Key Details:
A recent analysis by HR&A Advisors underscores the steep economic toll of NYC's aggressive short-term rental crackdown.
Since enforcement tightened in September 2023, Airbnb listings plunged by 92%, triggering an estimated $1.6 billion drop in visitor spending across Brooklyn, Queens, the Bronx, and Staten Island. Over 15,000 jobs hang in the balance, along with $573 million in worker income.
Yet, despite this seismic shift, vacancy rates stubbornly remain at 1.9%, and rents continue to climb—suggesting the policy misses its mark on housing affordability.
Our Analysis:
While aimed at addressing housing affordability, these regulations inadvertently penalize thousands of local businesses, workers, and homeowners dependent on visitor spending. Instead of benefiting New Yorkers, the policy threatens jobs and income in communities least equipped to absorb such losses.
These regulations have not led to significant changes in vacancy rates or rent reductions, which was the policies intent.
So who has benefitted from this? The hotel industry.
Hotel Average Daily Rates have risen by 6% from May 2023 to May 2024, reaching a record high of $524. This increase has limited accommodation options for visitors, particularly in areas outside Manhattan. This also concentrates tourism spending in central locations and adversely affects small businesses in the outer boroughs.
To genuinely support housing without crippling local economies, policymakers must reconsider approaches that balance regulatory compliance with economic realities faced by neighborhoods outside Manhattan.
Policymakers nationwide considering STR restrictions should use this case study to ensure they achieve desired housing outcomes without the economic collateral damage.
Source: Airbnb
