New York City is the nation's largest short-term rental market, facilitated by hosting websites such as Airbnb, VRBO, FlipKey, Booking.com, and others. This is understandable given the high cost of hotel rooms in the city. However, New York City has some of the toughest short-term rental restrictions in the county. Indeed, most short-term rentals are illegal in New York City. Stiff fines have been enacted in an attempt to halt illegal rentals. And Airbnb does not permit hosts to have more than one listing at any single address in New York City (but hosts can have listings at different addresses).
Short-term rentals can be unhosted or hosted. With an unhosted rental, the entire dwelling unit is left vacant for the short-term guests to occupy. The New York State Multiple Dwelling Law (MDL) establishes the standards for all buildings containing three or more dwelling units. The MDL flatly prohibits unhosted rentals of less than 30 days in "Class A" multiple dwellings—buildings occupied by three or more families living independently. Class A multiple dwellings can be used only for "permanent resident purposes"—this means that the units in such dwellings must be occupied for at least 30 or more consecutive days by the same person or family. (MDL, Article 1, Sections 4-7, 4-8.a.) Thus, you cannot rent out an apartment in a "Class A" multiple dwelling for less than 30 days, unless a "permanent resident" is present during the entire rental period—a "shared space" rental. Such a permanent resident must be a "natural person"—that is, a human being; this eliminates corporate hosts.
The MDL is enforced in New York City by the Mayor's Office of Special Enforcement (OSE). The OSE can impose penalties for violations of the MDL of up to $2,500 per day. The city has also obtained court orders barring building owners from engaging in prohibited short-term rentals. The OSE responds to complaints and has obtained some listing data from Airbnb. A Homesharing Surveillance Ordinance that would have required Airbnb and other short-term rental platforms to provide personal data to the OSE for all New York City hosts has been blocked by the courts, but the litigation is ongoing.
In addition, New York City law makes it illegal to advertise a short-term rental that is prohibited by the MDL. This includes listing such rentals on Airbnb and other online short-term rental platforms. Fines for violations range from $1,000 for the first violation, to $5,000 for the second, to $7,500 for three or more violations. (N.Y.C. Admin. Code Sec. 27.287.1) It appears that such fines can be levied both on individuals hosts and on Airbnb or other rental platform. Airbnb filed suit in court to stop implementation of this law, claiming it violates the free speech guarantee of the First Amendment. New York announced it would not attempt to enforce the law until the suit was resolved.
The MDL does not prohibit:
However, all such rentals could violate various other laws.
All residential buildings in New York City must have a certificate of occupancy that declares the legal use and occupancy of the building. A change of occupancy from long-term residential to transient rental use requires amendment of the certificate. (N.Y.C. Admin. Code Sec. 28-118.3.1) You can look up your certificate of occupancy at the New York City Department of Buildings website. An application must be filed and the unit undergo inspection by the city to make sure it meets the occupancy standards for such use. This would include compliance with the New York City fire and building codes which impose more stringent safety requirements on buildings that are used for transient residential occupancy. Violations could subject a building owner to fines.
Any prospective host who lives in rent controlled or stabilized housing should first determine if the short-term rental of the dwelling unit is permitted. Violations of rent control/stabilization rules could lead to fines or even eviction. Even if short-term rentals are allowed, there are limits on how much hosts who lease rental controlled units may charge.
The New York City Administrative Code contains rules for rent-stabilized (sections 26-501 through 26-520) and rent-controlled (sections 26-401 through 26-416) housing. Review these rules carefully and contact your local rent board for further guidance. Visit the New York City Rent Guidelines Board website for more information on rent control and rent stabilization issues.
The New York City Zoning Code establishes the areas in which transient rental buildings can be located. Violations of zoning laws can lead to substantial fines. Chapter two of the zoning code contains definitions of important terms such as what constitutes a "hotel."
Residential leases typically prohibit tenants from subleasing their units without the landlord's permission. Tenants who violate their leases by engaging in unauthorized rentals—short-term or otherwise—could face eviction. Tenants should check their leases and talk to their landlords before engaging in any short-term rentals.
New York City coops prohibit short-term rentals. Condominium homeowner associations (HOAs) have the legal right to ban short-term rentals if they want to. (Four Brothers Homes at Heartland Condominium II, et al. v. Gerbino, 262 A.D.2d 279 (1999), 691 N.Y.S.2d 114.) Condo HOA's also have the option of limiting such rentals rather than banning them outright. Violations could lead to fines or other penalties imposed by the coop or condominum HOA.
Hosts who engage in legal rentals in New York City may be required to obtain a special license or permit to operate a business in the City. For more information, visit New York City's new business portal, business regulation finder, and read the applicable sections of the New York City Administrative Code.
In addition, New York State and New York City each impose various taxes on hotels. These include a New York City hotel room occupancy tax, New York State sales tax, New York City sales tax, and the New York State hotel unit fee daily tax. Short-term rentals through Airbnb or other rental platforms may be subject to some or all of these taxes. Airbnb and other rental platforms do not collect or remit such taxes for hosts in New York City, thus they must do so themselves. Information about hotel sales taxes is available on the New York State Department of Taxation's website. Information about NYC hotel occupancy taxes is available on the City's website.
Need a lawyer? Start here.