Airbnb restrictions in New York is spawning a black market for accommodations

12-10-23

Following the implementation of a new law banning most short-term rentals on Airbnb, just 2% of the 22,000 in New York have registered in the city.

When a new law banning most short-term rentals on Airbnb went into effect in early September, it has seen a significant impact on the New York market. According to data from the Inside Airbnb platform, the number of listings of short-term accommodations on Airbnb has dropped by more than 80%, from 22,434 in August to just 3,227 on October 1. However, only 417 properties have been registered with city hall, suggesting that few short-term rentals have obtained permission to continue operating legally.

In parallel to this decline in listings on Airbnb, there has been an increase in the promotion of illegal short-term rentals on alternative platforms and social networks, resulting in a rental "black market," according to Lisa Grossman, spokeswoman for local group Restore Homeowner Autonomy and Rights (RHOAR), who opposed the new law.

Platforms such as Facebook have become a niche for these short-term transactions, which has negatively impacted the city's rental market.

In addition, many of the properties previously advertised on Airbnb are now offered as long-term rentals of 30 days or more, which exempts them from the new regulation and avoids the need for registration.

This new regulation has generated debate between those who support it and those who criticize it. Proponents argue that it will free up apartment space for New York residents and help with the city's housing crisis, while opponents believe it simply takes away an additional source of income without a significant impact on the housing situation. In addition, hotel prices are expected to increase due to higher demand.

As a result of this situation, Airbnb has redirected its focus to other cities and regions, moving away from New York, which was once one of its main markets. Airbnb CEO Brian Chesky has expressed that the company is concentrating on Paris, the 2024 Olympics and diversifying into longer rentals and car rentals.