- NYC has imposed $16.3 million in fines as a result of enforcing Local Law 18, which targets illegal short-term rentals.
- Significant cases include a $845,000 settlement with Mega Home and broker Katherine Cartagena, and a $1.2 million fine against LuxUrban Hotels.
- The enforcement has drastically reduced short-term rental listings by over 80%, with a consequential surge in hotel demand and profitability.
Local Law 18, known as the “Airbnb ban,” has substantially impacted New York City’s short-term rental market, resulting in significant fines for landlords and boosting the lodging industry, as reported on The Real Deal.
Cracking Down Hard
NYC has already netted $16.3M from 25 settlements linked to Local Law 18 violations. So far, the new law is serving as an effective deterrent, pushing hosts to comply with stricter citywide regulations.
Landlords are also facing hefty penalties. MegaHome already settled for $845K after profiting $2M from illegal short-term rental conversions. LuxUrban Hotels also received a $1.2M fine for illegal short-term rentals in Manhattan and Brooklyn, although the case has yet to be settled.
Enforcing Local Law 18 has resulted in an 80% drop in short-term listings in NYC. By October, short-term rental units had plummeted to 3K, with only 417 in the registration process. Meanwhile, the surge in applications from 1.34K to over 6.1K over the same period indicates that landlords realize Mayor Adams isn’t playing around.
Hotel Holiday
Conversely, the local hotel sector has thrived under these new regulations. By year’s end, hotels in New York City saw a 10% year-over-year increase in average daily rates, significantly outpacing the national average increase. This surge in demand and profitability for hotels underscores the shifting trends in New York’s accommodation market following the Airbnb restrictions.
Why It Matters
NYC has always served as a benchmark for the rest of the CRE industry, which is why the repercussions of Local Law 18 will likely reverberate across the country. Given how effective the new law has been in such a short timeframe, other cities may soon follow suit. Landlords and investors in short-term rental properties should prepare to face heightened regulatory scrutiny in the coming years.
