The rise of short-term rentals using Airbnb changed the real estate market in countless ways. A few downsides included a steady stream of strangers passing through the building. Often on vacation with little need to build relationships with neighbors, they could be loud, rude and dismissive. There was also the safety issue of strangers walking around the halls. Neighbors suffered the consequences, while owners, shareholders or lease-holders often were absent and conducting an illegal business.
Along with encouraging rule violations and creating unwelcome short-term residents, advocates of the law also claim that short-term rentals led to a tighter housing market and higher rents in the city. Housing is always a hot-button topic here, and they argued that the rentals made the city even less affordable and driving inflation. Backing this theory up, the City Comptroller Office saw a $616 million increase in annual rents in the city with 13,000 units dedicated to short-term rentals.
After witnessing these and other downsides, co-op and condo advocates celebrated the passing of Local Law 18 in 2022. Lawmakers designed it to end illegal short-term rentals in the city. In the few months that the law has been in effect, the impact is a clear win for the law’s advocates.
What does it do
The new law requires hosts to apply to the Office of Special Enforcement (OSE) for a license if they plan to rent lodging for less than 30 days. It also requires that the host (either owner or renter) be present during the time of the short-term rental. Buildings can also sign up to a list of buildings that prohibit short-term sublets, automatically discounting applications from those buildings. The list currently includes 1,500 buildings.
As of Oct. 9, 2023, the city received an estimated 4,794 short-term sublet applications and reviewed 1,697. The OSE returned 57% of the applications it reviewed, requesting additional information or to correct clear violations. The OSE has approved 481 applicants who meet building codes and occupancy regulations. Common grounds for returns are:
- Too many people living in the residence.
- The host clearly does not live in the place.
Platforms hit hard
After fighting potential regulations in New York and cities worldwide, rental platforms like Airbnb and VRBO have seen a steep decline in the number of listings in New York City since the new law went into effect in September, going down 89% in the first month of the law.
Is it enough?
Compliance will remain a concern for buildings, particularly if hosts find workarounds, such as one person using Facebook Marketplace. Those with questions or concerns about short-term rentals in their building can discuss the issue with an attorney who handles co-op and condo association disputes and issues. Those who violate these rules can end up in housing court and subsequently evicted.