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The Return of Short-Term Rentals? An Old Problem May Soon Resurface

With infection rates plateauing and vaccination rates accelerating, it appears that we may be able to contemplate the end of the COVID-19 pandemic. Travel professionals expect tourism to pick up - and property management professionals expect the issue of short-term rental of condominium and even co-op units to resurface in New York City, despite city laws prohibiting the practice.  

While the city’s economy desperately needs an infusion of tourist dollars, the pandemic-decimated hotel industry is unlikely to return to its pre-pandemic room count anytime soon. Many smaller ‘budget’ tier hotels have been converted to alternative uses - including contracting with the city and State of New York to shelter the homeless - removing hotel rooms from the market. Management professionals expect to see an increase in the number of individual condo unit owners attempting to use their units as a source of income - particularly those who have left the city, but have not sold their units.

Short-term rentals are generally defined as any rental for less than 30 days.  In recent court rulings, 30 days has been viewed by the courts to be the appropriate time-length framework for such terminology, with rentals between 30 and 60 days viewed as longer-term, and less likely to be tourism-related.

Establishing a Policy - & Confronting Illegal Guests

James Gallagher, managing director at AKAM, a national management firm with offices in New York suggests that the first step in dealing with the short-term rental problem is to develop a coherent policy. “The three most important components of that policy,” he says, “are first defining the violation itself; then you must determine how you recognize or identify the violation; lastly, you have to create a mechanism of enforcement to prevent the violation.”

 

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