Short-Term Rentals

A detailed analysis and set of recommendations for how government should adapt to a housing market that includes the fast-growing use of short-term rental platforms.

Over the last decade, short-term rentals have boomed across the globe due to the accessibility and ease of online booking platforms such as Airbnb. For visitors, it is easy access to overnight stays in cities around the world. For landlords, neighbors, and policymakers it is unfettered use of what can be a scarce resource in a highly regulated housing market.

Cities around the world are debating the impact of short-term rentals on their housing markets and wrestling with public policy to deal with them. CHPC contributes to this debate in New York City and supports pragmatic solutions that address the negative effects of short-term rentals for housing.

On Wednesday, March 22, CHPC held a discussion about short-term rentals at La Nacional-Spanish Benevolent Society with two very special guests: former San Francisco Supervisor David Campos and former Austin Council Member Chris Riley. The event served as the launch of Sleeping Around, a new report by CHPC that examines short-term rentals in New York City and makes new policy proposals to address some of the problems these rentals can cause for housing. One of CHPC’s proposals would create a licensing scheme to permit short-term rentals in specific circumstances. Campos and Riley were instrumental in developing similar licensing systems in San Francisco and Austin, respectively, and provided valuable insights into the lessons learned in those cities.

Since 2011, the New York State Multiple Dwelling Law has banned rentals of less than 30 days in most apartment buildings if the primary resident is not present during the rental. This ban, however, has been largely ineffective and short-term rentals have flourished in spite of it. CHPC’s proposal to license some short-term rentals stems from the acknowledgment that existing policy has failed to curtail short-term rentals and that a new policy path forward is necessary. Licensing would bring above-board many short-term rentals that are already taking place and address the deleterious effects they can cause for housing. Chris Riley discussed how the passage of licensing legislation in Austin responded to a similar attempt to find a middle road that tackled the quality of life concerns caused by short-term rentals there without banning them altogether.

The licensing proposal in Sleeping Around would allow the primary resident of a unit to apply for a license to offer their unit for rental periods of less than 30 days. Limiting licenses to primary residences would address concerns that short-term rentals cause units to be removed from the housing market and exacerbate New York City’s housing shortage. The proposal would also require that renters obtain consent from the property owner in order to obtain a license. This would help to ensure that a tenant does not breach their lease if they offer short-term rentals and that all other applicable rules are also followed, for example co-op by-laws and regulatory agreements for affordable housing.

Campos and Riley pointed out during the discussion that licensing in San Francisco and Austin has been difficult to enforce without the cooperation of booking platforms, such as Airbnb. Efforts to hold platforms accountable for listing unlicensed rentals have run into the Communications Decency Act (CDA), which exempts platforms from responsibility for the ads that users post on their websites. Soon before leaving office earlier this year, Campos introduced legislation in San Francisco that holds Airbnb and similar platforms responsible for accepting booking fees for unlicensed rentals. This legislation regulates the business conduct of booking platforms, rather than their content, and cannot be challenged on CDA grounds. Similar legislation would likely be required in New York to make a licensing system here enforceable.

A diverse audience attended the event, including Airbnb representatives, staff from various city agencies, housing advocates, and staff representing elected officials. CHPC will continue to engage these and other parties in a fruitful discussion about how best to improve policies affecting short-term rentals.

Featured Impact
Sleeping Around: Short-term Rentals and Housing in New York City

Today, CHPC released Sleeping Around, an exploration of short-term rentals and housing in New York City. The study discusses how short-term rentals affect New York’s housing market and proposes policy reforms that could allow this popular practice to continue while mitigating its negative impacts on housing. The report also explores the data that is available (and mostly unavailable) about short-term rentals and includes a guide, current as of March 2017, to the different laws that regulate short-term rentals in New York City.

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