Why is it getting harder to rent an Airbnb in New York City?

Starting September 5, booking an Airbnb rental in New York City has become even more difficult. This is because new rules have gone into effect that require all hosts to register with the city, ensuring that their listings comply with strict rules regarding occupancy and building codes. After years of sparring with the city and a failed lawsuit earlier this year, Airbnb has run out of options and is set to lose thousands of listings in one of its largest markets.

1. What are the new regulations?

New York already had some more restrictive regulations, but the city says they have been widely flouted. Rules that have been in place for years prohibit people from renting their apartments for less than 30 days without the presence of the host, and stipulate that the host cannot rent their apartments to more than two guests. Units available for short-term rentals must also comply with building and fire codes, including those prohibiting locks between rooms and certain sprinkler and fire alarm systems on the property. In a legal filing last month, the city alleged that about half of Airbnb Inc. The $85 million in rents in New York last year were derived from illegal listings. New local law Section 18, passed in January 2022, requires rental hosts to register with the mayor’s office for special enforcement and bans platforms such as Airbnb and Expedia Group Inc.’s Vrbo. Booking.com will process transactions for unregistered units. In a lawsuit against the city earlier this year, Airbnb called the new rules an “effective ban” against the company. She also said the campaign appeared to aim to get short-term rentals out of New York “once and for all”.

2. Why restrict short term rentals?

The city says New York is in the midst of an affordable housing crisis exacerbated by illegal short-term rental listings, which pull much-needed housing off the market for residents. The city said it continually receives complaints about illegal listings, including excessive noise, overflowing trash, fire hazards, and property damage. According to market analysis firm AirDNA, Airbnb has about 23,000 units in New York City, of which 7,500 do not meet the criteria for applying for a license. More than half of these properties are frequently rented and account for about 40% of Airbnb’s net revenue in New York City, according to AirDNA.

3. Who are the winners and losers?

In its lawsuit, Airbnb said the city’s restrictions would “negatively impact the livelihoods” of many residents who rely on the platform for income and deprive tourists of affordable lodging options, especially during peak periods coinciding with events such as the New York City Marathon and Grand Prix. Motor cycles. Christmas holiday season, when hotels can’t meet all the demand. This will also affect Airbnb’s bottom line. Although no city accounted for more than 1.3% of the company’s 2022 revenue, New York is among the top five Airbnb markets with the most active listings, after Orlando, Los Angeles and Phoenix. The powerful hotel lobby has long been an outspoken opponent of Airbnb in New York. Hotels, homestays and furnished apartment buildings make up about 6,000 active listings on Airbnb, according to AirDNA, and can be exempt from registration. Many individual city hosts have also opposed the regulation, saying they depend on the extra income to cover housing costs in one of the most expensive real estate markets in the country. Owners of one- and two-family homes, mostly in New York’s outer boroughs, say they will struggle to pay exorbitant property taxes without additional income.

4. Can a guest be penalized for using an illegal short-term rental?

No, the new regulations affect non-compliant operators by imposing fines on hosts and hosting platforms. Hosts who violate the rules could face fines of up to $5,000 or three times the revenue generated by the unit, whichever is less. The platforms can be fined $1,500 per offense or multiples of the transaction fee.

5. What happens to my existing booking?

Airbnb does not cancel existing reservations with check-in dates on or before December 1. However, the Company will refund or not collect fees associated with such stays after check-in to comply with short-term rental regulations.

6. Will the lists disappear overnight?

Since at least mid-August, Airbnb has been blocking calendars from listings for hosts who do not provide a registration number and have not updated their minimum nightly stay to 30 nights or more, according to an email sent to an Airbnb host. The city has also received a flood of applications, although thousands of potential hosts have yet to apply for a license. As of Aug. 28, the city had approved only 257 short-term rental host registrations out of 3,250 applications, New York’s office of special enforcement told travel magazine Skift. It denied 72 requests and returned 479 requests for additional information, according to Skift. The city’s enforcement agency did not respond to multiple requests for comment on possible enforcement shortfalls. But the city’s attorney general told the hosts that “people who have gone to great lengths to register may be granted leniency.”

• A lawsuit filed by Airbnb against the New York City Mayor’s Office for Private Enforcement.

• New Local Law No. 18 regulating short term rentals.

• An article published by Bloomberg Businessweek in August about how an abundance of inventory makes it difficult for short-term rental investors to make ends meet.

• An article published by Bloomberg News in August about a series of new short-term rental rules taking effect in cities including Barcelona, ​​Copenhagen, Dallas and San Francisco.

More stories like this are available at loomberg.com

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