What is the deal with Airbnb New York? Is Airbnb legal in New York? These have been questions on real estate investors’ mind for quite a while now.
There’s no doubt that New York City is a tourist hub. The bustling city welcomes over 60 million international as well as American tourists every year. This not only makes it one of the most visited cities globally, but it makes Airbnb New York the third largest Airbnb market worldwide, and one of the more successful locations to invest in real estate. I mean, where better to invest if you’re going for short-term rental investment, right?
Well, that’s been the question lately.
Let’s Get Into Context: The Background Story of New York Airbnb Legal Issues
New York City has been on the list of controversial Airbnb investing locations for a while now. The main problem with Airbnb New York, and Airbnb in general, is that it drives rent up significantly, and it takes homes off the market. This leaves local communities suffering from surging rents, and fewer homes on the market.
The claim is that Airbnb has a negative effect on the New York real estate market. And while the city is also becoming a model for other booming successful Airbnb markets, the fear is that it’s a negative rather that a good model.
Criticisms are mainly directed at commercial Airbnb investors. The argument is that Airbnb was created as a home-sharing service, but it’s changed to accommodate commercial investments such as real estate investors like yourself are considering.
Other criticisms explore whether Airbnb New York is changing the city by driving gentrification to certain neighborhoods. The main concern with this is the possible effect Airbnb will have on local communities in the city.
The “Multiple Dwelling Law” (MDL) of New York State, among other things, dictates that an owner may not rent out a real estate property for less than 30 days unless they are present in the apartment as well. Furthermore, in 2015, New York introduced the “one host, one home” policy, which dictates that each Airbnb host, or Airbnb property owner, may not own and advertise more than one property on the home sharing website.
These laws are not easy to follow or properly maintain, especially in a city as largely dense as New York, and with a real estate market as big. Consequently, many Airbnb New York investors fail to abide by these laws and end up operating illegally, which only exasperates the problem.
So, why are we bringing all of this up?
Related: Four Things to Consider Before Purchasing an Airbnb Investment Property
So, What’s the Issue Today?
The matter of the fact is, if you’re planning on investing in Airbnb New York, you should realize that it’s not as simple as it may seem. This investment may just simply not be the most viable option for you.
At the same time, do realize that there’s great potential to invest in New York City, but you want to ensure that you’re not breaking the law as you invest. As more and more investors shift from traditional to Airbnb real estate investment, Airbnb is significantly driving up rent as well as prices of property.
Most recently, there’s been a battle between the hotel industry and Airbnb. As of early this March, each has been pushing a separate bill. New York State is trying to get Airbnb to follow existing laws for the home sharing service.
In addition, New York is also trying to pass a law where Airbnb New York hosts have to disclose addresses on the website. San Francisco has also passed this law. The law is said to help the city keep track of Airbnb hosts and their owned properties.
The bill, currently backed by Joseph Lentol, Brooklyn Assemblyman, and State Senator John Bonacic, further highlights the 30 day law, and the fact that Airbnb hosts cannot have more than one listing on the home-sharing website. The bill is also trying to enforce a registration system for Airbnb hosts to ensure the “one host, one home” policy is followed.
On the Airbnb side, Danny Glover is attempting to push the opposite bill. Glover, as well as Airbnb and its proponents in the city, argue that not only is Airbnb helping more New York city residents become more economically stable, but it’s actually leveling up the economy by ensuring hotel prices don’t surge.
What Does This Mean for Real Estate Investors?
Many are calling it a fight between Airbnb New York and the State of New York. But what this means is that if the New York State bill passes, there will be higher restrictions on short-term rental investment in the city. One fear is that this will discourage and take out real estate investors from the market. And while that is a valid point, the only investors this bill could take out are ones operating against the law set in place.
But in general, if you’re following state and city laws for Airbnb New York, you don’t have much to worry about. Yes, there may be higher restrictions and/or challenges on when it comes to real estate investing in the city, but that doesn’t counter the fact that the New York City Airbnb market is thriving, and that there’s great opportunity for investment and profit.
And once you’ve made up your mind about investing in Airbnb New York, make sure to use Mashvisor’s investment property calculator and our analytical search engine to find out where the most profitable Airbnb locations are.
You can easily find information on different real estate metrics such as CoC return, cap rate, occupancy rate, rental income, NOI, and ROI, among others. It also means that you can avoid using spreadsheets because Mashvisor can lay out all the Airbnb data for you. Is there a better time to invest?
So, Airbnb New York City investors: you better keep an eye out for the latest updates regarding this bill and regarding Airbnb New York!
Related: What Are the Best Places to Buy a Vacation Home in New York State?
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