If you’ve been following the local news recently you may be aware of the current spat between Airbnb and NYC’s Comptroller Scott Stringer. In a report released in May, Stringer stated that Airbnb is responsible for nearly 10% of rental increases in NYC between 2009 and 2016. The home sharing site has been on the defensive since then and even answered Stringer’s report with an open letter from Airbnb’s head of global policy. One thing for sure, the controversy over the exact impact of Airbnb on the NYC housing market is sure to continue.
All that said, homeowners shouldn’t let the controversy put them off using the site. It can be a valuable source of income, and it’s helped many NYC residents avoid foreclosures. Just make sure you do it legally. The new requirements on home sharing have been a cause of confusion for older users and newbies alike. Here’s what you need to understand about listing your NYC apartment on Airbnb.
So what’s the deal?
The reasoning for the new laws is that most Airbnb rentals were found to be violating both state and local laws. Many building owners, it appears, were renting out multiple units at the same time. This effectively turned them into hotels while allowing the owners to avoid paying for a pesky hotel license. In response to this, Airbnb no longer permits hosts to have more than one listing at the same address. But hosts can still have listings at different addresses.
Under the NY State Multiple Dwelling Law (MDL), which covers buildings with three or more units, rentals of fewer than 30 days are prohibited. Unless a permeant resident is present for the time, the guest is staying. Take note; this permeant resident must be a “natural person.” Meaning a human being, which eliminates corporate hosts. To be legal, these units must be occupied by the same person or family for no less than 30 consecutive days.
To summarize, the MDL does not prohibit:
- Hosted short-term rentals where the human host is present
- Short-term rentals, whether hosted or not, in private dwellings such as one and two family homes
- Rentals of 30 days or more
Fines for MDL violation
The Mayor’s Office of Special Enforcement is responsible for enforcing the MDL. They respond to complaints and can impose fines for violations of up to $2,500 per day. Along with that, NYC enacted a new law in 2016 making it illegal to list a short-term rental prohibited by the MDL. This applies to sites like Airbnb. A first-time violation means a fine of $1,000, for the second, $5,000, and for the third or more, 7,500
Even if you check out on the MDL, there are still other laws you must be aware of. Make sure you also check off these boxes before listing that room.
- NYC Certificate of Occupancy – in NYC, all residential buildings must have a certificate of occupancy. Any change in the status of the building from long-term residential to short-term transient will require an amended certificate. Once filed an inspection must be undergone before approval.
- Rent Control Laws – those in rent controlled or stabilized housing may not have permission for short-term renting. Contact your local rent board first as violations could lead to an eviction.
- Zoning Laws – check the NYC Zoning Code to see if you live in an area in which transient (short-term) rental buildings can be located.
- Lease Restrictions – lease agreements for market-rate renters usually prohibit subletting of any kind without permission from the landlord. For co-ops and condos, it’s the same. In the case of cooperatives, it’s a very long shot getting permission for this.