A new law has come into effect in New York City (NYC) impacting thousands of short-term rental listings in the city in what Airbnb has called a "de facto ban".
Known as Local Law 18, the legislation came into effect on Tuesday (5 September), after Airbnb lost its legal battle with the city. The case was dismissed in August, with the judge ruling the restrictions to be “entirely rational”.
The NYC law "requires short-term rental hosts to register with the Mayor's Office of Special Enforcement (OSE), and prohibits Booking service platforms (such as Airbnb, VRBO, Booking.com, and others) from processing transactions for unregistered short-term rentals."
The legislation states that, for lets lasting fewer than 30 days, the host must reside in the property alongside guests, no more than two people may be hosted at once and the visitors must have access to all parts of the property.
Property owners must also now register their property with the city government in order to ensure compliance with these rules. This involves providing evidence of residence and proof that the dwelling complies with municipal safety codes. Violation of these new laws could result in fines of between $1,000 and $5,000.
The new rules have been issued in an attempt to tackle the housing crisis in the city, which supporters of the law argue has been aggravated by short-term rentals reducing available properties. Others have argued that short-term rentals create disruption to local communities as guests create noise and pollution.
However, opponents argue the laws will hurt homeowners in need of the revenue stream, as well as deterring tourists. Theo Yedinsky, global policy director for Airbnb, was quoted by The Guardian as saying about the impact of Local Law 18 on NYC: “New York City’s new short-term rental rules are a blow to its tourism economy and the thousands of New Yorkers and small businesses in the outer boroughs who rely on home sharing and tourism dollars to help make ends meet.”
Platforms such as Airbnb and VRBO will be particularly impacted by the new law. Airbnb currently has over 40,000 listings in NYC, whilst VRBO has over 26,000. The platforms have previously provided short-term lets in the city for some of the 66 million visitors annually and, whilst the market represents only around 1% of Airbnb’s revenue in 2022, there are fears that other regions may follow suit.
In fact, several locations have already implemented some restrictions. Santa Monica has banned lets shorter than 30 days, whilst San Francisco only allows permanent residents to be short-term hosts, requiring residents to live in their property for at least 275 nights per year.
If other parts of the US implement laws similar to NYC's, the future of platforms such as Airbnb in the US will become less certain. The US has historically been a hugely significant market for Airbnb, with GlobalData analytics on the company's filings suggesting the US has been a bigger priority than the European continent and Asia-Pacific.
However, other markets are now seeing growth beyond that of the US. While North America will continue to grow as a priority, the US specifically will not. Meanwhile, Europe and Asia-Pacific can expect to see significantly more mentions across company filings than previously.
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