NYC Ban On Airbnb Created Massive Black Market In Home Rentals
Boy wasn’t this the most predictable thing ever? If you’re going to require strict rules and licensing for Airbnb-style home rentals, and then not process or approve even those rentals that likely follow the rules, then what exactly is going to happen?
- People own or lease properties that they have to cover the costs on
- They can’t just terminate their leases, or offload their properties (that in some cases may be underwater, at least factoring commissions and other sales expenses)
- So they have to rent out their properties anyway
New York City no longer allows short term rentals for less than an entire home or for more than two guests. When the whole home is rented, the host must be there too. In other words, they have to share the entire home. They need a license for doing this, and platforms themselves are responsibility for verifying the licenses.
For all intents and purposes Airbnb is banned. Fewer than 2% of previous short term rentals (about 450 properties) are licensed and Airbnb listings have falled by more than 80%.
When you make a product or service illegal that doesn’t mean it goes away, it’s just no longer legal. See also drugs, prostitution. And that brings with it a whole host of other problems. New York City’s housing supply issues have nothing to do with Airbnb in any case. The problem is that it is too costly and cumbersome to build new housing! While other cities are looking at New York City’s Airbnb ban as a model they’d love to emulate – and hotel lobbies are pushing them to do so! – it should be a cautionary tale.
- Short-term rentals are now booking through Craiglist and over Facebook
- Others claim to be exempt from the rules and rent anyway, in contravention of the law
- Or they’re being ‘advertised’ as long-term rentals exempt from the rules, and then rent short-term
Houfy is a site where hosts and guests book directly, and New York City listings jumped significantly there when new rules went into effect. They don’t take fees for bookings, so doesn’t appear to be violating the city’s new law… but has still gotten a notice from the city over their practices.
People can no longer rent out their place when they travel, which means they have less income. New York City was Airbnb’s biggest market. That’s been gutted. Short-term rental properties remain, though, and holders of the inventory have turned to a black market since they can no longer rent out in the open. This is going to mean even more scams, both by hosts and renters. It’s going to mean more people getting fleeced, more people in a financial jam, and more risk all around. And New York won’t have solved its lodging problems.
Meanwhile, combined with a quarter of hotel rooms taken out of the market to house migrants, the price of hotel nights is higher than it would be and that keeps away travelers which is bad for the city’s economy and for Manhattan’s still-lagging downtown.