New York: the figures one year after Law 18

A year has passed since New York City imposed the famous Local Law 18, which effectively banished short-term rentals from the city. The evidence shows that the only winners from this law were the hoteliers. Neither affordable housing was achieved, nor did the prices of long-term rental homes go down.

These figuress are highlighted in Airbnb’s account of the first year since New York‘s Act 18 was established. Based on this finding, Airbnb is calling on New York authorities to reevaluate the law and consider amendments that would at least allow homeowners to host guests again.

“It’s time for New York to re-evaluate Local Law 18 and consider amendments that would at least allow homeowners to accommodate visitors again. By repealing parts of the law, the city can increase the supply of accommodations for consumers, support hosts and revitalize local businesses that depend on tourism dollars. A more sustainable, reasonable and fair model benefits residents, visitors and the broader community – ensuring that regulations support, rather than stifle, community and economic development.” ~ Theo Yedinsky, Vice President of Public Policy at Airbnb

New York after Law 18

According to CoStar data, whilst the national average rise in hotel rates in the 12 months after the introduction of the New York Law 18 was 2.1%, average hotel rates in New York City during the same period rose 7.4%.Long-term lease rent rose by 3.4% in the first 11 months of the Act, according to StreetEasy, confirming that there are other factors driving up rental prices.

For the first time in history, the average asking price of rent in midtown Manhattan last year reached a peak of $5,000.

Increases in rent in New York City since the law went into effect continues to outpace nearby cities such as Boston, Chicago and Washington, D.C. Meanwhile, vacancy rates in New York City have remained essentially unchanged at 3.4% since the law went into effect, according to Apartment List. Apartment vacancy rates continue to lag significantly behind Chicago, Boston and Washington, D.C.

“Local Law 18 favored big corporations at the expense of middle-class citizens and local small businesses. With rental prices rising and many families relying on short-term rentals for additional income, the law has created financial pressure on individual hosts and caused a reduction in revenue for local businesses that thrive on tourism.” ~ Manuel Lebron, CEO and Founder of the Dominican American Chamber of Commerce

The outer boroughs lack of accommodation 

With most of New York City’s hotels concentrated in the middle of Manhattan, Law 18 significantly reduces the available accommodation options in other areas, limiting where travelers can stay and where and how they spend their money.

In much of the city, Airbnb listings served areas with no hotel options. Prior to Law 18, Airbnb listings were geographically distributed across all five boroughs in New York City, as opposed to hotels, with less than half of Airbnb listings in Manhattan, while Brooklyn and Queens hosted 37% and 13% of Airbnb listings, respectively.

In 2023, a typicalAirbnb guest in New York City spent an average of about $260 per day, with over a third of that spending near the location of the apartment they were staying in . The lack of available short-term rentals disproportionately affects other areas, leading to reduced stays and reduced spending outside of Manhattan.

Organizations such as the Brooklyn Chamber of Commerce have sounded the alarm about the law’s uneven impact. In a city where the cost of living continues to rise, the loss of income has devastated those who rely on home sharing to cover their basic expenses, as well as small businesses that depend on tourism revenue.

“The reality proved to be a major blow to tourism and the local Brooklyn economy without the corresponding increase in rental availability promised by the government. We hope the City Council will carefully review the law to support local homeowners and the economic development of communities in other areas (outside of Manhattan).” ~ Randy Peers, President and CEO, Brooklyn Chamber of Commerce, in an opinion piece in the Brooklyn Paper