Can a New Law Force Airbnb Hosts to Become Landlords?

If you were planning a trip to New York City for Presidents’ Day weekend and logged onto Airbnb Wednesday morning, the first two listings to turn up might have vexed you. One was for a hotel room on Park Avenue South, and the second was for a townhouse apartment in Jersey City, advertised for its proximity to the PATH train to Manhattan, useful because Jersey City is not actually in New York.

When Airbnb arrived 15 years ago, it famously positioned itself as the immersive traveler’s alternative to hotels, which, by implication, were meant for the congenitally dull and basic. At its best, the platform rooted the culturally inquisitive in neighborhoods where they might not have gravitated, largely because there were no hotels — and where they were now driven to spend their money at the local boulangerie or the Malaysian restaurant or the vintage denim place.

At its worst, as critics argued for years, it deepened New York’s housing crisis because so many rental apartments — often stacked up as investment properties in a single building — were now given over to the tourism economy. This pattern changed in September, when Local Law 18, passed the previous year by the City Council, went into effect, which more or less prohibited rentals of fewer than 30 days. Technically, this way of doing business was already illegal by virtue of New York State’s Multiple Dwellings Law, enacted in 1929 to create better safeguards against the dangers of tenement life.

But Airbnb thrived amid loopholes in the law. In May 2022, there were more than 10,500 New York City listings on the site for apartments or whole houses. This week there were fewer than 1,000. In December, as demand for Airbnb spaces in New York fell by 46 percent, the growth in Jersey City and Newark exceeded 53 percent.

Local Law 18, which had a huge push from hotel owners and the affiliate unions that see house-sharing platforms as serial killers out to get one Hilton at a time, is tricky, because it does not effect an outright ban. Someone can become a host by registering with the city’s Office of Special Enforcement, but the process is long and tedious, and the office maintains the right to reject your petition. Of the 5,661 applications received by early February, 1,387 have been granted and 955 have been denied.

How effective the new regulations have been in advancing the cause of affordable housing, part of the goal, is not entirely clear, but the consequences for many homeowners who have depended on income from short-term rentals — not for a Wolf induction range or a trip to Morocco, but simply for the purpose of getting by, seems fairly unambiguous.