It’s a tale of two cities: the one we love to travel to and the other where we live. In the former, many opt to stay in an Airbnb, usually saving money and getting more of an experience of the town or city. In the other, where we live, Airbnb has reduced housing stock as owners and tenants rent units for profit. In a city with a tight housing market and rapidly declining affordable housing, this has become a major issue. There are also questions of safety and maintaining the residents’ desired quality of life — no loud parties, strangers in hallways and visitors who don’t respect the building.
To address this, the City Council passed the Short-Term Rental Registration Law, also known as Local Law 18. The law also applies to other sites such as Vrbo and booking.com.
Though the law was passed in January 2022, enforcement didn’t begin until Sept. 5, 2023, as Airbnb unsuccessfully challenged it in the courts and implementation needed activation.
The law established new regulations for those with short-term rentals:
• Only one or two guests are permitted regardless of the unit size. Short-term is defined as less than 30 days. Rentals of more than 30 days are not covered by the restrictions.
• The host must be physically present for the term of the rental. In effect, this means the exclusive use of entire units is no longer allowed in New York City.
• Hosts and visitors must leave the doors inside the dwelling unlocked, so occupants can access the entire unit. There are exceptions for bathrooms, bedrooms and private areas when in use.
Owners and tenants of units they want to rent must register with the city’s Office of Special Enforcement (OSE). The application costs $145. If the department approves the filing, it issues a registration number that will appear on the host’s online listing. Airbnb said listings without a registration number cannot accept new reservations.
Fines for hosts can range from $100 to $1,000 for a first violation. Guests do not incur penalties for staying at an illegal property.
Buildings can also opt out of permitting short-term rentals by filing with OSE.
Airbnb short-term listings have plunged according to a report in the New York Times. From August 2023, a month before the law went into effect, to March 2024, short-term listings plummeted 83% to 3,705 from 22,247. But these figures may be deceptive of the entire picture.
We are seeing owners and residents becoming more creative in listing apartments. There are more underground notices on social media instead of postings on Airbnb or similar sites. This is more prevalent in condominiums where many absentee owners offset costs and profit from short-term rentals.
In some buildings without a doorman, this has created unpleasant situations when a resident confronts someone on a short-term rental. In others, usually smaller buildings, this apparently has not been an issue.
In doorman buildings, we have instructed the doorman/concierge to ask for identification from strangers to see if they are going to a short-term rental.
William D. McCracken, a partner at law firm Moritt Hock & Hamroff LP, reported that most of the co-ops he represents welcome the legislation and have opted out of deciding to prevent short-term rentals.
“Condos also have the option of opting out under Local Law 18, but they should consult their by-laws to confirm that their board has the authority to prevent their unit-owners from entering into short-term rentals,” he said.
He also has noticed renters using alternative venues such as Craigslist and other sites more aggressively, though it is more difficult for prospective guests to find the listings. The situation is different, however, in rental buildings.
“We find that these buildings are not coming to us as attorneys to opt out,” he observed.
Other U.S. cities such as Dallas, Miami and Memphis have laws regulating short-term rentals; so, too, do numerous foreign cities such as Paris, Barcelona and Amsterdam.
While the law is praised by housing proponents, questions arise about the impact on the city’s economy, in particular the again-vibrant tourism industry. Hotel occupancy rates and prices have taken off since the Airbnb legislation and economists wonder if the higher prices to stay in New York will depress tourism.
Ira Meister
President and CEO
Matthew Adam Properties, Inc.
375 Pearl Street – 14th Floor
New York, NY 10038
212-699-8900
imeister@matthewadam.com
