Six months have passed since New York City all but banned short-term rentals like those offered via Airbnb. The policy was intended to free up apartments in America’s most congested city to become homes for long-term New Yorkers, instead of housing rotating out-of-town guests that bring noise, trash, and worse. So far, the law’s most noticeable effects seem to be sending droves of tourists to New Jersey and frustrating small-time Airbnb hosts.
New York City’s law immediately wiped out some 15,000 short-term rentals from Airbnb’s site when it was implemented in September, as the site automatically converted them to longer stays to remain compliant with the new rules. As of February, there are fewer than 5,000, according to Inside Airbnb, a housing advocacy group that scrapes Airbnb’s site for data.
Other cities are watching as New York and its anticipated 65 million tourists for 2024 navigate the new regulations. A recent search on Airbnb for places to stay for a weekend pulled up individual rooms in occupied apartments scattered across the city, hotel rooms, or entire apartments and homes in nearby New Jersey. There are some 35,000 New York City apartments listed on Airbnb for stays of 30 nights or more, according to AirDNA, a short-term rental intelligence firm, which are legal and do not require the short-term rental licenses. That suggests many apartments previously listed on Airbnb haven’t been converted into long-term leases for more permanent residents.
Brian Chesky, Airbnb’s CEO, has called New York a “cautionary tale” for cities looking to regulate short-term rentals. New York is one of many cities around the globe experimenting with ways to restrict short-term rentals, in response to the way Airbnb and other sites have changed the makeup of neighborhoods and brought tourists into previously purely residential areas. How New York’s ban fares is a test: If America’s biggest city can fix the problem, more may follow.
New York had long banned short-term rentals of entire apartments, but without last year’s law it lacked the teeth to enforce the measure. The change didn’t fully ban all short-term rentals, but it did usher in strict requirements to operate them. Among the rules: Hosts must live in and be present in the residence they want to rent and can only allow two guests to stay at a time. This effectively did away with sleek, luxury whole-apartment rentals owned by real estate investors, but also shut down people who may have made a little extra income renting out their apartment while out of town, or those who let separate apartments attached to the one where they live.
Many of these small-time hosts had no intent to become full-time landlords. Welcoming short-term renters was a way to avoid the responsibility of a 24/7 tenant or the risk of squatters. When the city touted the law as a way to open more homes and calculated these apartments into its vacancy estimates, it assumed wrong, says Tony Lindsay, president of the New York Homeowners Alliance Corp, a nonprofit that advocates for the rights of homeowners in the city.