Airbnb criticises New York for price hikes after restrictions on holiday flats

07-09-24

New York City and Airbnb are in a new phase of tensions due to regulations limiting the rental of tourist flats. According to Airbnb, these regulations, which came into force in September 2024, are responsible for price increases in both homes and hotels. New York authorities, however, defend the measures as necessary to preserve housing affordability for residents.

As of 5 September 2024, legislation in New York requires homeowners to register their properties with the city if they wish to rent them for less than 30 days. Most short-term rentals are prohibited unless the owner lives in the property and there are no more than two guests. The regulation also imposes penalties on platforms such as Airbnb for allowing the publication of listings that do not comply with these rules.

Airbnb was quick to respond, arguing that this measure significantly limits the supply of short-term accommodation, a sector that had grown considerably in the last decade. The company points out that this restriction will impact visitors seeking cheaper and more flexible alternatives to traditional hotels, and that it will also negatively affect New Yorkers who rely on renting out their properties for additional income.

One of the most salient points in Airbnb's statements is that the city's regulations could exacerbate New York's housing crisis. According to the company, by reducing the supply of tourist flats, the demand for permanent housing will increase, which could translate into higher prices in both residential rentals and the hotel market.

Although local authorities claim that the measure is intended to ease pressure on the real estate market, Airbnb argues that the restrictions will lead travellers to opt for more expensive hotels, and in turn, the prices of these establishments will also be affected as there will be less competition.

Proponents of the restrictions point out that the short-term rental of tourist accommodation has contributed to the shortage of affordable rentals. They claim that many landlords have withdrawn their properties from the traditional market to rent to tourists, reducing the options for residents. On the other hand, opponents of regulation argue that banning tourist flats will not solve the affordable housing problem and will simply change who benefits financially from tourism in the city.

Homeowners using platforms such as Airbnb have been directly affected. Many of them rely on the income generated from renting out rooms or entire flats to offset the high costs of living in the city. Some have expressed frustration at not being able to register their properties due to strict requirements. The regulations, they say, force them to look for other forms of income or to sell their properties in a market where prices are already unaffordable.

In addition, hotel associations have welcomed the measure, as they consider tourist flats to be unfair competition, as they do not have to comply with the same regulations and costs as hotel establishments. With the new regulation, hotels could recover part of the market they had lost to platforms such as Airbnb. This could, however, have the opposite effect on prices, causing hotels, faced with increased demand, to raise their rates.

The controversy between Airbnb and New York is not an isolated case. Cities such as Barcelona, Amsterdam and Paris have also introduced similar regulations to limit the growth of tourist rentals. In many of these cases, the motivation behind the restrictions is to protect the supply of housing for local residents, who often see mass tourism negatively impacting affordability and quality of life.

On the other hand, advocates of short-term rental platforms argue that this type of accommodation democratises access to tourism, allowing people of different economic levels to enjoy cities that would otherwise be inaccessible due to high hotel costs. They also provide a source of extra income for owners, which can have a positive effect on the local economy.