The recent crackdown on short-term rental regulations will likely impact tourists who are looking for less costly alternatives to NYC hotels. However, the question for New Yorkers is how will this mandate impact the rental market, if at all? Last week, New York City began to aggressively enforce Local Law 18 (aka Short-Term Rental Registration Law), which requires hosts to register their listing with the Mayor’s Office of Special Enforcement (OSE). The OSE will be working with booking platforms like Airbnb to enforce compliance with the city's verification system and halt unverified transactions.
As it stands now, renting an entire apartment or house for less than 30 days unattended is illegal in NYC. The host must stay on site for each booking, only allowing them to rent out a room as long as they are present. This new enforcement comes after two of Airbnb’s lawsuits against the “de facto ban” were dismissed. City officials argue that short-term rentals, such as Airbnb, reduce the supply of long-term housing, leading to decreased rental availability and higher rent prices as a result.
A study was conducted five years ago that showed for every 1.0 percent increase in Airbnb rentals, there was a 1.6 percent increase in rental rates. Another concern that prompted this law into action was that Airbnb guests were bringing a heightened risk of crime, excessive noise, and cleanliness issues, given the rise in complaints from fellow residents.
To be fair and examine both perspectives, NYU Professor Arun Sundararajan counter argues that cracking down on Airbnb rentals may not necessarily have a significant impact on the supply of rental units, if at all. He said Airbnb listings in NYC are, in most cases, “posted by people who are just renting their apartment on the side during the days that they’re not there. It’s not like there’s some special stock of housing that is running exclusively on Airbnb that will suddenly be released to the market.”
Whether the stricter regulations will improve housing supply and reduce rental costs, time will tell. Given that this law is just now being aggressively enforced, it is still too early to see what impact, if any, it will have. We also need to consider how strict the city will be in enforcing these regulations and the level of compliance from hosts.