By Tuesday, thousands of Airbnb Inc. rental properties in New York City could be suddenly pulled from the market.
The new rules, which will take effect today, require landlords to obtain a permit from the city to certify that they adhere to strict occupancy rules and building codes. But the Office of Special Enforcement is struggling to deal with a backlog of permit applications ahead of the Sept. 5 start date, according to some property owners across the city.
“The biggest frustration is how difficult it is to reach anyone in the office there,” said Ilan Rabinovitch, who has worked at Airbnb for two years and has applied to register as an Upper West Side brownie. Two rooms in a sandstone building. He said he contacted the OSE at least four times to ask for an update on his registration, to ask about average turnaround times or staffing levels, but he either didn’t hear back from Francine Vlantes O’Keeffe, the OSE’s deputy executive director, or got vague responses .
Airbnb could lose millions of dollars in revenue in one of its largest markets. According to market analyst firm AirDNA, about 7,500 devices did not meet the requirements to apply for a license, so could end up disappearing from the platform. More than half of those listings are frequently rented out, accounting for about 40 percent of Airbnb’s revenue in New York City, according to AirDNA.in a litigation Airbnb said it will generate $85 million in net revenue in New York City in 2022, about 1% of its total revenue.
For years, New York has been at loggerheads with Airbnb over a rule that prohibits most apartments from being rented out for less than 30 days without a tenant present. AirDNA estimates that only 9,500 of Airbnb’s 23,000 listings are legitimate.
The city believes the registration law is necessary to crack down on illegal rental businesses by bad actors who expose guests to dangerous living conditions, force rent increases and damage the fabric of neighborhoods. But many hosts have sided with Airbnb against the new rules, saying they rely on extra income to pay for housing in one of the most expensive U.S. real estate markets.
While the city is working through a backlog of applications, some New York City landlords have been waiting weeks or even months to learn the status of their applications.Failure to register will result in a fine and the listing will be blocked on platforms such as Airbnb Expedia Group of Companiesof Webb.
The city has so far approved only 257 of 3,250 applications for short-term rental landlord registrations, according to the New York Office of Special Enforcement Tell On August 28, travel magazine Skift rejected 72 applications and returned 479 requests for more information. Thousands more landlords have yet to apply.
Late summer flood of filings – more than half filed after judge’s ruling earlier this month Dismiss the lawsuit — Gothamist puts pressure on OSE, which had 28 employees as of mid-May, less than half of its budgeted positions report.
OSE and its watchdog, the mayor’s Office of Criminal Justice, did not respond to emailed questions from Bloomberg News about law enforcement capacity and the progress of the application’s review. In an emailed response to Rabinovich, seen by Bloomberg News, O’Keeffe said the office “reviews applications in the order they are submitted, with varying timing.”
Businesses that illegally operate short-term rentals face fines of up to $5,000, or three times the unit’s revenue. Airbnb and other rental platforms also face penalties if listings fail to pass. As a result, Airbnb will block the listing calendars of hosts who have not provided their registration numbers by the deadline and have not updated the minimum stay to 30 nights or more. An Expedia spokesman declined to comment on the rule. The company doesn’t disclose specific metrics for its Vrbo unit, but AirDNA says Vrbo owns 10 percent of New York’s short-term listings, or about 2,680, and doesn’t allow room-sharing on its site.
When asked for comment, Airbnb reiterated its contention in the lawsuit that the rules would deprive the city of substantial tourist revenue because they would deprive the city of a critical supply of alternative accommodations that help cater to hotels. Demands that cannot be met during seasonal events. New York Marathon and major holidays. While no single city accounts for more than 1.3% of the company’s 2022 revenue, New York is one of Airbnb’s top five markets with the most active listings, behind Orlando, Los Angeles and Phoenix.
“New York City is sending a clear message to the millions of would-be tourists who now have fewer lodging options when they visit New York City: You are not welcome,” said Theo Yedinsky, Airbnb’s director of global policy. “
New York isn’t the only city fighting Airbnb over its listings, and many other cities have long attempted to impose stricter regulations, with mixed results.Meanwhile, San Francisco-based Airbnb recently reported total Active listings jumped 19% Net active listings increased by more than 7 million in the second quarter from a year earlier, more than any quarter in history. Its shares are up more than 50% this year.
But even though short-term stays still make up the majority of Airbnb listings, the company has seen an increase in long-term stays as some hosts give up the fight against restrictions like New York. Bookings of 28 days or more accounted for approximately 18% of total bookings in the second quarter.More Landlords Concerned About Risk of Penalties or Legal Fees, Focus on monthly rent, Its profits may be lower, but regulation is less extensive.