New York City cracks down on Airbnb, other short-term rentals

NEW YORK - Those who have been trying to book an apartment for a short vacation in New York City may have been surprised at how little is available on platforms like Airbnb or VRBO.

A city law went into effect this week that bans rentals for less than 30 days, leaving a good part of the 36,000 short-term tourist apartments in the city out of the rental game. One reason for this is to bring these apartments back into the long-term market in response to the city’s housing shortage.

“I think New York’s making a big mistake and shooting itself in the foot by keeping younger people out of the city,” said former regular Airbnb client Joe McCambley, 66.

The new law allows room rentals only when the landlord lives in the apartment and is present during the guest’s entire stay. The visitors may number no more than two at a time, and they may not lock their room doors. Hosts must register with the mayor’s office and pay US$145 (S$198) every two years. Permits are granted sparingly. Of the more than 3,800 applications registered so far, fewer than 300 have been approved. Fines for violators range from US$1,000 to US$7,500, although guests will not be affected.

Property owners and platforms like Airbnb complain bitterly about the law, but a fair number of city residents say they favour bringing short-term rentals back into the long-term market to ease a housing crunch.

“I think it’s probably necessary,” Ms Marianne LeNabat, a 44-year-old city resident, told AFP. “Housing is totally unaffordable in New York, and I don’t think a solution is ever just introducing more housing stock, but certainly taking tons and tons of units off the market is a problem.”

The mayor’s office wants to put an end to what it calls an illegal practice, which generates “noise, litter and personal safety” issues for permanent residents.

“Many permanent residential buildings do not have adequate security personnel to deal with travellers,” said the Office of Special Enforcement, charged with enforcing the ordinance passed in January 2022, after years of attempts to regulate the market.

The city clearly has Airbnb in its crosshairs with the new law, and the San Francisco-based platform vehemently objects to the measure.

“The city is sending a clear message to millions of potential visitors who will now have fewer accommodation options when they visit New York City: You are not welcome,” said Mr Theo Yedinsky, global policy director for Airbnb.

In a city with rents averaging around US$5,000 a month, one of the goals of the new ordinance is to get many of these tourist apartments back onto the long-term market to alleviate the city’s chronic housing shortage.

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

The organisation RHOAR, which brings together small landlords of up to two homes, said eliminating short-term rentals “will threaten owners’ ability to cover their mortgages, possibly creating an additional housing crisis”, and puts them “at acute financial and personal risk”.

This is the case of recently retired Tricia T. (she prefers not to give her last name), 63, who used to offer the ground floor of her two-storey family home in Brooklyn as a short-term rental.

If Tricia has to do without the US$3,000 a month on average that the rent brought her, she may have to rethink going back to work, she told AFP. “Almost everybody in (RHOAR) owns their own home and... they bought it thinking they had the right to do whatever they wanted.”

She said she would try to follow the law by renting only for periods longer than 30 days. “Everybody’s waiting to see what’s going to happen next because no one can quite believe that this is a permanent change.”

She said the organisation would try to win an exemption for owners of only a few short-term rentals, while allowing the law to proceed for companies that rent dozens of short-term rentals.

New York City welcomed 66.6 million visitors in 2019, the year before the pandemic, and they pumped US$47.4 billion into the economy and generated 283,000 jobs, data from the Office of the State Comptroller shows.

The new law may drive up hotel prices and keep people, especially less affluent travellers, away from the city, critics say.

“There are so many young people who visit New York who can’t afford to stay in a hotel,” said Mr McCambley, the former Airbnb client. “They’re not going to be able to... pay US$400 a night.”

“They’re eliminating competition,” said his son Luke McCambley, 33, who during the pandemic rented out his own apartment to supplement his income.

According to a report prepared for Airbnb by Boston University’s Professor Michael Salinger, the new regulations are not “economically justified” and will not solve one of the problems they are intended to correct: the city’s long-term housing shortage.

Prof Salinger considers the regulation to be “a major blow” to the city’s tourism economy and to thousands of New Yorkers and small businesses in the suburbs who rely on home sharing and tourism money to make ends meet.

Although more restrictive, New York follows other cities, including San Francisco which limits short-term rentals to a maximum of 90 days per year. AFP