New York City has begun to enforce a law mandating that short-term housing rentals through businesses such as Airbnb are registered, but residents trying to sign up say they face open-ended delays.
The law restricts residents from renting their apartments for 30 days or less in addition to registering with the city. There can only be two guests in each Airbnb with the requirement of the owner being present for the duration of their stay.
This could mean lost income for some who previously rented their homes, such as studio or one-bedroom apartment dwellers whose properties might be too small to accommodate both the resident and an out-of-town guest.
One Midtown Airbnb owner, who spoke on condition of anonymity to avoid his Airbnb service being shut down, said he opposes the law that went into effect Sept. 5 because he has relied on rental income to make ends meet amid inflation.
“The new Airbnb law is a total disaster and makes zero sense,” he said. “In the past two years, my rent has increased by $400 and this is because greedy landowners do whatever they like.”
The owner has lived in New York for 10 years and began offering his loft-style apartment on Airbnb a few years ago, opening it for a maximum of two guests.
Most Airbnb owners rely on the platform for income, earning about $19 per hour paycheck. It’s money that can help keep up with the city’s rising prices. According to Salary.com, living expenses have jumped 1.6% in 2023with housing, transportation, and food climbing the most. Those who stay in Airbnb accommodations benefit too: a week-long stay is 32% cheaper than just one night in a hotel, according to Nerd Wallet.
The number of Airbnb registration applications pending before the city Office of Special Enforcement has doubled since the law took hold on Sept. 5. The office’s website now says it can’t estimate how long it will take to process them, warning people to expect wait times given the sudden increase in applications.
Owners who defy the law could face fines of $5,000 while booking services could be fined even more and are now required to ban unregistered listings
On June 1, Airbnb sued the city in the state court of Manhattan, saying the new law is “implementing its most extreme and oppressive regulatory scheme yet, which operates as a de facto ban against short-term rentals in New York City.”
A judge ruled against the company in August, allowing the new regulations to take effect.
Mayor Eric Adam’s office said the law is meant to keep more housing available for local residents. That’s particularly important because the city’s homelessness rate is at its highest since The Great Depression, according to the Coalition for the Homeless.
Advocates of the new law say it may push some short-term rentals back into the regular housing market and ease rental prices for full-time occupants overall.
The new law is good news for the hotel industry, which has struggled to compete with Airbnb’s typically cheaper prices.
Nicolas Graf, associate dean and chair of the Johnathan M. Tisch Center of Hospitality at New York University, thinks this law makes the battle between Airbnb and hotels “fair.”
“When you are in competition with someone for the same customer, you have to somehow be able to compete within the same framework and that was not the case prior,” Graf said. “If you want to compete in the leisure and business tourism space and offer accommodations, you have to follow the same rules.”
The hotel industry will have to be patient for the benefits to materialize. Vijay Dandapani, president and CEO of the Hotel Association of New York City, doesn’t want to jump to conclusions about the possible effects of the law.
“The point to remember is that hotel occupancy is still below 2019,” Dandapani said. “We are behind.”
Now, most Airbnb listings are serviced by commercial operators or use the service as advertising for hotels.