Short-Term Rental Bans: New York City’s Local Law 18 One Year Later

It has been over a year since New York City began enforcing Local Law 18, a legislative move that effectively banned the majority of short-term rentals on platforms like Airbnb and Vrbo. For travelers, the city has fundamentally changed. The days of finding a budget-friendly studio apartment in the East Village for a weekend trip are largely over.

We examined the market data from the past 12 months to assess the real-world impact of these strict regulations. The result is a travel environment defined by record-high hotel prices, a surge in demand for accommodations in New Jersey, and a nearly extinguished market for legal apartment rentals.

The "Airbnb Apocalypse": By the Numbers

Local Law 18, enforced by the NYC Office of Special Enforcement (OSE), requires hosts to register with the city. It also imposes strict rules: hosts must be present during the stay, and there is a cap of two guests, regardless of the size of the home. This effectively outlawed “entire place” listings.

The impact on supply was immediate and drastic.

  • Listing Collapse: Prior to September 2023, there were roughly 22,000 short-term rental listings in New York City. By early 2024, the number of verified, legal listings dropped to fewer than 3,000.
  • The Shift to Long-Term: Thousands of listings did not disappear from the internet but rather converted to long-term rentals. Hosts switched their minimum stay requirements to 30 days or more, which falls outside the jurisdiction of Local Law 18.
  • Black Market Emergence: A secondary market has appeared on platforms like Facebook Marketplace, Craigslist, and WeChat, where unverified hosts list apartments to avoid OSE detection. These bookings come with zero consumer protection for travelers.

Impact on Hotel Prices and Availability

The primary argument for the ban was to alleviate the housing crisis for locals. However, the immediate consequence for visitors has been a sharp spike in hotel costs. With their biggest competitor—short-term rentals—kneecapped, hotels regained pricing power.

Record-Breaking Room Rates

According to data from CoStar, a provider of commercial real estate information, New York City hotel prices have surged.

  • Price Increases: In the first year following the ban, the Average Daily Rate (ADR) for NYC hotels climbed significantly. During peak seasons (holidays and the US Open), average rates frequently exceeded $300 to $350 per night for standard rooms.
  • Supply Constraint: The price hike is not just due to lack of Airbnbs. It is compounded by the fact that roughly 16,000 hotel rooms in the city have been taken offline to house migrants. This reduction in inventory, combined with the elimination of short-term rentals, created a supply bottleneck.

Occupancy Rates Remain High

Despite the higher prices, travelers are still coming. Hotel occupancy rates have remained consistently high, hovering around 82% to 87%. This high occupancy emboldens hoteliers to maintain high price points, as there is little incentive to offer discounts or last-minute deals.

The "Jersey City Effect"

With Manhattan and Brooklyn becoming prohibitively expensive for budget travelers, demand spilled over the Hudson River.

  • Jersey City and Hoboken: These cities have seen a surge in Airbnb bookings. Since they operate under different municipal laws than NYC, “entire place” Airbnbs are still viable options there.
  • Commuter Tourism: Visitors are increasingly booking stays near PATH train stations in New Jersey. While this adds commute time (typically 20-40 minutes to midtown), it often saves travelers 30% to 50% compared to staying in a Manhattan hotel.

What This Means for Your Next Trip

If you are planning a visit to New York City in 2025, you must adjust your booking strategy. The “spontaneous weekend trip” is now much more expensive to execute.

1. Book Early or Pay Premium

The window for finding reasonable hotel rates has closed significantly. Booking three to four months in advance is now standard practice to secure a rate under $300/night in popular boroughs. Waiting until two weeks before your trip will likely leave you with options exceeding $500/night or forcing you into lower-tier accommodations near the airports (JFK or LaGuardia).

2. Verify Your Airbnb

If you do find a short-term listing on Airbnb in NYC, look for the registration number.

  • Legal Listings: A legal listing will display a registration number issued by the city. It will also specify that you are renting a room, not an entire apartment, and the host will be present.
  • The Risks: If you book a listing that claims to be an “entire apartment” for a weekend, you are likely booking an illegal unit. The platform may cancel these bookings at the last minute if the listing is flagged by the city, leaving you stranded.

3. Consider “Apart-hotels”

A small sector of the market that survived the ban includes licensed “apart-hotels” or corporate housing providers like Sonder or Mint House. These operate with hotel licenses but offer apartment-style amenities (kitchenettes, living areas). They are fully legal but tend to price competitively with high-end hotels.

Frequently Asked Questions

Is Airbnb completely banned in New York City? No, it is not completely banned, but it is heavily restricted. You can still book a stay if the host is present in the unit, the stay is for fewer than two guests, and the host is registered with the city. You can also book entire apartments if the stay is for 30 days or longer.

Are hotel prices expected to drop soon? It is unlikely. New York City recently approved a special permit requirement for new hotels, which effectively limits the construction of new hotel supply. With supply capped and Airbnb restricted, prices will likely remain high for the foreseeable future.

Can I stay in an Airbnb in Brooklyn? The rules apply to all five boroughs: Manhattan, Brooklyn, Queens, The Bronx, and Staten Island. The restrictions in Brooklyn are just as strict as they are in Manhattan.

What is the penalty if I book an illegal Airbnb? The legal and financial penalties fall on the host and the booking platform, not the guest. However, the risk for the guest is instability. Your reservation could be cancelled without notice if the city shuts down the listing before your arrival.