A new short-term rental law aimed at cracking down on illegal listings went into effect in New York City on September 5th, 2023. Known as Local Law 18, the legislation imposes strict rules on short-term rental hosts in an effort to protect affordable housing options for New Yorkers.
The crux of the law requires hosts to register with the city if they plan to rent out their home or a room for less than 30 consecutive days. Registration comes with several stipulations, however. Hosts must prove the rental unit is their primary residence and they must be present for the duration of any guest stay. The law also limits hosts to renting out only one single unit per building.
Additionally, total rental days are capped at 29 per year, meaning a host can only rent their place for 29 days or fewer annually. Listings must also display the valid registration number. Those who fail to follow the rules face fines of up to $5,000 per illegal booking.
According to city estimates, the law could eliminate up to 70% of Airbnb listings that currently operate in New York City. The regulations specifically target Airbnb hosts who were renting multiple units or using units as illegal hotels year-round. These types of rentals cut into the city’s supply of affordable housing, officials argued.
Airbnb has voiced opposition to the legislation, stating the rules are too severe. The company says Local Law 18 will negatively impact hosts who rely on short-term rentals to afford living in New York, as well as small businesses in the tourism sector. Airbnb says it is working with hosts to help them comply with regulations, but industry experts expect bookings and revenue across the platform to drop steeply.
New York isn’t alone in its crackdown on short-term rentals. Major tourist destinations like London, Barcelona, Berlin, and Paris have passed similar restrictions in recent years. Cities must balance housing availability for residents with the economic perks of tourists utilizing platforms like Airbnb. For now, New York lawmakers have landed decidedly on the side of freeing up housing supply.
It remains to be seen how Airbnb and hosts will adapt to the new legal landscape. But as New York’s short-term rental rules kick in, one thing is clear: the city is serious about reining in illegal listings and giving housing back to New Yorkers. The impact on affordability and the broader hospitality ecosystem promises to be significant in the months and years ahead.
