New legislation will require hosts of short-term rentals to register with the city — the latest move in a long battle between New York and the rental companies.
Airbnb recently announced that it had its best quarter ever, reflecting a surging thirst for travel and tourism as the pandemic’s grip loosens. But in New York City, the company is at the center of a different narrative: City leaders, after fighting for years to limit the proliferation of illegal short-term rentals, are poised to impose more stringent restrictions on the online platform.
The City Council on Thursday is expected to approve a bill that would for the first time require hosts to register with the city before renting out their homes on a short-term basis or for less than 30 days. The measure mirrors regulations in other cities like Boston and Santa Monica, Calif.
In New York City, one of Airbnb’s biggest domestic markets, city officials and housing advocates have long complained that landlords and tenants have exacerbated the housing crisis by circumventing laws and setting aside homes to rent out for a few days at a time to tourists or other visitors. Short-term rentals are often more lucrative than long-term leases.
And the hotel industry, which has been decimated by the pandemic, has long complained about Airbnb and similar online rental companies, accusing them off siphoning away business.
The new bill is designed to prevent rentals that violate those laws — including a New York State law that largely bars apartment rentals for less than 30 days when the host is not present — from even appearing online. Supporters said the new restrictions could lead to the gradual removal of thousands of listings for such illegal rentals from short-term rental websites.
“We don’t have enough housing, and anything we can do to put housing back on the market is a good thing,” said Councilman Ben Kallos, a Democrat who represents the Upper East Side and is a sponsor of the bill.
Both City Council speaker Corey Johnson and Mayor Bill de Blasio support the bill, city officials said, and the rules would take effect 12 months after the legislation becomes law.
The push to impose a registration requirement reflects the way that cities worldwide are trying to regulate short-term or vacation rentals offered by companies like Airbnb and its competitor Vrbo, now part of the Expedia Group. The regulation comes as the companies have been helped by a shift to remote work and a rebound in travel.
And it is the latest development in a long battle officials in New York have waged with the companies.
City officials, the hotel industry and advocacy groups have long criticized Airbnb for not doing more to clamp down on illicit rentals. In 2018, Airbnb sued after New York City tried to force it and other platforms to share more data about hosts, resulting in a settlement in June 2020.
The new bill would be far more stringent, said Michael McKee, a member of the Coalition Against Illegal Hotels, a group of neighborhood and pro-tenant organizations.
“We think this will be the most effective way to get rid of illegal hotel activity,” said Mr. McKee, who is also part of Tenants PAC, an advocacy group that helped write the bill. “It might take two to three years, but eventually this is going to make it virtually impossible for bad actor landlords to convert what should be residential apartments into short-term rentals.”
Airbnb has opposed the bill, arguing that the company was helping New York City’s lagging economy during the pandemic.
Alex Dagg, the Northeast policy director for Airbnb, said in a statement this week that the bill “hurt middle-class families in the outer boroughs looking to make a little extra money” and was “especially puzzling given the city is trying to resuscitate tourism.”
The company has also turned to hosts for support. Some of them have argued that income from guests has helped them afford New York’s skyrocketing housing costs.
Expedia Group did not respond to a request for comment.
The debate over the bill highlights the tension between two forces playing out in New York. On the one hand, the city is a top destination for domestic and global travelers, and tourism has become a key pillar of the local economy, which has been battered by the pandemic. On the other, a severe housing crisis means there is a shortage of homes available to residents, driving up rents.
According to data from Inside Airbnb, an independent data-tracking website, there were more than 37,700 Airbnb listings in New York City at the beginning of November 2021. That was significantly below the prepandemic level of more than 49,200 in November 2019.
Still, the numbers last month were notably higher than for the same period in other big American cities. There were more than 6,500 listings in Chicago and more than 17,900 listings in Los Angeles, according to Inside Airbnb.
Several studies have shown the emergence of Airbnb can contribute to a modest increase in rents, though other research has raised questions about the link, said Kellen Zale, a law professor at the University of Houston Law Center who has researched municipal regulation of Airbnb.
The push to regulate short-term rentals has taken place mostly in higher-priced coastal cities or resort towns, she said, and governments have used a variety of different strategies, including outright bans, registration systems like the one being considered in New York and a cap on the number of days people can host short-term visitors.
In some cases, Airbnb has partnered with cities. In Portland, Ore., city officials and the company announced in 2019 after years of back-and-forth that Airbnb was going to build a registration system into its website and share data on listings with the city every month.
The bill the New York City Council is considering is modeled after a regulation in Santa Monica that led to a lawsuit from online home rental sites, which was ultimately rejected by a federal appeals court.
Ensuring that hosts do in fact register their homes with local governments has proved challenging in other communities.
The bill’s supporters said New York’s proposed law had been designed to ensure compliance because it requires online rental platforms like Airbnb to verify that a listing has been properly registered with the city before the platform can collect any fees. Fines for hosts who fail to abide by the rule could be up to $5,000, and platforms like Airbnb could be fined $1,500 for every illegal transaction.
Mr. Johnson said that illegal rentals “are a danger to our communities and take away affordable housing at a time when we need it desperately.” He added that the bill would ensure the “lawful and safe use of our homes.”
It’s not clear exactly how many of the listings in New York City are illegal, and the effectiveness of the new bill will depend in part on how well the city enforces the new law. In places like Santa Monica, Boston and San Francisco, data has shown a modest to significant decrease in the number of listings after a registration system went into place.
Based on the number of listings advertising short-term rentals for entire homes or apartments in the city, suggesting a host may not be present, supporters of the bill estimate that up to roughly 19,000 Airbnb listings could be illegal and eventually delisted.
But Stephen Smith, a co-founder of Quantierra, a real estate firm, questioned how much of an impact the new bill would have, saying that many illegal listings had already been delisted. And, he added, even if the estimates were accurate, it would not do enough to stem the city’s housing crisis.
“These politicians seem to think that this is going to do something for affordability, and in fact it’s likely to do very little,” he said.
The combination of the bill along with another city initiative to curb new hotel development could greatly reduce the number of affordable places visitors to the city can stay, Mr. Smith said.
“If you really make it difficult enough for people to come to New York, they’re going to stop coming to New York,” he said.