This election cycle’s biggest spender in municipal elections is a company that many New Yorkers probably don’t think about much at all, in part because it’s been largely regulated out of having a significant presence here: Airbnb, the giant home rentals platform. While not yet wading into the marquee mayoral race, the company has committed to pouring $10 million into other local races with the clear objective of getting policymakers to turn back some of the restrictions that largely drove the company out.
More specifically, in 2023, the City Council approved measures that among other things made it legally impossible for hosts to rent for under 30 days and required them to be present in the unit that they were renting during the guest’s stay. This all but decimated the short-term rental sector in NYC, a move that was embraced, unsurprisingly, by the Hotel Trades Council, the political heavyweight union that represents some 40,000 gaming and hospitality workers who benefit from a robust hotel sector that had been suffering from Airbnb’s expansion. The HTC is now pledging its own spending blitz of $2.5 million on local elections, including $1 million to support the mayoral candidacy of former Gov. Andrew Cuomo.
It’s worth noting that the HTC is a group representing the interest of hotel workers, not necessarily hotels themselves. This does put them in alignment when it comes to things like warding off the threat of Airbnb. That also obviously puts them at odds with hotel management when it comes to things like labor conditions; the union recently went to war over a separate initiative to constrain hotel owners. Neither it nor Airbnb have altruistic objectives in mind, though each wants to present itself as fighting for the little guy; Airbnb has often put forth often outer-borough smaller homeowners as those suffering from restrictions on rentals, while the HTC and its political allies argue that the short-term rental market cannibalizes the housing stock and evades hotel restrictions.
The actual impact of short-term rentals is mixed
Stepping back from the pure political dynamics here, I do want to talk a little about the actual impact short-term rentals seem to have on cities as a whole, particularly those that have existing housing crunches. There has been some research on all this, and it’s decidedly mixed. A Harvard Business Review article summarizing research including by its own authors found that short-term rentals do have an upward drag on affordable housing costs, but also that this impact was minimal. It’s dwarfed by other policy, zoning, and regulatory decisions made by municipal governments. Meanwhile, there were concrete benefits to visitors and hosts, with the losers being predictably the hotels. Other research has shown that the efforts to regulate short-term rentals — such as the “one host, one home” policy that cities including New York have adopted — have positive longer-term effects on rental costs and lower prices. The policy tries to limit platforms, like Airbnb, to only listing individuals who are renting out their homes, versus businesses or investors managing multiple properties.
These studies would seem to point to the ideal environment being one where the short-term rental market functionally exists but is heavily regulated, perhaps a bit less so than the de facto ban that the city has imposed. The meta issue here is also that rentals from Airbnb (and competitors like VRBO) are not all alike. Most people could probably agree that a family putting up a spare bedroom is a fundamentally different practice than a company that operates a multi-unit building like a hotel routed through Airbnb. The latter practice does present some valid additional issues, such as allowing these pseudo-hotels to skirt regulations for hotel operations and taking entire non-
This seems to be a more acute issue in mid-size cities with strong tourist appeal and less long-term housing supply crisis than New York – picture New Orleans or Nashville, perhaps. That model is hard to replicate in NYC, at least in part because there just aren’t that many habitation-ready buildings with multiple vacant units that can be jury-rigged into a hotel of sorts. Nonetheless, a 2018 report from then-Comptroller Scott Stringer — now himself also a Democratic primary candidate for the mayoral race — estimated that Airbnb alone accounted for a staggering 9.2 percent of citywide rental rate increases from 2009 to 2016, before the city imposed significant constraints on that short-term rental sector. These impacts were not evenly distributed, though, and were particularly acute in already-gentrified high-income neighborhoods like Chelsea and Williamsburg, which, according to the report, each had Airbnb listings reach over 4 percent of their neighborhood residential stock.
Why all the lobbying now?
The big money is coming in part because the City Council is now considering somewhat rolling back its earlier restrictions on rentals. Councilmember Farah Louis last year introduced a bill that would relax some of the requirements by allowing homeowners to, among other things, rent their homes for shorter durations, not need to be present during stays, lock parts of the household, and rent to four guests instead of the current limit of two. The proposal and the broader question of whether to relax these restrictions has been controversial to say the least, with various candidates rallying for or against it; Comptroller Brad Lander is in opposition while Council Speaker Adrienne Adams, a Democratic mayoral contender, has supported the bill, for example.
There’s also, I think, a wild card on the horizon that neither the hotel nor the Airbnb people really want to acknowledge, and that’s the potential for a downturn in New York City tourism altogether. City officials are already expecting millions fewer foreign tourists than earlier estimates. I would not really expect that trend to do anything but accelerate as the Trump administration continues to wage open war on immigrants and visitors alike. Recently, it announced that it would begin stringent vetting of would-be international students’ social media presence, a week after officials moved to prevent Harvard from being able to enroll international students at all. Stories of green card holders and international visitors being cuffed and sent to ICE detention facilities don’t have to be particularly numerous to be narrative-shaping.
As for domestic tourism, we’ve seen travel slow as people around the country dim their economic prospects, and there’s a real threat of a looming recession. Tariff negotiations have been halting and chaotic, and we’re probably a few weeks out from retailers running out of stocked inventory on all manner of products that are now subject to heavy tariffs. In the end, it might turn out that the hotel folks and the short-term rental companies find themselves with one thing in common: lower demand overall.bly a few weeks out from retailers running out of stocked inventory on all manner of products that are now subject to heavy tariffs. In the end, it might turn out that the hotel folks and the short-term rental companies find themselves with one thing in common: lower demand overall.
