Your next New York City stay could cost you dearly

New York has, let’s be honest, never been much of a budget break. Whether you’re forking out a cool $70 for a yellow cab from JFK to Manhattan, or wincing at the 20% tip you’re expected to add onto just about everything, a stay in the Big Apple is likely to take a big bite out of your bank account. And the bad news? It’s about to get worse.

That’s thanks to nothing short of a crisis affecting the city’s 23,000 rooms and apartments offered up for short-term rental through platforms such as Airbnb, Vrbo and Booking.com.

It’s a crisis that has been a long time coming, but came to a head this week as city authorities in New York enforce a piece of legislation dubbed Local Law 18. While the law passed in January 2022, and has been nearly a decade in the making before that, city authorities have said they will, as of September 5, begin to enforce it.

And that’s bad news for both hosts and travellers in the city.

The crux of Local Law 18 states that rental hosts must be registered with the city, and may only book stays of less than 30 days.

That’s perhaps not an issue for travellers cruising into Manhattan for a week’s sightseeing, but here’s the kicker: Local Law 18 also states that hosts of short-term rentals must live in the property during the guest’s stay, can only host two guests. Plus, internal doors must be unlocked so that all occupants have “free and unobstructed access to every room, and each exit within the apartment”.

That means no more ‘Entire Home’ rentals, and your host is now also your very familiar roommate. Ouch.

Those found breaking the law could be hit with thousands of dollars in fines. Though Airbnb has taken the law to court, their appeals were dismissed in August, and the site has now informed hosts that those who don’t comply will be removed from the platform.

It’s a seismic moment for Airbnb in one of the US’s most popular destinations, and a blow to those travellers who have favoured an affordable self-catering apartment over the city’s notoriously expensive hotels.

Airbnb has called Local Law 18 “a de facto ban against short-term rentals”, and has highlighted the effect on both the tourism economy and locals in need of alternative income.

“It has long been our goal to work with New York City to create sensible home-sharing regulations for our host community,” Airbnb’s global policy director, Theo Yedinsky, said in a statement. “New York City’s new short-term rental rules are a blow to its tourism economy … the city is sending a clear message to millions of potential visitors who will now have fewer accommodation options when they visit New York City: you are not welcome.”

According to Skift.com, there were approximately 23,000 active Airbnb listings in New York in July 2023, with about 7,500 of those listed as exclusive-use rental units that now face an outright ban due to the new law.

Estimates suggest up to 70%, or 16,100, of the total listings could be affected, forcing travellers to find a room in an often-overpriced hotel market.

According to the Washington Post, by the end of August 2023 the Office of Special Enforcement (OSE), the agency responsible for enforcing the new regulations, had granted just 257 certificates from 3,250 applications. Airbnb, the largest player in the city’s short-term rental market, has said that listings without the required registration number will not be allowed to accept new bookings.

Airbnb said that bookings made before the law comes into effect, for stays until December 1, will be honoured, but only compliant properties will be able to accept new bookings for after that date. Bookings for non-compliant hosts will be cancelled and refunded.

More than 63-million people are expected to visit the five boroughs of New York City in 2023, and with the city’s 127,000 hotel rooms running at high occupancy rates — above 80% — room rates are set to rise. What about a hostel, as you’d book for a budget stay in Europe? Nope, New York banned almost all of those in 2010, under the Illegal Hotels Bill.

All of which is bad news for travellers heading to New York this year. With both short-term rentals set to be in short supply, and more expensive, the advice is simple: get your booking in early, or risk staying out of state.