In a blog post on Tuesday, Airbnb (ABNB) urged New York City to reconsider its short-term rental regulations, which took effect in September 2023. Regulators had intended that the rules would protect affordable housing. However, ABNB, the online marketplace for short and long-term homestays, argued that the rules have instead led to higher prices for travelers without addressing the housing crisis.
Details of ABNB’s Criticism of the NYC Law
In the blog post, the company criticized Local Law LL18, which requires hosts to be permanent residents of the units they rent out and to register with the city before listing their properties. According to Airbnb, this law has “failed to combat the housing crisis.”
Since the implementation of the law, the number of Airbnb listings for stays under 30 nights has plummeted by 83%, according to a Reuters report that cited data from Airdna. Despite the stricter regulations, Airbnb cited the data from Apartment List showing that apartment vacancy rates in New York City have remained steady at 3.4% since the law took effect.
NYC Law Has Impacted Travel Costs
Furthermore, Airbnb pointed out that the shortage of homestays for travelers traveling to NYC has resulted in higher travel costs as tourists chose to stay in hotels in NY. The company noted that hotel rates in New York City rose by 7.4% year-over-year in July, compared to a 2.1% increase nationwide, based on data from Co-Star.
As a result, ABNB stated that by easing parts of the law, the city could expand the availability of accommodations, support local hosts, and revitalize businesses that rely on tourism. Airbnb’s criticism of the NYC local law comes at a time when the company is seeking to bolster demand for its homestays in the U.S. amid slowing travel demand and shortening booking windows.
Is Airbnb a Buy or Sell?
Analysts remain sidelined about ABNB stock, with a Hold consensus rating based on nine Buys, 21 Holds, and five Sells. Over the past year, ABNB has declined by more than 15%, and the average ABNB price target of $132.16 implies an upside potential of 12.6% from current levels.
