The golden years for NYC Airbnb hosts are over

• On September 5, NYC began enforcing a 2022 law that bans whole-home rentals and caps guests at two.
• Airbnb listings in September fell to 4,600, a staggering 77% drop since June.
• It's causing ripples in the housing market, prompting some owners who relied on the income to sell.

Nearly two weeks into New York City's enforcement of a 2022 law banning whole-home, short-term rentals and short-term stays with more than two guests, a particular kind of New York homeowner is feeling the squeeze.

According to real-estate agents Insider spoke with, owners of townhouses and multi-family properties in Brooklyn are among the first to react to the new short-term-rental regulations.

Compass real-estate agent Christine Blackburn told Insider she knows of someone who's listing their $4 million, six-bedroom home in Fort Greene, a neighborhood in Brooklyn. They were partially motivated to sell now that they could no longer rent out their basement unit on Airbnb.

Blackburn doesn't anticipate these kinds of owners will "flood the market," but that more owners in similar situations might see the loss of income as a tipping point to sell. Short-term-rental hosts who violate the new regulations could get fined up to $5,000 per stay.

Only 4,600 short-term listings in New York City remain on Airbnb this month compared with over 20,000 active listings in June, according to analytics site AirDNA. That's a staggering 77% drop. AirDNA, which normally includes listings from other vacation rental sites like Vrbo in its data, only included Airbnb in its latest calculations given that the platform dominated the city's short-term-rental market.

It also found that Airbnb listings for stays longer than 30 days, which would be okay under the city's new rules, jumped from 54% of all listings in August to 88% in September. It's an indication that some hosts are pivoting, while others might be pulling out altogether.

Airbnb declined to comment.

NYC homeowners who relied on hosting income are weighing their options

Compass real-estate agent Brian K. Lewis told Insider a previous client in a $3.5 million, five-bedroom Brooklyn multi-family property is stuck on how to make up the extra income from their basement unit Airbnb, which helped them cover living expenses.

They're considering moving to mid-term rentals, like renting month-long stays to doctors and nurses on medical rotations. A homeowner in Ridgewood, Queens, told Insider earlier this month about a similar plan to switch to mid-term rentals. She also hopes to capture students and interns for extended periods of time.

Lewis said buyers who previously shopped multi-family properties with the intention of short-term renting will stop looking altogether and have to redraw what they can afford.

"That buyer pool will completely dry up," he said.

New York is not the only city changing its approach to Airbnb. What to do about short-term rentals is a global question and every city has a different answer. Florence banned new short-term rentals in the historic city center, while Paris capped how many days hosts could rent. Here in the US, Dallas is moving to rezone them, which could impact where in the city they're allowed, and Philadelphia started strict new licenses.

Now, even in the early days of a crackdown, all eyes are on America's largest city and how its new rules impact the real-estate market, affordable housing, and tourism.

Are you a New York City host affected by the newly enforced regulations? Contact reporter Dan Latu at [email protected] to share your story.