Citywide Crackdown on Illegal Short-Term Rentals Begins Today

In a move loudly applauded by co-op and condo boards, the city today begins its long-awaited crackdown on illegal short-term apartment rentals by such platforms as Airbnb, VRBO and Booking.com, The New York Times reports.

Local Law 18 requires registration with the city by owners who wish to offer their apartments for short-term rentals; it also allows property owners, including co-op and condo boards, to ban all short-term rentals in their buildings. In the first week after the registration portal opened in March, some 1,500 buildings signed on to the "prohibited buildings list."

The law and the crackdown do not change the underlying rules governing short-term rentals. In buildings with three or more units, it remains illegal to rent housing for fewer than 30 days if the owner or lease-holder is not present during the entire rental period. Nevertheless, the law and the crackdown are expected to lead to the removal of thousands of listings from the platforms. It is the latest and potentially most consequential development in the years-long feud between big cities and the home-sharing companies.

In order to collect fees associated with the short-term stays, Airbnb and other companies must check that a host’s registration application has been approved. Starting today, hosts who violate the rules could face fines of up to $5,000 for repeat offenders, and platforms could be fined up to $1,500 for transactions involving illegal rentals.

The city argues that the proliferation of short-term rentals has pushed up rents and helped fuel New York City’s housing shortage. A city official claimed in a July court filing that more than half of Airbnb’s $85 million net revenue in 2022 from short-term rentals in New York City came from activity that is illegal. Airbnb disputes the figure.

Another group delighted by the crackdown on short-term rentals is the deep-pocketed hotel industry. The Hotel Trades Council, a powerful force in local politics and ally of Mayor Eric Adams, has long fought the expansion of the platforms.

Stuart Saft, a partner at the law firm Holland & Knight and the chairman of the Council of New York Cooperatives & Condominiums, has high praise for the prohibited buildings list. “In essence,” he says, “co-ops and condos can opt out of the system.”