Starting September 5th, 2023, New York City introduced significant changes to its regulations governing short-term rentals, particularly affecting Airbnb, VRBO and short-term rental hosts. These new regulations will significantly affect New York City short-term rental hosts.
New York City has long been a popular destination for travelers, and Airbnb has become a widely used platform for short-term rentals. However, concerns about housing availability and affordability have prompted city officials to take action. In response, the city has implemented strict rules aimed at regulating short-term rentals.
On January 9, 2022, the New York City Council passed the Short-Term Rental Registration Law (“Local Law 18”), which contains sweeping changes directly impacting the ability of a unit owner to rent out his or her apartment on short-term rental websites, such as Airbnb, VRBO, Booking.com and others that collect a fee for short-term rental listings. The law took effect on September 5th, 2023.
This law now requires all short-term rental hosts to register with the Mayor’s Office of Special Enforcement (“OSE”), which oversees the enforcement of Local Law 18. Although not a de-facto ban on all short-term rentals in NYC, the new law will impose significant requirements for short term rental hosts.
- Primary Residence Requirement: One of the central provisions of Local Law 18 is the stipulation that hosts can only rent out their primary residences. This means that New York City residents cannot use the platform to rent out investment properties or secondary homes for short-term stays.
- Maximum Rental Period: Hosts are limited in how long they can rent out their primary residences. Under the law, a host can only rent out their primary residence for up to 30 days in a 12-month period if they are not present during the rental. If the host is present, there are no time restrictions.
- Registration Requirement: Hosts are required to register their listings with the city Mayor’s Office of Special enforcement (OSE). This includes providing detailed information about the property, including its address, the number of nights rented, and the income generated. Local Law 18 also requires OSE to maintain a prohibited buildings list (“PBL”), which includes buildings where short-term rentals are prohibited by law (i.e. New York City Housing Authority buildings) or by application of the owner of the building.
- Booking Platforms: Under the new law, short-term booking services (such as Airbnb, VRBO and booking.com) are prohibited from processing any transactions for unregistered short-term rentals.
- Anti-Commercialization Measures: Local Law 18 aims to prevent landlords from using short-term rental platforms to operate unregulated hotels. It limits the number of units that can be rented in multi-unit buildings, with the goal of preserving housing for long-term residents.
- Impact on Investment Properties: Property owners in New York City who are using Airbnb or a short-term rental host as a lucrative income source for investment properties will now have to adjust their strategies.
Any violation of Local Law 18 will result in serious and escalating fines issued to the registered host. Hosts may be subject to fines of up to $1,000 for the first violation, $5,000 for the second violation, and $7,500 for each subsequent violation.
Recently the city’s Office of Special Enforcement (OSE) said it approved just 405 of the 4,624 applications it received from landlords and tenants, who attempted to legally register their units on Airbnb, Vrbo and other sites since the city launched the registration portal. OSE has sought further proof and documentation on a significant number of applications, while the majority of the applications are still awaiting review.
If you have any questions regarding the regulation that has gone into effect in New York City, please reach out to your LMC professional.