Beginning on September 5, a new law in New York City, referred to as Local Law 18, will bring about significant changes to the home-sharing landscape on platforms like Airbnb. The law requires hosts in the city to register with the Office of Special Enforcement (OSE) and obtain a license to host on Airbnb. In addition, hosts will have to adhere to other new rules, such as eliminating locks on bedroom doors and staying in the unit with the renter. The maximum fine for violating these rules can be as much as $5,000 per short-term stay. The law aims to address safety and housing concerns and reduce the impact of short-term rentals on the availability of long-term housing. However, many hosts are still waiting for their applications to be reviewed, leaving uncertainty about their compliance. This article highlights the details of the new rules and their implications for hosts in NYC.
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New York City Airbnb crackdown starts this week
The highly anticipated Local Law 18 will take effect in New York City starting on September 5, 2022. This new law will bring about radical changes for home-sharing platforms, primarily targeting Airbnb and its hosts. The aim of this law is to regulate and control the home-sharing market in America’s largest city.
Hosts must register with the Office of Special Enforcement
Under Local Law 18, hosts on Airbnb and other platforms will be required to register themselves with the Office of Special Enforcement (OSE) in order to obtain a license to host. This registration process is an essential step for hosts to comply with the new rules and regulations.
To ensure hosts’ understanding of the relevant laws and regulations, they will need to certify their knowledge with the OSE. This certification is crucial to demonstrate that hosts are aware of their responsibilities and obligations as home-sharing providers in New York City.
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New rules and restrictions for hosts
In addition to the registration requirement, hosts will also need to adhere to several new rules and restrictions imposed by Local Law 18. These include:
- Prohibition of locks on bedroom doors: Hosts must remove locks on bedroom doors and offer a “common household” with the renter.
- Residency requirement: Hosts must live in the unit they are renting out, ensuring they are present while the renter is occupying the space.
- No renting while away: Hosts cannot rent their units while they are away on vacation or for work. They must reside in the rental unit while the renter is present.
- Stays shorter than 30 days: Hosts will only be allowed to offer stays that are shorter than 30 days in duration.
- Fines for violations: Any hosts found to be in violation of these new rules can face hefty fines of up to $5,000 per short-term stay or three times the revenue the dwelling generates.
These new rules aim to regulate the home-sharing market and ensure that hosts are providing safe and compliant accommodations to guests.
Impact on number of eligible listings
With over 47,000 total listings in New York City, the implementation of Local Law 18 will have a significant impact on the number of eligible listings. Approximately 7,500 listings will no longer be eligible under the new rules. However, hosts still have the opportunity to make their listings eligible by registering with the OSE before the deadline.
Out of the total listings, around 9,500 listings can still be considered eligible if hosts comply with the registration requirement. It is crucial for hosts to take prompt action and register with the OSE to maintain their eligibility.
Pending applications and potential delays
The Office of Special Enforcement has been faced with a considerable workload due to the influx of applications from hosts seeking to comply with the new rules. As of now, only 808 applications have been reviewed, leaving approximately 75% of submitted applications pending.
While this backlog of applications is undoubtedly causing delays, hosts should be proactive in submitting their applications and prepare for potential delays in the review process. It is crucial for hosts to ensure they meet the registration deadline specified in Local Law 18.
Affecting all short-term rentals, not just Airbnb
It is important to note that the new rules and regulations imposed by Local Law 18 do not solely impact Airbnb hosts. Other home-sharing platforms, such as Vrbo and Booking.com, will also be subject to these changes. The intent behind this law is to regulate the entire short-term rental market, ensuring compliance and safety across all platforms.
It is worth mentioning that Airbnb has filed a lawsuit against Local Law 18. However, the law will still be enforced after Labor Day, despite the legal challenges posed by Airbnb.
Limited impact on Airbnb revenues
Although the implementation of Local Law 18 may cause significant disruptions for hosts, it is unlikely to have a substantial impact on Airbnb’s revenues. In 2022, New York City bookings accounted for only approximately 1% of Airbnb’s total revenue.
While hosts may struggle with the new regulations and potential fines, Airbnb as a platform will likely be able to navigate the changes with minimal financial consequences. Nonetheless, it is crucial for Airbnb to find a balance between compliance with the law and maintaining a robust home-sharing marketplace.
Background on the reasons for the crackdown
The crackdown on home-sharing platforms, particularly Airbnb, comes from the concerns raised by local residents, city officials, and housing rights advocates. One of the primary criticisms against Airbnb is its alleged impact on driving up rents and affecting the availability of affordable housing.
Data from AirDNA reveals that as of July 2023, there were 47,000 total listings in New York City, with 23,000 of them being active listings. These numbers highlight the scale of the home-sharing market and the potential consequences it can have on the local housing market.
Efforts to stop the “Airbnb-ification” of the city have led to the passing of Local Law 18. With the new rules in place, city officials hope to address concerns around affordability, housing availability, and the overall impact of short-term rentals on the fabric of the city.
Long-term implications of the new rules
The new regulations imposed by Local Law 18 will undoubtedly have long-term implications for hosts and the rental market. Hosts may face challenges in listing their units and complying with the strict residency requirements. This can potentially impact their ability to generate income through home-sharing platforms.
Furthermore, the new rules may have consequences for the rental market as a whole. With hosts facing limitations on offering stays shorter than 30 days, there may be a shift in demand towards traditional long-term rentals. This, in turn, could have implications for rental prices and the availability of short-term accommodations.
It is crucial for hosts, renters, and city officials to monitor the long-term effects of these regulations and adjust strategies accordingly to maintain a balanced and sustainable housing market.
Conclusion
The implementation of Local Law 18 will undoubtedly pose challenges for hosts in New York City. The new rules and restrictions, coupled with the registration requirements, will require hosts to make significant changes to their home-sharing practices.
While these changes may cause a headache for hosts, it is important to note that the impact on Airbnb’s revenues is likely to be minimal. The law primarily aims at regulating the home-sharing market in the city and addressing concerns related to housing affordability and availability.
Hosts should be proactive in complying with the new rules, submitting their applications, and familiarizing themselves with the relevant laws and regulations. By doing so, hosts can ensure their eligibility to continue participating in the home-sharing market while adhering to the new guidelines imposed by Local Law 18.
