In May 2022, Curbed reported that New York City had more Airbnb listings available than long-term rentals. Given the current shortage of long-term rentals, news that Airbnbs were outpacing
permanent rentals angered many local residents. For some people, the news also came as a surprise. Since 2016, Airbnbs have been heavily regulated in New York City, so how could more than 35,000 local properties even be available on the platform?
The Regulation of Airbnbs and Other Short-term Rentals
Since 2016, most short-term rentals, including many of the rentals found on sites such as Airbnb and VRBO, have been prohibited under the New York State Multiple Dwelling Law (MDL).
Most housing stock in New York City is classified as “class A”—that is, “a multiple dwelling that is occupied for permanent residence purposes” (e.g., tenement, flat house, maisonette apartment, or apartment house). As the MDL clearly states, “A class A multiple dwelling shall only be used for permanent residence purposes. For the purposes of this definition, ‘permanent residence purposes’ shall consist of occupancy of a dwelling unit by the same natural person or family for thirty consecutive days or more.” Under the MDL, one is permitted to have friends or family members stay in their property for less than 30 days for free, but once any money exchanges hands (e.g., on a platform like Airbnb or VRBO), a violation has occurred.
Fines for non-compliance are also steep. In New York City, the Mayor’s Office of Special Enforcement (OSE) is authorized to issue fines up to $2,500 per day for class A rentals of less than 30 days. Since advertising illegal short-term rentals is also prohibited by the MDL, just listing a class A unit on Airbnb or a similar site can also lead to fines from $1,000 for a first violation to $7,500 for a third or subsequent violation.
Most housing stock in New York City is classified as “class A”—that is, “a multiple dwelling that is occupied for permanent residence purposes” (e.g., tenement, flat house, maisonette apartment, or apartment house). As the MDL clearly states, “A class A multiple dwelling shall only be used for permanent residence purposes. For the purposes of this definition, ‘permanent residence purposes’ shall consist of occupancy of a dwelling unit by the same natural person or family for thirty consecutive days or more.” Under the MDL, one is permitted to have friends or family members stay in their property for less than 30 days for free, but once any money exchanges hands (e.g., on a platform like Airbnb or VRBO), a violation has occurred.
Fines for non-compliance are also steep. In New York City, the Mayor’s Office of Special Enforcement (OSE) is authorized to issue fines up to $2,500 per day for class A rentals of less than 30 days. Since advertising illegal short-term rentals is also prohibited by the MDL, just listing a class A unit on Airbnb or a similar site can also lead to fines from $1,000 for a first violation to $7,500 for a third or subsequent violation.
Legal Airbnb Rentals
Despite the strict regulation of Airbnbs and other short-term rentals in New York City, there are a few ways to legally rent out your home. Specifically, local residents may rent out their properties on Airbnb if they meet one or more of the following criteria:
- The property is rented for four or fewer nights per quarter
- The property listing is for a room with the capacity for two or fewer guests in one's home, and the host is present
- The rental is longer than 30 days
Even if you are able to legally rent out your property, however, several other regulations apply that may determine whether or not you ultimately list your apartment on Airbnb or a similar platform:
- Information Sharing: Home-sharing platforms such as Airbnb are legally obliged to share your information with New York City; if you don’t consent, you won’t be able to list your property on the platform.
- Rent Controlled and Stabilized Apartments: If you are renting all or part of a rent-controlled or rent-stabilized apartment in New York City, you can’t legally charge more than you’re already paying, and if you’re only renting out a room in the apartment, the renter can’t be charged more than their proportional share of the rent. For example, if you have a two-bedroom rent-controlled or rent-stabilized apartment at $3,000 per month, you can't charge more than that amount to rent out the entire apartment nor rent out a room in the apartment for more than $1,500 per month.
- Renter Regulations: Most landlords include a clause prohibiting short-term rentals and longer-term sublets in the lease. If you’re a renter, check your lease before pursuing any subleasing opportunity.
- Co-op Shareholders and Condo Owners: Many co-ops and condos strictly prohibit short-term rentals or restrict them until the shareholder or owner has met a residency requirement (e.g., owned the unit for at least two years). Be certain to clarify the rules with your co-op or condo board before listing your unit.
- Taxes: Finally, be prepared to pay taxes on any revenue generated from your rental, and don't expect to hide your earnings. If you make more than $600 on Airbnb or any other short-term rental platform in any calendar year, you will receive a 1099-K and be expected to account for it in your taxes. Additional taxes may also apply.
Airbnb Availability and Its Impact on the Local Rental Market
Despite the complex rules that govern short-term rentals in New York City and the high fines associated with non-compliance, Airbnb and other short-term rentals continue to have a profound impact on the local rental market. While some listings are legal (e.g., rentals that are longer than 30 days and rooms in many host-inhabited apartments), it isn’t difficult to find illegal listings on Airbnb and similar platforms. There is also reason to believe this is impacting available long-term rental inventory.
On June 23, 2022, The Real Deal reported that there were 28,325 rental units available in New York City (notably, this is the highest number of available rental units reported since October 2021). The same week, Inside Airbnb, which tracks Airbnb rentals and their impact on major cities around the world, reported 37,410 Airbnb listings in New York City and close to 16,000 listings in Manhattan alone. Although the lack of permanent rentals, especially affordable long-term rentals in New York City, can’t be blamed on Airbnb alone, the disparity between long- and short-term rentals is difficult to ignore.
As more local landlords shift from long-term rentals to illegal short-term or legal 30-day or longer rentals on platforms like Airbnb, the shortage of long-term rentals seems bound to persist. Worse yet, as long as inventory remains low and demand outpaces supply, rental prices also seem likely to rise.
Contributing Writer
Cait Etherington
Cait Etherington has over twenty years of experience working as a journalist and communications consultant. Her articles and reviews have been published in newspapers and magazines across the United States and internationally. An experienced financial writer, Cait is committed to exposing the human side of stories about contemporary business, banking and workplace relations. She also enjoys writing about trends, lifestyles and real estate in New York City where she lives with her family in a cozy apartment on the twentieth floor of a Manhattan high rise.
6sqft delivers the latest on real estate, architecture, and design, straight from New York City.
