Airbnb: the city of NY deals a big blow to its business model

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Airbnb has lost the legal battle with New York City, which has declared war on vacation rentals. This threatens part of the $77 million in annual revenue the accommodation-sharing platform made in 2022.

New York City has some of the strictest restrictions on this type of accommodation. Basically, it prohibits rentals of most apartments for less than 30 days without a tenant present, and estimates that almost a third of the 29,000 short-term rentals are offered illegally.

Several cities are in an open fight against short-term rentals. In June this year, Dallas blocked vacation rentals in certain residential areas, while in 2021 Barcelona banned all short-term rentals in private accommodation.

The case of New York

A US judge has dismissed the platform’s lawsuit against restrictions approved by city officials against this rental model, where there are currently 20,000 apartments and houses offered on its website.

According to Wall Street Journal, Manhattan state court dismissed the suit, saying it was “rational” for the city to adopt drastic measures to combat the proliferation of illegal offers and the increase in the price of conventional rentals.

Airbnb, meanwhile, calls the regulatory change a “de facto veto” to its business. Its director of global policy, Theo Yedinsky, warns that this will deal a major blow to tourism, with a full impact on residents of non-central neighborhoods “who depend on house-sharing to make ends meet”.

What the new law provides

The new law, which prohibits the rental of entire apartments for less than 30 days, will come into force on September 5 and will mean the virtual disappearance of the Airbnb business model in one of the most visited destinations on the planet.

Once the new regulations come into effect, rentals of less than 30 days will only be permitted if the host resides in the listing and hosts no more than two visitors. Similarly, owners must register with an office authorized for this purpose, which must authorize their activity.

Indeed, New York City Municipal Law 18, which goes into effect next month, requires residents of the city who wish to rent a room or apartment to first register with the Office of New York City Special Enforcement (OSE) (at City Hall), and certify that they will do so in accordance with what Airbnb calls “the regulations contained in the various legal codes that govern short-term rentals. term “. Violators of the law face a civil fine of up to $5,000 for each violation.

Catherine Mills Avatar