Anyone who is currently booking a trip to New York will be surprised at how few accommodations are currently offered on platforms such as Airbnb or VRBO. This week, a strict law came into force in the US metropolis that bans rentals for less than 30 days. The city wants to alleviate the housing shortage. Critics fear for the income from tourism.
"New York is making a big mistake and shooting itself in the foot by keeping younger people out of the city," said Joe McCambley, a frequent Airbnb booker. The new law only allows rooms to be rented if the landlord lives in the apartment and is present during the entire stay. No more than two guests may come at the same time and the room doors may not be locked. As a result, a large proportion of the 36,000 holiday apartments to date are likely to be eliminated.
Providers must also register with the city government and pay $145 (135 euros) every two years. Of the more than 3,800 applications submitted so far, fewer than 300 have been approved. Hosts who violate the new rules face fines ranging from $1,000 to $7,500.
Landlords and brokerage platforms are up in arms against the law. But many New Yorkers hope that it will achieve its goal of turning vacation apartments into permanent rental apartments again. "I think it's probably necessary," says 44-year-old Marianne LeNabat. "Housing is absolutely unaffordable in New York. And of course it's a problem when so many apartments are taken off the market." The average rent is around $5,000 a month.
The Airbnb platform, based in San Francisco, vehemently opposes the new regulation. "The city is sending a clear message to millions of potential visitors who now have fewer accommodation options: You are not welcome," said Airbnb's Theo Yedinsky.
Property owners also criticize the law. Owners would no longer be able to service their loans if the income from short-term rentals ceased, explains the RHOAR association, an association of owners with a maximum of two apartments.
That's exactly what Tricia T., who wants to remain anonymous, fears. Previously, she rented out the ground floor of her single-family home in Brooklyn to tourists – for an average of $3,000 a month. The 63-year-old recently retired. Now she might have to go back to work, she says on the phone.
T. hopes that RHOAR will succeed in obtaining an exemption for owners of just a few holiday apartments. Everyone at RHOAR “bought their house in the belief that they had the right to do whatever they wanted with it,” says the retiree.
In 2019, the year before the start of the corona pandemic, according to official figures, 66.6 million tourists visited New York, from which the city earned $47.4 billion and secured 283,000 jobs. The new law could drive up hotel prices, which will likely deter budget travelers from traveling to New York.
"There are so many young people who can't afford to stay in a hotel in New York," says Airbnb fan McCambley. "You can't pay $400 a night." McCambley's son Luke rented out his own apartment during the pandemic to supplement his income.
The new regulations are “not economically justified,” says Michael Salinger, a professor at Boston University, in an academic assessment commissioned by Airbnb. This will also not solve the housing shortage in the long term.
Salinger considers the ordinance a "serious blow" to the city's tourism economy and to thousands of New Yorkers and small business owners in the suburbs who rely on home-sharing. New York is not the first metropolis to restrict the holiday accommodation business. In San Francisco, short-term rentals are limited to a maximum of 90 days per year – just like in Berlin.