More than 95 percent of group members say they have no intention of becoming long-term landlords, Lindsay says. Instead, he argues, they are now faced with rising housing costs and no immediate way to cover them. The law has “created some unintended effects that are hurting small homeowners,” Linden says.
Amid the uncertainty, there may be some winners from the law: hotels in the city and the state of New Jersey. Hotel occupancy rates in New York rose slightly year-over-year, from 4 percent in January to 3.4 percent in February, according to CoStar, which tracks commercial real estate. Average daily room rates in January ranged from $198 to $209 a night, and from $200 to about $207 as of February 24.
Across the Hudson River, demand for short-term rentals has grown sharply since the law was passed in Jersey City, Hoboken and Weehawken, all cities that offer quick access to downtown Manhattan. According to AirDNA, Jersey City saw demand grow 77 percent year-over-year through mid-February, while demand in Weehawken and Hoboken grew 45 and 32 percent, respectively.
High rents in New York have not yet been affected. Despite lawmakers’ hopes that the ban could bring them down, short-term rentals are only one piece of a complex unaffordable housing problem. More than half of New York households are rent-burdened, meaning they spend more than 30 percent of their income on housing, a 2023 report from the nonprofit Community Service Society found.
The median rent for properties in the city on Zillow was $165 in March from the same month last year, coming in at $3,465. But a January 2024 report from real estate company Douglas Elliman found that rents in Manhattan and Brooklyn, areas popular with tourists, have declined after rents stabilized and the number of vacant apartments rose in December. If the ban on short-term rentals helps residents, it could take more than six months to show up. A recent study looked at Irvine, California, which banned short-term rentals in all residential areas, and found that after two years of the ban, rents dropped by about 3 percent.
There has been negligence in the enforcement of the law. With Airbnb off limits, people turned to other home-sharing sites like Craigslist, Facebook Marketplace, or Houfy to list their apartments after they were booted from sites like Airbnb or Vrbo. The city has not yet issued any fines to people illegally renting out their apartments, as it is still working on compliance, according to Christian Klausner, executive director of the mayor’s Office of Special Enforcement, which Oversees the licensing process. But he says the city is responding to complaints about illegal rentals. As of February 26, the city had received 5,783 applications to operate short-term rentals. It has approved 1,594, rejected 990, and sent back more than 3,000 for information or corrections.
Airbnb opposed the law, and sued the city before it took effect, but the case was dismissed last August. Now that the law is in place, the company maintains its opposition. “In the six months since New York City’s short-term rental rules went into effect, we’ve seen travelers struggle with record hotel prices and former hosts struggling with income loss — but we’ve seen no increase in housing prices.” Haven’t seen an improvement,” Nathan Rotman, Airbnb’s Northeast policy lead, tells Wired. “We hope that city leaders will listen to the hosts who are advocating for changes to the current regulations.
Lindsay, the homeowners association, says people like her are suffering while their counterparts in New Jersey are benefiting. Renting an apartment on Airbnb “was a lifeline for me, especially during the pandemic,” he says. The association is working on ways the New York City Council can amend the law to allow these small hosts to operate as short-term rentals. At the moment, he says, it fails to group small homeowners with big-time investors. “It treats all property owners as if they were these evil, obsessive villains.”
