New York City’s Short-Term Rental Law: A Recipe for Disaster
Billions Lost in Airbnb Visitor Spending, Especially in the Outer Boroughs
Local Law 18 (LL18) has had a devastating impact on New York City’s short-term rental market. A new report by HR&A Advisors reveals that the law has not only failed to improve housing affordability but also led to a significant decrease in Airbnb listings, causing a ripple effect throughout the city’s economy.
Before LL18 took effect, Airbnb listings made up less than 1% of the city’s total housing supply. However, after the law was implemented in September 2023, listings dropped by over 90%, resulting in an average of 80,000 fewer guests per month on the platform.
The outer boroughs were disproportionately affected, with listings decreasing from approximately 17,000 to 1,400. This decline has led to a significant decrease in visitor spending, resulting in an estimated $1.6 billion less in spending, 15,700 fewer jobs, and $573 million less in worker wages.
A Win for Manhattan Hotels, a Loss for Consumers
The hotel industry, which lobbied for LL18, has seen a significant financial benefit in the law’s wake. Since LL18 took effect, hotel prices have surged, making it increasingly expensive to stay in New York City. Hotel Average Daily Rate has risen by 6% from May 2023 to May 2024, and is expected to continue to grow as the city’s visitor numbers are projected to outpace pre-COVID figures by 2025.
LL18 Fails to Boost Housing Availability or Affordability
Despite being championed as a law to increase housing availability and affordability, LL18 has failed to achieve its intended goals. Citywide vacancy rates have remained unchanged at 1.9%, highlighting the law’s ineffectiveness in addressing the city’s housing challenges.
A Better Solution for New York City
It’s time for New York City to reconsider LL18 and find a more effective solution to its housing challenges. By repealing the law and creating a more balanced approach to short-term rentals, the city can once again welcome visitors to all corners of the city, fueling the economy and supporting residents and businesses with the tourism spending they can no longer rely on.