NYC Passes Regulation Severely Limiting Short-Term Rentals in the City

After years of legal battles between the City of New York and the short-term accommodation platform Airbnb, it seems that the balance has finally tipped in favor of the authorities of the Big Apple. The courts ruled in favor of the government, which will mean a series of restrictions for the platform and, mainly, its users: minimum stays must be one month.

What happened: To address the problem of gentrification, the government of New York implemented restrictions that will change the way the application and short-term rentals work. Starting on September 5, 2023, Airbnb stays will be limited.

Cancellations of reservations after this date have overwhelmed owners, guests, and the company itself. It is expected that more than 5,300 reservations will be canceled in just the first week that this measure begins.

How this affects Airbnb hosts: In addition, all owners who decide to offer their apartment must complete a registration in order to guarantee the safety of users. Transactions processed with unregistered hosts will constitute a violation of the law, so this measure will also apply to other platforms, such as Booking and Vrbo.

Back to where it all began: There is still an option for those who need accommodation for only one or two weeks, but it means the platform going back to its roots. For stays of less than one month, the owner/host must reside and remain in the apartment during the stay, just as the service was offered in 2008, when Airbnb began. In these cases, the maximum number of guests allowed will be two in one day.

Pushback: The measure, as expected, was regretted by the global policy director of Airbnb, Theo Yedinsky, who, along with several owners, argued that the regulations of the real estate market in New York have made it almost impossible for anyone to register a property for rent.

“The City Council has sent a strong message to millions of potential visitors who will now have even fewer accommodation options when they come to New York City: You are not welcome!” Yedinsky said.

A temporary solution: For now, the platform assures that, in order to reduce the impact on travelers who had planned to visit New York in the fall, it will not cancel reservations until December 1. But from September 5, the City Council will have knowledge of unregistered hosts and will be able to impose fines.

Why this is happening: For some time, Airbnb has offered tourists around the world a more affordable alternative to hotel accommodations. It allows users to earn extra income by renting their properties for short periods of time, tailored to the needs of the visitor.

In many cases, this activity became the main source of income for owners. Unfortunately, what was initially a "win-win" for both parties was quickly exploited by hosts of large real estate lots, who bought several apartments for the sole purpose of renting them through the platform.

This led to rents in New York skyrocketing in increasingly aggressive ways relative to the average income of residents. According to a 2018 report from McHill University, gentrification made it almost impossible to acquire a property, and the rise in rental prices became unstoppable.