New York’s Airbnb Crackdown Hasn’t Improved Housing Affordability

Written by:

Steve Marcinuk

Date:

22 Dec 2025

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“New York hasn’t become particularly affordable now that we’ve essentially outlawed short-term rentals,” according to Bram Gallagher, Director of Economics & Forecasting at AirDNA, highlighting the disconnect between regulatory intent and actual outcomes. He contends that the focus on short-term rentals offers a quick fix for politicians but sidesteps the more difficult work of addressing the root causes of the housing shortage.

Short-Term Rentals and Housing Stock

Gallagher challenges the assumption that short-term rental properties would otherwise serve as affordable long-term housing. “If you look at short-term rentals, they’re typically more in larger, more upscale homes, not necessarily the affordable ones, and also clustered predictably in places where tourists like to visit,” he explains.

He emphasizes that housing affordability is a serious issue across the United States, not just in cities with a high concentration of Airbnbs. “Affordability challenges exist everywhere in the US right now,” Gallagher notes, including in markets with minimal short-term rental activity.

According to Gallagher, the real cause of unaffordability is a prolonged lack of new housing construction. “One of the reasons is we lacked a lot of construction of affordable housing since the Great Recession,” he says. “That has given us some inventory shortfalls that are really difficult to work around.”

Political Incentives and Regulatory Approaches

Gallagher believes that targeting short-term rentals is often a politically expedient move rather than a practical policy solution. “There is this idea that we want to do something about housing affordability, but it’s really, really difficult to build a lot of houses, especially if you’re a local politician,” he says. “Banning short-term rentals may be expedient. It’s not particularly effective, though, as we’ve seen.”

He points to the variety of regulatory approaches in different cities as evidence that blanket bans are not the answer. San Francisco, for instance, has strict regulations but stops short of an outright ban. “Operators are benefiting to some extent,” Gallagher says. “Their occupancies are increasing. The average daily rate is going up because they’re shielded somewhat from competition entering very rapidly.”

Phoenix offers another example. With lighter regulation, Gallagher notes, “We saw supply rapidly increase for the Super Bowl a few years back, but it’s held pretty constant since then, as the demand catches up to that big supply. There’s a market mechanism at work that seems to be handling it.”

The Risks of Regulatory Uncertainty

Gallagher warns that unclear or inconsistently enforced regulations can be especially damaging. “The worst kind of regulation would be the type that we have in my city, Atlanta, where we’re not really sure what the rules are,” he says. “We’ve got laws on the books. They’re not being enforced. As an investor, you really need to know what the rules are before you start signing contracts and paying large sums of money.”

He argues that this uncertainty has stifled short-term rental development in Atlanta and created confusion for operators. The effects reach beyond individual property owners, impacting the broader tourism economy that many cities rely on.

Toward Practical Regulation

Gallagher advocates for regulations that integrate short-term rentals into existing tourism infrastructure rather than trying to eliminate them. “Things like registration, so that your local government can know where you’re operating, that seems reasonable,” he says. “Paying occupancy taxes in a similar way to hotels is very reasonable, and I think important for short-term rental operators to do so that they’re integrated more into the tourism ecology of their local area.”

He stresses the importance of including operators in the regulatory process. “Short-term rental operators need to make sure that their voices are part of the decisions about what those regulations look like,” Gallagher says. He advises operators to join local short-term rental alliances to help shape rules that reflect realities on the ground.

A Broader Perspective on Housing Affordability

Gallagher’s analysis suggests that while regulating short-term rentals may create the appearance of action, it does little to address the underlying causes of housing unaffordability. The real solution, he argues, lies in increasing housing supply through new construction and addressing the long-term structural issues that have led to today’s shortages.

As more cities confront rising housing costs, Gallagher believes the debate should shift from whether to regulate platforms like Airbnb to how to implement policies that meaningfully address the crisis. Without tackling the core issues of housing supply and affordability, he says, efforts to restrict short-term rentals will remain a political gesture rather than a substantive solution.