A New York state court judge dismissed an Airbnb lawsuit against New York City, ruling the city had a right to require host registration and licenses, and that it was reasonable to require that Airbnb — and other platforms — verify that listings have licenses, or face penalties.
In Airbnb’s June lawsuit to block the enforcement of Local Law 18, it argued the rules were oppressive, and the registration requirements so burdensome as to amount to a de-facto ban on short-term rentals in the city.
Airbnb said it generated $85 million in revenue from the Big Apple in 2022, and a big chunk of that is at risk as the enforcement measures take effect September 5.
While some might argue the ruling is a victory for neighborhoods — the city received nearly 12,000 complaints from 2017-2021 — and a loss for short-term rental platforms, what’s clear is that it will crush the hopes of many tourists hoping to visit the city on the cheap. Airbnb has around 80,000 reservations on the books in the city for September 5 and later.
The ruling may give momentum to other cities that are likewise instituting short-term regulations. Many companies in the sector state that they are open to regulations — as long as they are reasonable.
Airbnb is believed to be evaluating the ruling to see if there are grounds for appeal.
Occupancy is down, losses are mounting, and the company announced another round of layoffs last month. Despite this, the luxury hospitality brand Inspirato has a few wins: a new partnership forged with Capital One, a rewards program and other revenue-boosting measures like slashing prices and advanced booking discounts for members.
For the quarter ending June 30, the Denver-based company posted a consolidated net loss of $47 million; its revenue totaling $84 million remained flat compared to last year.
CEO Brent Handler told shareholders that in addition to the reduction in its portfolio and weaker occupancies, the headwinds for the quarter were travel demand leaning towards urban travel, an area that is not the company’s strong suit.
“The high-end, traditional vacation rental markets were down this summer, more than I have ever seen,” Handler said. “Nantucket, Rosemary Beach in Florida, Malibu, Hilton Head Island in South Carolina — this is where the bulk of our inventory is, and they have to do well for us.”
Fannie Mae Tightens Rules for Condo and Co-op Loans
More than two years after the Miami oceanfront condo tower collapse, Fannie Mae and Freddie Mac, have implemented stricter regulations for condo and co-op loans. These rules involve refraining from purchasing loans for condo units within projects that have postponed significant repairs or have been directed by local authorities to address hazardous conditions. Recently, the agencies made these rules permanent. The rules help protect buyers from obtaining a mortgage for an at-risk condo, South Florida Reporter wrote.
Remote Island to Remote Working Island
Some real estate markets may be saturated, but the remote region of East Grand Lake in northeastern Maine near the Canadian border has a different story to tell. The region has experienced the most significant surge in home prices over the past year.
The presence of lakes and their proximity has led to a considerable price increase in Orient, a small town with 156 residents situated between Houlton and Danforth. According to Zillow data, the average home price in Orient has risen by nearly 30% from June 2022 to this year, reaching an approximate value of $227,000. A real estate agent told Bangor Daily News that the area is starting to see temporary residents at short-term rentals.
Around The World
Airbnb has called on the local government of Victoria in Australia to assume control over the regulation of short-stay accommodations instead of delegating it to councils. This is in response to concerns that leaving it to councils might lead to a fragmented situation in regional areas. Presently, Melbourne boasts 16,200 entire homes or apartments listed on Airbnb, surpassing the 10,800 properties available for long-term rentals as of August 1.
Victorian Premier Daniel Andrews recently revealed that his government is developing a housing package that could implement measures such as allowing landlords to raise rent only once every two years and potentially capping rent increases. The plan is also likely to introduce a tax on hotel stays and short-term rentals, including Airbnb listings, with a suggested rate of up to $5 per booking.
In Airbnb’s submission to a state parliament inquiry on housing affordability, the company recommended the establishment of a statewide registration system and the implementation of a guest levy, akin to the cost of a coffee, to finance community infrastructure. This approach is proposed as an alternative to burdening hosts with higher council rates.
Srividya Kalyanaraman writes the Short-term Rental Report. Reach out to her with tips, comments and feedback at email@example.com