Update Post: December 4, 2023 11:30 pm
You may have never walked its streets, but from seeing it so much in movies, series or on the news it seems that you could almost guide yourself through the long avenues of Manhattan. To receive, thousands of tourists choose an apartment in which to stay for four days, something that will no longer be possible, since the city council has cut the capacity of companies such as Airbnb, the king of short-term rentals. stay. A measure to try to put order in the avalanche of tourists that the city and the rental market receives.
Specifically, it was with Local Law 18, known as the Short-Term Rental Registration Law approved this September, that Airbnb has had to remove miles of homes from its catalog in New York. According to the new legislation, for stays of less than thirty days, hosts can only receive a maximum of two guests and if they themselves live in the same house. Additionally, all rentals must be registered with the city,
In 2022, New York counted 57 million tourists, a figure that the council expects to reach 61.7 million people, still below the 66.9 million people who visited the city in 2019. Although it does not require companies to leave the city, Airbnb told Reuters it considered it a “de facto ban” on its business in the city. The New York Times.
With this snip in Airbnb activity, the city wants to solve another problem that goes beyond the crowds of tourists: high rental prices. Last July, rental prices in the city reached highs with an average rent of $5,588, which represents an increase of 9% compared to the same period of the previous year and 30% compared to 2019. Prices do not stop increase since the pandemic despite the fact that the population in the city does not stop falling: New York has lost 5.3% of its citizens since the start of the pandemic, which means half a million fewer New Yorkers, according to data from the US Census Bureau from last May.
In August, the price was slightly reduced, 0.6%, but experts point out that the number of contracts is declining compared to the previous year, despite it being the high season to buy a home in the city. Meanwhile, unemployment reached its highest figure since June last June. “The market has to find its true balance, but for now it is a battle between tenants and owners,” New York real estate agency The Corcoran Group noted in a report on the city market. “Someone is going to have to give in, it’s just a matter of when,” the report added.
In this battle, the city council has chosen to get rid of one of the contingents, but it is not clear what effect the “de facto” end of Airbnb in the city will have on rents. From the city council they point out that the platform “removes housing options from New Yorkers, endangers the tourists who stay there and disturbs the quality of life of our neighbors.”
The company has defended itself by stating that “New York City’s new rules on short-term rentals are a serious blow to its tourism economy and to the thousands of New Yorkers and small businesses in peripheral neighborhoods that depend on shared use or of housing and tourism money to make ends meet.” A report on the so-called Airbnb effect in the United States in 2020 concluded that a 1% increase in listings on the Airbnb website represents a 0.018% increase in the rental price and a 0.026% increase in the sale price.
According to the consulting firm specializing in vacation rentals AirDNA, of the 38,000 homes for short-term rental that the platform offered in the city, its largest market in the United States, only 9,500 met the requirements established by the new legislation. Airbnb tried to stop it by suing the city, but the judge dismissed the petition. After the application of the measure on September 5, Airbnb supply in the city has fallen by 77%.
Homes that have abandoned vacation rentals can now opt for mid-stay or traditional rentals. According to the Inside Airbnb platform, which collects the advertisements made on the portal, short-term rentals (less than thirty days) represent 17.3% of the offer, while long stays account for the remaining 82.7%. “In some cases, Airbnb has moved a large number of its listings to longer stays to avoid the regulations and liability of short-term rentals,” the portal points out.
Another blow in the Airbnb battle
The most populated city in the United States joins a long list of cities that have decided to limit Airbnb activity to cool their rental market. One of the latest to do so has been Florence, which in June announced a ban on new Airbnb listings and other short-term vacation rentals in the city’s historic center. The Italian Ministry of Tourism itself is preparing a law that limits vacation rentals, while cities like Rome, Venice or Milan are preparing their own legislation.
In Amsterdam, hosts can only rent their home thirty nights a year, if they do not need special permission. In Portugal, new licenses have been stopped and existing licenses will be reviewed every five years. In London, hosts can only rent their property ninety nights a year without requesting a change of use.
Barcelona was the first European city to prohibit the short-term rental of private rooms and has a specialized team that detects fraudulent offers, according to the Special Urban Plan for Tourist Accommodations (Peuat)
In the United States, the number of cities that are focusing on the platform is also increasing. In addition to New York, Honolulu, Memphis or Palm Springs already had their own limitations for vacation rentals.
The company founded by Joe Gebbia, Brian Chesky and Nathan Blecharczyk in 2007 began with an inflatable mattress in a San Francisco apartment under the name Air Bed&Breakfast. Looking for a bonus, they take advantage of the fact that the city’s hotels were full during a convention of industrial designers to offer visitors a place to sleep and work, with breakfast included.
Despite the hard blow of the pandemic, when travel froze, Airbnb went public in 2020 with a valuation exceeding $100 billion. In 2022, apparently immune to restrictions in different cities, it has achieved record results: revenues of $8,399 million and its first profits in history in a full year, with $1,892 million.