ALBANY, N.Y. (NEXSTAR) — As the 2024 legislative session drew to a close, legislators passed S885B/A4130A, regulating short-term residential rentals (STRs). It's now in the hands of Gov. Kathy Hochul, and her office said that she will review it.
Later in June, rental app Zumper released a report on rental rates in the 100 largest cities in the U.S. by population. They found that Buffalo, Syracuse, Rochester, and New York City—all four entries from the Empire State on the list—each saw rents grow by over 10% in a year. Rates in Syracuse alone spiked by 29%, per Zumper.
STRs let homeowners rent out their entire properteries or individual rooms, usually through third-party software and without a conventional tenant/landlord lease or relationship. They help fuel New York tourism, generating income, and sometimes representing the only option in rural areas. Many cities and towns in New York benefit from the economic activity.
Still, "The impact on the housing market and the taxation inequities among different types of lodging providers have presented challenges for local officials and their communities," said Barbara Van Epps, Board President of the New York State Conference of Mayors. "The enactment of uniform standards will not only level the playing field for the hospitality industry but will give cities and villages the tools and resources they need for the safe and effective management of short-term rentals.”
The mostly self-regulated industry reduced available housing, displaced long-term New Yorkers. That's according to the bill's sponsors, Assemblymember Pat Fahy and Sen. Michelle Hinchey. "If the bill is signed, all municipalities will continue to have local control over whether and how to address STRs in their community," said a spokesperson from Hinchey's office.
With rents skyrocketing, as the Zumper report showed, and towns upstate missing out on hundreds of millions of dollars, per Hinchey, the bill would authorize new tax revenues. Collecting occupancy and sales taxes is supposed to keep millions of dollars within the economies of local communities that would also track the area housing supply.
The bill makes owners register STRs with New York's Department of State every two years, creating a statewide registry that paints a clear local landscape. It would clue towns into how many STRs operate locally and where, with some granular detail like the number of nights occupied. The bill also aims to formulate basic safety requirements and standardize requirements, putting private, short-term landlords on equal footing with the local hospitality industry.
"The registry would be very helpful in informing counties as to the volume of units being used for short-term rentals,” reads a statement from Columbia County Board of Supervisors Chairman Matt Murell.
The framework for collecting the data could help manage the housing crisis. But in New York City, where they already created an STR registry, there remains a housing shortage and massive homelessness. Under their system, hosts:
Many cities upstate rely primarily on tourism—consider towns that benefit from summer beachfront access or skiing in the winter. In Saratoga Springs, for example, horseracing season traditionally sees homeowners renting out their properties all summer long. When city officials signaled their intention to regulate STRs, hundreds packed city hall for a February public hearing.
In early July, their city council meeting featured STR regulations as the first item on the agenda. On Wednesday, Saratga Springs Commissioner of Accounts Dillon Moran said, "We will be passing local licensing and zoning laws that will define for the first time, a legal STR market in the city. We have agreement on the council to move this forward."
Saratoga Springs has an old law regulating small rentals that potentially conflicts with the bill from Fahy and Hinchey that's awaiting the governor's signature. "Given how much the world has changed since 1978 when that local law was first passed, it would be irresponsible for our elected officials not to support the elimination of that clause," Moran said.
A spokesperson from Fahy's office pointed out the Spa City's likely unique circumstances. But going forward, other municipalities may encounter conflicts between their local laws and the statewide STR registry, if signed.
"That change would have to (procedurally) come from the legislators representing the City itself in the form of enabling state legislation," Fahy's office said. "Generally, local bills like that pass easily and with bipartisan support, so it's a simple change as far as things go legislatively."
S885B/A4130A had bipartisan support from legislators, along with backing from trade organizaitons, advocacy groups, tourism agencies, and business councils, including the New York State Association of Counties, the Association of Towns of the State of New York, the New York State Hospitality & Tourism Association, Citizen Action, Ski New York, and the Campground Owners of New York.
Others oppose the legislation. "[The bill] will make travel more expensive, reduce the income potential for thousands of New Yorkers who rent their homes to make ends meet, and impose a complex system of regulation that will hurt the upstate economy. Short Term Rentals are a staple of upstate New York's tourism industry," said Laura Chadwick, President & CEO of the Travel Tech Association. "Our industry has met with Senate and Assembly members for months to reach a reasonable consensus on a statewide approach to regulation, and they've ignored our concerns in favor of a policy that will hurt the upstate economy and limit traveler choice within New York."
And, "short-term rentals are not the biggest contributor to high rents, especially when it comes to the most vulnerable segments of a city’s residents," reads a February article from the Harvard Business Review. "Put simply, restricting Airbnb is not going to be an effective tool for solving the housing-affordability problems in many U.S. cities."
The U.S. Census Bureau counted over 145,000,000 housing units—a living space for a household or an individual, such as a house, apartment, mobile home, or set of rooms—in the U.S. as of July 1, 2023. Of those, just under 65% were owner-occupied.
