New York City Short-Term Rental Rules: What Investors Need to Know

New York City has some of the strictest short-term rental rules in the country. Local Law 18 took effect in September 2023, and it changed what investors can plan on. If a deal only works as an Airbnb inside the five boroughs, it probably does not work.

What Local Law 18 requires

• Registration. Every short-term host must register with the Mayor’s Office of Special Enforcement, and only the permanent occupant of the home can register it.
• The host lives there. A short-term rental is legal only when the host lives in the same home as the guests and the guests have access to the whole unit.
• Two guests at most. No more than two paying guests at a time, not counting young children.
• No whole-home rentals under 30 days. Renting out an entire house or apartment for less than 30 days is prohibited, whether the owner lives in the building or not.
• Buildings can opt out. Registration is refused for rent-regulated units, public housing and buildings whose owners have put them on the prohibited buildings list.

What it means for an investment property

An investor who does not live in the home cannot legally rent it out by the night. That is why we underwrite New York City rentals on long-term rent, using the lease or the market rent in the appraisal.

Rentals of 30 days or more

Stays of 30 days or longer are not short-term rentals under the law. Furnished rentals of a month or more, for traveling nurses, corporate housing or people between homes, are legal, but tenants who stay 30 days or more can gain tenant rights. Talk to your attorney before you build a business on furnished monthly rentals.

Outside the city

Long Island and Westchester towns set their own rules. Many require a rental permit, some limit short stays, and East End towns such as Southampton and East Hampton regulate seasonal rentals closely. Check the town code for the address before you count on short-term income.

Common questions