Prevalence of Short-Term Rentals in Lower Manhattan Drops as New Law Takes Effect
The rollout of the City’s Local Law 18 (also known as the Short-Term Rental Registration Law) appears to be having an impact on the market dynamics of Lower Manhattan housing. The measure requires short-term rental hosts to register with the Office of Special Enforcement, creates a voluntary Prohibited Buildings List in which such stays are banned by landlords or co-op and condo boards, and forbids online homesharing services (such as Airbnb) from processing transactions for unregistered short-term rentals.
Local Law 18, which was enacted in 2022, but became effective last month (after a suit by Airbnb to stop it was dismissed), aims to address widespread complaints about transients, tourists, and groups of partiers appearing in otherwise quiet residential buildings.
According to data from the watchdog group Inside Airbnb, between August and September of this year, short-term rentals offered by the online booking platform dropped by 23.1 percent in Battery Park City, 27.3 percent in the Financial District, and 70 percent in Tribeca.
Data from the Office of Special Enforcement indicates that more than 120 apartment towers in Lower Manhattan have registered with the Prohibited Buildings List, but metrics from Inside Airbnb show that 200-plus buildings south of Canal Street are still listed as offering short-term stays. At least some of these current listings also appear to be located at addresses on the Prohibited Buildings List.
A pair of studies conducted in 2018 quantified the local impact of short-term rentals. A report from the office of the City Comptroller indicated that Lower Manhattan residents who leased (rather than owned) their apartments were collectively paying more than $49 million per year in extra rent as a result of price pressures caused by Airbnb.
A separate report from a team of researchers in the School of Urban Planning at Canada’s McGill University found that diverting apartments for use as short-term rentals both increased rents and decreased the available supply of dwellings. More specifically, the report (which was commissioned by the Hotel Trades Council, a branch of the AFL-CIO that represents hotel and gaming workers in New York and northern New Jersey) noted that in Lower Manhattan, Airbnb shrank the pool of available apartments by more than 1,000 units.