Real Estate Forums

1. Forums
2. Investing in a Vacation Rental Property
3. Taxes
4. Judge dismisses Airbnb lawsuit against New York City short-term rental law

Maureen Salahshoor Denver, CO

September 29, 2023

A New York Supreme Court judge has dismissed a lawsuit filed by Airbnb and short-term rental (STR) hosts over New York City’s latest STR law. The ordinance is scheduled to go into effect September 5, 2023.

According to the New York State multiple dwelling law, short-term rentals are only allowed in most multifamily buildings if the permanent resident lives in the unit while guests are staying there, but it’s been difficult for the city to enforce that law. The new ordinance was passed in January 2022 to address illegal STRs and concerns about their effects on affordable housing.

The city law requires hosts to obtain a short-term rental registration number and include that number in any advertisements. The city will only issue registration numbers for hosts who permanently live in their short-term rental property and are renting out rooms, not the whole property. Operators must own the property, or, if they are tenants, prove they are allowed by the owners to rent the property for short terms. Hosts must also disclose who else lives in the property. Rent-controlled or city-subsidized buildings or public housing are not eligible for STR registration.

Airbnb claimed the measure amounts to a “de facto ban” on STRs and that the company would lose 95% of its $85 million revenue from New York City listings.

Supreme Court Judge Arlene P. Bluth said the city’s rules “make perfect sense” and the registration requirement is not an “overly onerous obligation” to hosts and STR marketplaces. 

“To be sure, these rules will likely not be perfect,” Bluth explained. But the law addresses a problem identified by city officials — “the continued prevalence of illegal short-term rentals,” she said.

Out of the approximately 40,000 New York City STRs listed on Airbnb, about 25% are regularly booked. From 2017 to 2021, the city received almost 12,000 complaints and issued more than 15,600 violations related to illegal short-term rentals.   Click to read more