The attention of the travel industry will shift to New York in the first week of September, but not for the usual attractions such as Broadway shows or the U.S. Open Tennis Championships.
Instead, the spotlight will be on the enforcement of new short-term rental (STR) rules that have already led thousands of Airbnb hosts to remove their listings. In response to these regulations, Airbnb filed a lawsuit, claiming the rules were “extreme and oppressive” and amounted to a de facto ban on short-term rentals. Although a judge dismissed the lawsuit earlier this month, along with another filed by three hosts, the city announced its intention to commence enforcement on September 5.
While other cities have also taken measures against short-term rentals, New York’s high profile and the scope of its regulations could establish it as a potential model for other jurisdictions, experts noted.
Airbnb declined to comment, but previously emphasized its cooperation with local governments and its efforts to engage with New York in advocating for clear and effective rules that target illegal hotel operators while allowing residents to continue sharing their homes.
Although the now-dismissed lawsuit showed Airbnb’s belief that New York City had gone too far, the impact on the company’s rentals may not be as drastic as predicted, given the city had already seen a reduction in listings due to the pandemic and regulatory environment.
The new regulations require short-term rental hosts to register with the city, be present during guests’ stays, and prohibit renting out entire apartments or homes. Fines for violations range up to $5,000.
The rules also hold booking platforms accountable and impose penalties of up to $1,500 for processing payments from unregistered hosts.
Murray Cox, founder of InsideAirbnb, an activist group focusing on illegal rentals and gentrification, expressed satisfaction with the ruling and the city’s plan for action. He stressed that regulations on short-term rentals help mitigate negative impacts on communities.
The reduction of the fee, however, might impact growth in the short-term rental landscape, preventing future expansion. While hotels may benefit from reduced competition, New York visitors might find fewer unique accommodation options.
As New York sets an example, other U.S. cities could follow suit in regulating short-term rentals, encouraged by the dismissal of Airbnb’s lawsuit and the clarity provided by the Communications Decency Act.
Despite some expecting these regulations to alleviate housing shortages, their impact on controlling housing prices is limited, particularly in urban areas where the proportion of short-term rentals is relatively small.
The move towards more centralized and enforced rules could indicate the maturation of the short-term rental market, providing consistency and an even playing field for the industry.