with the city’s housing market following this new enforcement action, Airbnb argues that limiting short-term rentals is not the solution.
Airbnb cites a report from Boston University professor Michael Salinger that found that enacting what the report referred to as a “de facto ban” on short-term rentals in New York City will do little to alleviate the city’s housing affordability crisis. According to Airbnb, this is because more than 80 percent of the Airbnb listings in NYC could generate more earnings if rented on a long-term basis, which implies hosts presumably have other reasons for not renting out their homes on a long-term basis. Discouraging hosts from offering their units on a short-term basis is unlikely to make them add their units to the supply of permanent housing, says Airbnb.
Former Airbnb host of six years Aitan Weinberg says he tried to register back in June, was confused by the process, and didn’t hear back for months. Only after he followed up was he summarily rejected, even though he owns a two-family home in Prospect Heights, Brooklyn, and is on-site when he hosts guests in the garden apartment of his townhouse. He says he’s had no issues with unruly guests and mostly rents to visiting grandparents who have family in the neighborhood, where there are no hotels.
According to the New York Times, as of August 28, the city had gotten about 3,250 applications and only approved 257 of them.
“Our motivation for renting on Airbnb versus a full time rental, was that we have out-of-town parents, and so when our out-of-town family comes to visit, we wanted them to have a convenient place to stay,” explains Weinberg. “And so, we thought if we rented it out as a short-term rental, we’d have the flexibility for both.”
Additionally, the income he and his wife receive from hosting on Airbnb is significant. “This home was only affordable to us because we were expecting to rent out one of the units—we could have never afforded the ongoing monthly costs,” he says, adding that he was laid off from his job earlier this year and is currently unemployed.
Weinberg adds, “[The new regulations] couldn’t have come at a worse time to have less income. For us, we have enough of a cushion that even with the lost income, we’re not forced out of the house, but I imagine for other people, that’s not the case. And that’s terrible.”