This morning in the Wired Start weekly newsletter, an article was shared regarding the enforcement of tight restrictions on short-term rentals in New York City (NYC). Local Law 18 is the regulation being enforced that is all but shutting down short term rentals in NYC. This is one of the considerations you must contemplate when deciding to invest in short-term rentals, regulations can happen anywhere.
Here are some of the stipulations of the new regulation:
- Hosts must register with the city
- Only those who live in the unit can rent the unit – no more arbitrage
- Hosts must be local during rentals
- Only 2 guests during a rental
- just to name a few ………
The city has really come down hard on the industry to combat the few those that abused what became a way for honest hosts to find a way to make ends meet in an expensive city. It also impacts those families that would not otherwise be able to afford to bring the family to the city for a sightseeing experience and vacation. Hotels and meals are expensive for a family and the short-term rental option provided all the comforts of home with kitchens to manage the cost of the vacation.
The affordability of housing and vacations in the Northern Virgina (NVA) area have also driven investors to seek short-term rental options and “house hacking” (renting by the room instead of by the unit) to assist in making ends meet. There are investors that have seized the opportunity and unfortunately, guests / tenants take advantage of the situation impacting themselves and the landlords / hosts.
I am an agent investor with a lot I plan to build a small home to use personally, as well as rent short term when I’m not there. My brother already does this with his vacation home and short-term rentals were a topic of conversation with our new Home Owners Association (HOA) this past month. Again, it is the few that take the party too far, impacting those around them without thought that will drive any new regulations. We work to vet the guests as best as we can, but there is never a perfect solution. Fortunately for us, the HOA isn’t looking to develop harsh restrictions at this time. The only request was to have availability to the home owner hosting the short-term rentals so that the longer term residents have a course of action when guests become out of hand.
BOTTOM LINE
Airbnb host ~66 million guests a year looking for low cost options to experience location with the comforts of home. In 2022 alone, short-term rental listings accounted for ~$85 million in NYC. The city’s new regulations illustrate how the actions of a few can cause local governments to effectively stamp out short-term rentals overnight! NYC is just one of many cities around the world trying to control the ill effects that short-term rentals can bring. This is a two edged sword, by stamping out the short-term rental market, the vacation revenue that came with it also dries up.
Read the full story here.
As always . . .
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