New Rules, New World: Short-Term Rental Laws and Your Airbnb Business

New York: Regulation to the Extreme

Airbnb burst onto the scene rapidly and loudly, in many people’s view, and as exciting a development as this was for many entrepreneurs, it represented significant challenges to housing boards, who needed to pivot quickly to decide how they were going to respond to and handle short-term rentals. Previously rare, short-term rentals are today a major source of opportunity for income, but if you are going to set yourself up for long-term success in the field, you need to be aware of the fact that laws and regulations are constantly changing. Let’s look at what this trend means for the two largest rental markets in the US.

Los Angeles: The Registration System

Take Los Angeles, for example. One of the two largest rental markets in the country, they have taken steps to drastically limit Airbnb’s within the city, instituting a registration that would prevent short-term rentals at a high frequency. As stated in the Los Angeles Time, “The L.A. ordinance requires platforms such as Airbnb and HomeAway to regularly hand over information about their bookings, a requirement meant to help the city enforce its rules about how often people can rent out homes for short stays“. Basically, this registration will make it easier for Los Angeles to tell Airbnb business owners when and how often they can make their properties available on the platforms.


What It Means

While Airbnb has pushed back against this ordinance, arguing that there is no system in place for it yet, it seems bound to come into force sooner rather than later. If you are in the Los Angeles area, you should look into the specific rules that apply to your property – and know that Airbnb is passing on information about your rental habits to the people who can penalize you for breaking said rules.

New York: Regulation to the Extreme

New York, the other of the two largest rental markets in the country, has outlawed Airbnb on a large scale. There are 50,000 rental listings in the city, and despite the power that large property owners may hold, they have failed to win over the level of short-term rental freedom that we see in other major metro areas. Instead, “Up to 72 percent of the private, short-term New York City rentals analyzed over that time period were illegal, and Airbnb’s presence in the city significantly cuts into the long-term rental housing market“. This was according to a report put out by the New York attorney general, who has been strict about short-term rentals in general.


New York Regulation to the Extreme


What It Means

If you are thinking about purchasing a property in New York to launch your short-term rental business, you need to look closely at the details in order to figure out if there are any laws that or zoning issues that will get in your way. Because these laws and issues are so widespread, the odds are high that New York is not the place for you to work out your entrepreneurial muscles.

Isolated Issue?

We know that New York and Los Angeles lead the way, and while there are still plenty of cities that are amenable to Airbnb businesses, you should do your research beforehand.

Consider these cities, which Forbes has called the five most profitable for Airbnb businesses:

  1. New Orleans
  2. Nashville
  3. Philadelphia
  4. San Antonio
  5. Atlanta

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