By: TPS Staff

New York City is known as one of the most vibrant cosmopolitan cities in the world, but the housing crisis is at an all time high. Rent is climbing faster than wages, with the average rent exceeding $4,000 a month, while the median household income is only $81,600. When combined with the dwindling supply of available apartments, it creates an urgent problem that requires immediate attention. While the housing crisis has been a longstanding issue dating back to the 1970’s, various factors over time including cuts to public services, disinvestment in low-income neighborhoods, and the 2008 housing crisis, has made the situation drastic. The consequences are severe: people are being driven out of the city, apartments are overcrowded, and shelters are becoming overwhelmed.

Click here to learn more about the history behind the different causes of the housing crisis and why the landscape is failing today.

Over the years, the city has introduce several initiatives, laws, and restrictions in an attempt to address the housing shortage. These include zoning reforms, rent caps, tax incentives to support development, and even plans to convert vacant office buildings into residential units. Despite these efforts, the effects of unaffordable housing extend far beyond just rent hikes. The city’s local businesses, essential workers, and entire communities are suffering as the fabric of the city begins to fray.

Local Law 18, enacted in 2022, is one such attempt to regulate short-term rentals. The law requires hosts to register with the Mayor’s Office of Special Enforcement (OSE) in order to legally rent out their properties. To qualify, hosts must meet certain criteria and if hosts don’t comply, platforms like Airbnb may not process payments. The law also mandates that short-term rentals can’t be less than 30 days unless the host is present during the stay.

While the intent of Local Law 18 was to curb disruptive short-term rentals and protect the housing supply, the results have been mixed. The primary goal was to remove entire units from the short-term rental market and return them to long-term residents. However, it appears that the impact on affordability has been minimal. Although according to city officials, only about 40,000 apartment vacancies exist, and freeing up any part of the market could help. Many hosts are circumventing the law by renting their properties for the minimum 30-day period without any renters residing in the unit year-round, meaning these units still aren’t available for long-term renters.

Since the introduction of Local Law 18, the hotel industry appears to have reaped the most significant benefits. There’s been a noticeable increase in hotel visitors, accompanied by a 7% rise in average room rates. This shift has sparked both the Hotel Trades Council (Hotel Union) and Airbnb pouring millions into local elections to support candidates who align with their respective agendas.

Looking ahead, the City Council is considering a bill to ease some of the restrictions imposed by Local Law 18, potentially allowing one and two-family homes to rent for fewer than 30 days. At the same time, Airbnb is positioning itself for future growth, with plans to invest hundreds of millions in expanding its services. The company is eyeing new sectors, including car rentals and partnerships with grocery and cleaning services. Additionally, Airbnb is exploring features like a paid service that could allow hosts to prioritize their listings.

As the debate continues over short-term rental regulations, one thing is clear: these policies alone will not be enough to solve the housing crisis. More substantial and targeted action is needed to prevent New York City from becoming unrecognizable.