Short-Term Rental Shutdown!

Hotel Voice, Summer 2023

After a decade-long effort to crack down on illegal hotels, new restrictions finally remove thousands of listings from Airbnb and similar sites.

New York City’s Short-Term Rental Registration Law — also known as Local Law 18 — went into effect on September 5th, after surviving a last-ditch legal challenge from Airbnb. The law is the final step in a decade-long fight to shut down illegal hotels across New York City, and resulted in the removal of more than 15,000 unlicensed short-term rentals overnight, according to watchdog group Inside Airbnb.

The Multiple Dwellings Law

In 2010, New York State’s Multiple Dwellings Law established the rule that now requires short-term rentals be registered with the City, and dictates that individuals in NYC apartment buildings may not rent out their entire apartments or multi-family homes for less than 30 days. (In other words, it prevents New Yorkers from turning a residential apartment into an underground hotel.) Since then, additional legislation has been passed aimed at increasing and improving enforcement of the law, as residents, housing advocacy groups, and organized labor have worked together to ensure that illegal hotel operators cannot sidestep the restrictions.

But enforcement has been difficult. Last year, despite the law, Airbnb still had tens of thousands of listings in NYC that likely did not meet the requirements of the law,

and the City’s Office of Special Enforcement — which has been tasked with reigning in illegal hotels — recently estimated that around 55% of Airbnb’s revenue in NYC was flowing in from such listings.

How registration prevents illegal rentals

Local Law 18 — passed by the City Council in early 2022— was the solution to this problem. This law follows the lead of many other cities across the country, by requiring short-term rental hosts to register their units with the City and prohibiting websites like Airbnb from listing or processing payments for those who don’t.

Airbnb attempted to block the legislation from going into effect with a lawsuit against the City, arguing that the bill "operates as a de facto ban against short-term rentals.” But in August, a New York State Supreme Court judge threw out that case in a major victory for New Yorkers, writing in her decision that “the Court finds that these rules are entirely rational.” September 5th was set as the new start date for the short-term rental registry, and overnight, around 15,000 unlicensed short-term rentals in NYC vanished from the site.

A victory for New Yorkers

These long-awaited regulations ensure that thousands of illegal hotel rooms are shuttered, directing visitors to our City back to union hotels. Every guest that will now stay in a union hotel rather than an illegal short-term rental will translate to another HTC member working, and increased job security in our industry.

But this new law does not simply protect our members’ jobs: it’s a major victory for all New Yorkers. At a pivotal moment where the city has such an intense demand for housing and the rent is sky-high, thousands of these illegal hotels will now be able to re-enter the city’s regular rental market, easing the pressure on working people and their families to keep a roof over their head.

"For too long, our city had thousands of illegal home rentals being operated as illegal hotels, which not only hurt New Yorkers who worked in legitimate hotels, but also took housing away from families who needed it. That’s not going to continue on my watch. I’m proud to say that we’re implementing this law to make sure that short-term rentals are done the right way, so hotel workers can get back to work and so our city can get its homes back on the housing market."

- Mayor Eric Adams