In January 2022, New York City passed Local Law 18 (“NYC Airbnb Law”), which came into full enforcement in September 2023. With nearly two years of implementation, it is now possible to assess the law’s impact on short-term rentals listed on platforms like Airbnb, VRBO, and Booking.com.

To ensure compliance, the City established the Office of Special Enforcement (“OSE”) to oversee and enforce the law. Regulations mandate that hosts offering rentals of 30 days or less within the five boroughs must register with the OSE. Airbnb and other platforms are prohibited from showing listings from unregistered hosts. Once registered, hosts are assigned a unique number allowing them to accept short-term bookings. 

Key Requirements of the NYC Airbnb Law:

• $145 non-refundable registration fee: Hosts must pay a registration fee to be eligible to rent out their property.
• Primary residence verification: Hosts must provide proof that the unit is their primary residence, meaning they live there for at least 183 days annually. Acceptable documentation includes utility bills, tax returns, or lease agreements.
• Host presence required: The host must be present during the guest's stay and must have access to the entire unit.
• No subdivision of property: The entire unit must be rented as one and hosts cannot subdivide their property to create separate units for guests. This is referred to as the "Unlocked Doors" provision.
• Guest limit: No more than two guests are allowed per stay.

Violators of the law may face fines up to $5,000 per day. Additionally, the OSE maintains a Prohibited Building List that includes public housing, entire rent-regulated buildings, and any building where leases or occupancy agreements prohibit short-term rentals. See GDB Partner Scott Smiler’s article on Co-ops and Condos prohibiting short-term rentals.

Purpose and Impact of the NYC Airbnb Law

The primary goal of the NYC Airbnb Law is to increase the availability of rental units for local residents, potentially easing the city’s high rental prices. The law was specifically designed to discourage landlords from converting apartments into short-term rentals for tourists.

The law has been successful in significantly reducing Airbnb listings, with a decline of over 90% in short-term rental availability between the time of enactment and early 2025. However, despite this reduction, the median asking rent across NYC apartments increased by 2.1% from October 2023 to October 2024, as reported by The New York Times.

In addition, the law has contributed to a rise in hotel prices, with rates climbing approximately 6% in 2024. Critics argue that the law has not achieved its intended goal of lowering rents and has instead eliminated a vital source of income for many New Yorkers, as well as a potential tax revenue stream. On the other hand, proponents contend that the rent increase was modest and that the law has helped slow the overall rise in rental prices by increasing housing inventory.

Potential Amendments: A Shift for One- and Two-Family Homes

In November 2024, Brooklyn City Council Member Farah N. Louis introduced an amendment to the NYC Airbnb Law that would ease restrictions for one- and two-family homes. Under the proposed changes, hosts could rent rooms to up to four guests (plus their children), restrict guests from certain areas (like the host’s bedroom), and no longer be required to be present during a guest's stay. The bill is still under review in committee, and its future remains uncertain.

Moving Forward

As amendments are considered and enforcement continues, Gallet Dreyer & Berkey will provide ongoing updates and analysis of the NYC Airbnb Law, or you can contact Maximilian Ferlesch at mtf@gdblaw.com.