A common misconception in New York City is that most Airbnb rentals available here are perfectly legal. In reality, the majority of these arrangements are typically illegal under the New York State Multiple Dwelling Law (MDL). According to the MDL, it is illegal to rent apartments nightly, for a period of less than 30 days, in a building of three or more units. Even if one owns the condo or co-op that is being rented out, it’s still not a legal practice. For owners of condos in particular, they are able to rent their units, but the rental period must be at least 30 days and the owner has to obtain condo board approval. When it comes to one- or two-family private homes, the zoning of a residential house would have to be changed to that of a rooming house in order to be legal as an Airbnb. There may also be building codes for this kind of zoning with which one would have to comply.
As you may imagine, it’s fairly easy for the authorities to catch New Yorkers who are running illegal Airbnbs. After all, the list of rulebreakers along with the ability to contact them can be found via a simple internet search. However, the business is so lucrative that even those who have been caught will often return to the site at some point. Due to the fact that hotel rates in New York City are some of the highest in both the United States and the world, Airbnb is quite competitive here. The hotel unions are very strong in New York City and the local government is on their side. Additionally, the taxes involved in operating hotels are sky-high nowadays, and this is all factored into the prices of hotel rooms. For these reasons it’s quite simple, and often irresistible despite the laws, to rent Airbnbs for a fairly high price and to pocket a nice profit.