Are Vacation Rentals Causing a Housing Shortage in New York?

Could the reason for New York's housing shortage be pinned on vacation rentals? Well, one New York Assembly member thinks so.

New York Assembly member Pat Fahy is pointing to the growth of vacation rentals as one of the reasons for the housing crisis in New York and in turn is proposing the creation of a statewide short-term rental registry to help address the issue.

According to Fahy, the short-term rental sector is now estimated to be a $1 billion industry in New York State, fueling the housing shortage by taking numerous single-family homes, condos, apartments, and townhouses off the market.

Although some local municipalities have already taken steps towards implementing a similar registry on a local level Fahy hopes to see her proposal included in the final budget.

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While more homes are being turned into vacation rentals, New York State is also losing out on millions of dollars in tax revenue. Vacation rentals from providers like Airbnb and VRBO are currently not being taxed, and Governor Kathy Hochul's executive budget contains a proposal to require these providers to pay sales tax, which is estimated to generate $16 million in annual revenue.

Fahy argues that it is not fair to traditional hotels and motels who pay taxes that are used to encourage tourism, which helps all small businesses in the industry. However, others argue that this proposed regulation could harm the upstate economy and make travel more expensive.