Blow to Airbnb: New York bans short-term tourist rentals

If you have been trying to book an apartment for a short vacation in New York in recent weeks, you may have been surprised by how few offers are available on platforms such as Airbnb or VRBO.

Starting this week, a new local law prohibits renting apartments for stays of less than a month, leaving a good part of the city’s 36,000 tourist apartments out of the question.

The new law only allows the rental of rooms as long as the landlord lives in the apartment and is present during the stay of your visitors, who may not be more than two at the same time nor may they lock the doors of your room.

To do this, hosts will have to register with the mayor’s office and pay $145 every two years. But permissions are granted in drops. Of the more than 3,800 applications registered so far, fewer than 300 have been approved. Fines for violators range from $1,000 to $7,500, though users will not be affected.

The mayor’s office wants to end a practice “illegal”, which generates “noise, trash and security issues” for both visitors and permanent residents.

“Many residential buildings do not have adequate security personnel to deal with travelers”, alleges the Office of Special Application of the legislation, in charge of enforcing this ordinance approved in January 2022, after years of attempts to regulate this market.

“They are not welcome”

For one of the largest platforms that operates in the market, Airbnb, “the city is sending a clear message to millions of potential visitors who will now have fewer lodging options when visiting New York: they are not welcome”, says Theo Yedinsky, director of global policy for the platform, in a statement sent to AFP.

In a city with rents that average around $5,000 a month, one of the goals of the new ordinance is to get many of these tourist apartments onto the market and alleviate the city’s chronic housing shortage.

But many believe it will create a bigger crisis than it hopes to solve.

The RHOAR organization, which brings together small owners of a maximum of two homes, ensures that eliminating short-term rentals “It will threaten homeowners’ ability to service their mortgages, possibly creating an additional housing crisis.” and puts them “at grave financial and personal risk”.

This is the case of Tricia T. (she prefers not to give her last name), 63, who rented the lower part of her two-story family home in Brooklyn. She recently retired, if she has to do without the average US$3,000 a month that the rent brought her, she may have to reconsider going back to work, she told AFP by phone.

“Almost everyone in the organization owns their home and they bought it thinking they had the right to do whatever they wanted.” in it, he says.

“Maybe in the long term, more people will rent it indefinitely”, which is not an immediate option in your case, since you are going to try to stick to the law and try to rent it for the moment for periods longer than 30 days.

“Everyone is waiting to see what will happen from now on because no one can believe that this is a permanent change.”, he says, while his organization tries to make an exception for small owners of tourist apartments.

“Shot in the foot”

In a city that in 2019 -before the pandemic- received 66.6 million visitors who spent US$47.4 billion and generated 283,000 jobs, according to data from the Office of the State Comptroller, the new law may contribute to increasing the price of hotels already scare away people with less means.

“There are a lot of young people visiting New York who can’t afford to stay in a hotel or eat in a restaurant…and they won’t if you can’t afford $400 a night”says Joe McCambley, 66, a former Airbnb user, who believes the city is making “a big mistake and shooting himself in the foot.”

“They are eliminating the competition. Someone is paying politicians to do it”says his son Luke McCambley, 33, who during the COVID pandemic rented his own apartment to supplement income.

According to a report by Boston University professor Michael Salinger, for Airbnb, the new regulations will not “economically justified” nor will it solve one of the problems it intends to correct: the long-term housing shortage in the city.

Salinger considers that this regulation is “a hard knock” for the city’s tourism economy and for thousands of New Yorkers and inner-city small businesses who depend on home sharing and tourism dollars to make ends meet.

Median income from this type of rental rose to $5,000 in 2021, according to their report.

Although more restrictive, New York follows cities like San Francisco, which limits these rentals to a maximum of 90 days per year, in the regulation of this sector that has changed the appearance of the historic centers of many tourist cities in recent years.

Source: AFP