NYC’s new black market for short-term rentals: A throwback to the time before Airbnb

The gothamist, David Brand, September 13, 2023 

New York City’s week-old restrictions on Airbnb and other platforms are spawning a new black market for short-term rentals, with hosts turning to informal methods — both new and old — to attract guests and work out payment.

It’s a throwback to the days before Airbnb, which first came online in 2008, when landlords and tenants advertised units for visitors on sites like Craigslist, or relied on word of mouth to house friends of friends traveling to New York City for a long weekend.

Now, some New Yorkers who have come to rely on Airbnb and other short-term bookings sites for income, or to defer their housing costs, say they’re going back to the basics: returning to Craigslist, testing out Facebook Marketplace, joining WhatsApp group chats and using the website Houfy, which connects hosts with visitors who have to figure out payment on their own.

“New Yorkers always find a way to get around,” said Fatin Yasar, a Queens property owner who started listing a four-bedroom apartment on Craigslist last month. He said he registered the apartment with the city to provide legal short-term rentals, and has a permanent tenant living in one of the rooms.

The city’s new rules prevent Airbnb, Vrbo and other booking platforms from processing payments for stays of less than 30 days — unless a unit has been registered with the city’s Office of Special Enforcement. Short-term rentals for entire apartments are mostly illegal in New York City, rendering them ineligible for registration. Since the city began enforcing the rule last Tuesday, 15,000 short-stay Airbnb listings were removed from the site compared to last month, Gothamist reported.

But Yasar said the rules will simply give rise to a more informal, illicit market.

“It’s been existing. There was and there always will be” he said.

Long-time tenant activist Michael McKee, a member of the Coalition Against Illegal Hotels, agreed, but said the short-term accommodations remove apartments from the city’s rental market during a housing shortage.

“There’s always going to be a black market,” said McKee, who recalled family members booking a short-term rental in Hells Kitchen in the late ‘90s — a concept he was unfamiliar with at the time. “Later, this became standard operating procedure: People with suitcases on wheels looking at their phones, going to one address to get a key and then going to the address of the apartment.”

He said the Office of Special Enforcement will need to staff up to effectively respond to short-term rental complaints. As Gothamist previously reported, the agency was missing half its budgeted staff members earlier this year, threatening their ability to keep up with enforcement. The agency did not immediately respond to requests for comment.

Christian Klossner, the Office of Special Enforcement’s executive director, said last month that the agency “will continue to meet its enforcement responsibilities with a focus on responding to submitted complaints of illegal occupancy.”

Already some New Yorkers are explicit about working around the city’s new short-term rental payment prohibition.

“Due to the ban on short-term rentals by NYC — I am now offering this short-term rental via other avenues such as Craigslist,” reads one $130 per night listing in the Douglaston neighborhood of northeast Queens. “I have consistently been a superhost on Airbnb, and currently have an overall rating of 4.93.”

Two other posts on Craigslist are advertised as “Airbnb alternatives.” One is for a short-term sublet in Williamsburg listed at $700 a week while the tenant is traveling, and the other is a gut-renovated one-bedroom on the Upper West Side with a rate of $200 a night for the next week.

None of the people who posted the units responded to inquiries for this story.

But other tenants and landlords looking for short-term guests despite the new rules say they are wary of the platform.

“Craigslist is very, very, very old school,” said Lisa, an East Village tenant who nevertheless started posting her apartment there last month after previously using Airbnb.

Lisa, 53, who asked to be identified by her middle name because her listing may violate the law, said she is partially retired as a result of severe knee problems and has come to rely on the income she receives from tourists visiting New York City and staying in her apartment for a few weeks each year when she visits her mom in Florida.

Lisa said she’s more likely to find her next guests through Facebook Marketplace, where she posted her place several weeks ago. She said she’s since received about 200 inquiries.

“I was shocked by the response,” she said. “I’ve been slammed, slammed, slammed.”

She said she thinks Facebook may become the new go-to black market for short-term rentals, but “it’s a bit too early to tell.”

“There’s a lot of panic for people,” she added.

Lisa said she’s not alone in her quest for guests to help pay the bills and knows two retired neighbors who sleep in their cars periodically while allowing short-term visitors to stay in their apartments. It’s the only way they can earn some extra cash, she said.

Lisa said she is considering testing out the website Houfy, which lets people post their homes and apartments and scour for prospective short-term renters while figuring out payment on the side. On Tuesday, the site featured at least 22 short-term rentals still available in New York City over the next week with nightly prices ranging from $63 for a room in Harlem to $627 for a two-bedroom apartment elsewhere in the neighborhood.

Houfy did not respond to an email asking how their site complies with the city’s new rules, which specifically regulate payment processing.

But several landlords and tenants listing short-term rentals say those other strategies are no substitute for Airbnb, Vrbo and the formal platforms, where the payment processing and starred review systems give them more confidence when it comes to renting out their homes.

“Both were protected, the host and the guest, by Airbnb,” said Maria Crutun, a Ridgewood landlord contacted by Gothamist who lists a studio apartment on Craigslist for $140 a night. “Now I’m really cautious about dealing one-on-one with the guest.”

She said most of her short-term tenants came from other countries and are unlikely to use Craigslist to find a place. She said she will probably keep the place empty and use it to house former short-term guests making return trips to New York City.

“I think the business will die,” she said in a phone interview.

Airbnb has consistently criticized the city’s crackdown, saying the restrictions will hurt small owners who depend on the income. Last month, a judge tossed a pair of lawsuits from Airbnb and a group of small property owners trying to block the rules, while acknowledging that the city has approved legal registrations at a “glacial pace.”

Andrés, a Bedford-Stuyvesant brownstone owner who lists an apartment for short stays and asked to be referred to by his middle name to avoid being targeted for enforcement, said he does not plan to put his unit back on the long-term rental market. He said he doesn’t want to deal with the possibility of a tenant skipping out on paying and having to go through the eviction process.

“It’s a scary situation,” he said.

Instead, he said he’s using group chats to find people visiting New York City and recently booked stays for a family member and another family friend. He’s also advertising to filmmakers and location scouts through the website Giggster, as well as traveling nurses and other professionals via the platform Furnished Finder.

“It will probably be even better financially than Airbnb but more taxing on the apartment,” he said. “And not as great for the community, and on my end, not as interesting as I don’t get to meet people from all over.”

Source: The Gothamist