When New York City's Local Law 18 took full effect in September 2023, the impact on the short-term rental market was immediate and dramatic. Short-term rental availability in NYC declined by over 90% between the time of the law's enactment and early 2025, turning one of the world's most active Airbnb markets into one of the most restricted. More than two years later, the question property owners, investors, and tenants are asking is whether any of that has changed — or is likely to.

The short answer is no. The longer answer explains why, what the current rules actually require, and what the path forward looks like for anyone with property in New York City.

What Local Law 18 Actually Does

Local Law 18 is built on a framework that predates Airbnb by decades. New York State's Multiple Dwelling Law has long classified most residential apartment buildings as Class A dwellings — meaning they're intended for permanent residence, not transient stays. Local Law 18 didn't create that rule. It enforced it by adding a registration and verification layer that made non-compliance technically impossible on major booking platforms.

The law requires short-term rental hosts to register with the Mayor's Office of Special Enforcement (OSE) before listing any unit, and prohibits booking platforms like Airbnb, VRBO, and Booking.com from processing transactions for unregistered listings. The verification happens at the point of booking — platforms must check the city's database before accepting a reservation. That architecture means that even if a host lists an unregistered unit, no payment can be processed through a major platform. Enforcement is embedded in the transaction itself.

The rules for hosts who do qualify are strict. You must be a permanent New York City resident occupying the unit as your primary residence. You must be physically present in the unit for the entire duration of every guest stay. You are limited to a maximum of two paying guests at a time, regardless of unit size. Guest bedrooms cannot have locks on their doors. The one-time registration fee is $145. There is no pathway to register an investment property that you don't live in. There is no pathway to rent out an entire unit — even your own home — while you're away.

The practical effect is that investment properties in New York City are essentially off-limits for short-term rental use. The only legal short-term rental scenario in NYC is a host renting out a spare room in their own primary residence while they sleep in the next room.

The OSE Approval Rate and What It Tells You

For property owners who have considered applying for registration, one number is worth understanding before going through the process. The OSE reports an approval rate of only about 40%, with common reasons for denial including building prohibitions or the unit being rent-regulated. That means the majority of applications are rejected, most often because the building itself is on the Prohibited Buildings List or because the unit's rent-regulated status makes it ineligible.

The Prohibited Buildings List is a separate layer of enforcement worth understanding. Co-op and condo buildings can apply to have themselves added to the list by submitting evidence to the OSE showing that their governing documents prohibit short-term use. For building owners and boards who want to prevent tenants or shareholders from operating unauthorized short-term rentals, getting on the Prohibited Buildings List is the most direct tool available — and it works automatically at the platform level once a building is listed.

Has the Law Achieved Its Housing Goals?

The stated purpose of Local Law 18 was to return residential units to the long-term rental market and ease housing costs. On the first goal, it delivered: tens of thousands of illegal listings were removed after platform verification began in September 2023. On the second goal — actually lowering rents — the results are less clear. Despite the sharp reduction in short-term listings, the median asking rent across NYC apartments increased by 2.1% from October 2023 to October 2024 — and hotel prices climbed approximately 6% in 2024 as displaced tourist demand shifted into the traditional hotel market. Critics argue the law eliminated income for homeowners and tax revenue for the city without producing meaningful rent relief.

That debate has not changed the law's trajectory. Mayor Mamdani, who took office in January 2026, has made his position clear. Two pending bills — Int 0948-2024 and Int 1107-2024 — would ease restrictions specifically for one- and two-family homes, potentially allowing hosts to rent to up to four guests, restrict guest access to certain areas, and remove the host-presence requirement. Mamdani has already stated publicly that he will oppose the bills because they do not promote the interests of affordable housing. Both bills remain in committee as of mid-2026 with no scheduled vote.

What This Means for Building Owners and Investors

For investors evaluating NYC properties with short-term rental income as part of the investment thesis, the current legal environment makes that strategy essentially unworkable in the five boroughs for anything other than a primary residence with a spare room. The 2023 framework is intact, the political environment under Mamdani makes loosening unlikely in the near term, and the platform enforcement mechanism means that non-compliant listings don't survive long enough to generate meaningful income before being blocked.

For building owners concerned about tenants operating unauthorized short-term rentals — a common issue in buildings with desirable locations — the OSE's enforcement posture has made addressing it more straightforward than it was before 2023. Complaints to the OSE trigger investigations, platforms are required by law to share data with the city, and illegal operators face summonses, warning notices, and potential revocation of any registration they hold. Getting your building on the Prohibited Buildings List removes the ambiguity entirely.

For tenants, the relevant point is that subletting an apartment for short-term stays without the owner's explicit permission is almost always a lease violation — and under the current regulatory framework, it's also illegal. Standard leases in New York City prohibit STR activity, and the combination of lease enforcement by the landlord and OSE enforcement through the platform creates compounding exposure for tenants who try to use their unit as an unlicensed hotel while they travel.

The upstate New York market operates under a completely different framework — the Catskills, Finger Lakes, and Hudson Valley generally don't require primary residency or host presence and welcome investment properties. For owners with capital looking for short-term rental exposure in New York State, that's where the accessible market currently sits, not in the five boroughs.

At Dover Property Group, we work with building owners across New York City on exactly these compliance questions — from understanding what the Prohibited Buildings List means for your property, to addressing tenant lease violations involving unauthorized short-term rentals. If you have questions about how Local Law 18 affects your building or your tenants, our team is glad to walk through it with you.

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Sources: Gallet Dreyer & Berkey — The Impact of NYC's Short-Term Rental Law: Two Years In · NYC Office of Special Enforcement — Registration Law · Awning — New York Short-Term Rental Laws: 2026 Guide by Region · Minut — New York Short-Term Rental Laws: 2026 Manager Guide · Skybriz — NYC's Short-Term Rental Regulations: Local Law 18 & State Law · Blank Rome — The Metamorphosis of NYC's Short-Term Rental Laws · Elad Michael — Navigating NYC's Short-Term Rental Landscape 2026

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About the Author
Dover Property Group is a New York City property management firm working with building owners and tenants across all five boroughs. Our team tracks market conditions, compliance requirements, and neighborhood-level trends to help owners protect their assets and tenants navigate one of the most complex rental markets in the country.