Airbnb Restrictions: What Cities Have Strict Airbnb Regulations?

Airbnb restrictions in different local areas can make it challenging for home owners to rent out their property short-term.

Renting out your property short-term to travelers is a great opportunity to earn extra cash. But you must ensure you comply with all laws in your area at the city and state levels. This article will help you get started.

Thinking about investing in Airbnb rentals? Renting out your property short-term, in whole or in part, to travelers is a great opportunity to earn extra cash. But it’s vital to ensure that you are fully compliant with any laws for your area at the city and state levels.

So before you list your property on one of the OTA websites, don’t forget about one important step—consider legal issues first. Check your state and local laws and regulations to find out how the laws and vacation rental tax rules work in your city and if there are any Airbnb restrictions.

Airbnb Legal Challenges

When deciding whether to become an Airbnb host, you should consider Airbnb legal challenges. Some cities have passed legislation that restricts your ability to host paying guests for short periods. Many cities have rules covering home sharing, and the specific codes and ordinances can appear in many places (such as zoning, building, licensing, or tax codes).

In many cities, property owners must register, get a permit, or obtain a license before listing their property or accepting guests. Certain types of short-term bookings may be prohibited altogether. Local governments vary widely in how they enforce these laws, and penalties may include fines or other enforcement actions.

These rules can be confusing, so it’s better to contact your government with any questions. You may also find more information about your jurisdiction’s laws and regulations on Airbnb's Responsible Hosting page in the Local regulations section.

If you are a US-based host, you may want to look at Airbnb’s Responsible Hosting in the United States webpage, which covers city regulations that apply to many major US cities.

If you own a vacation rental property in Europe, you may want to check one of these responsible hosting articles that provide a general overview of different laws and regulations that affect hosts in European countries.

If you can’t find information about local laws and regulations online, you should contact your local government offices directly. You may find that the rules differ depending on the specific city or town you live in. You might even find that your city has only a couple of restrictions on vacation rentals.

So you’ll be able to proceed with creating your listing and start earning money. If you opt for short-term rental software like Hospitable, you can streamline routine operations and automate guest communication. That means you’ll have more time for more vital aspects of your business.

Cities with the Most Airbnb Legal Issues

Your Airbnb real estate investing success depends heavily on your vacation rental's location. So it’s best to avoid cities with Airbnb restrictions that substantially limit Airbnb operations.

Let’s take a look at Airbnb regulations in some cities with the most Airbnb legal issues.

New York City, NY

New York is the biggest tourist destination in the United States, but the Airbnb regulations here are pretty strict. Many laws and regulations apply, and failing to follow them can result in hefty penalties and fines.

The main issue with becoming an Airbnb host in New York City is complying with the state’s Multiple Dwelling Law (MDL). It prohibits renting out unhosted space for fewer than 30 days in “Class A Dwellings” (buildings with three or more units). That means you can’t legally rent out your apartment while you’re away for the weekend.

The same applies to houses. You can’t rent out an entire apartment or home for less than 30 days, even if you own or live in the building, and you must be present during your guests’ stay.

The host can only have two paying guests staying in the home or apartment for less than 30 days. The Airbnb host can’t install any locks because guests must have free and unobstructed access to all rooms and exits.

Since September 2023, hosts must also register with the city under Local Law 18 before hosting stays shorter than 30 days and add the registration number to their Airbnb listing. Hosts who aren’t registered can only host stays of 30 nights or longer.

San Francisco, CA

San Francisco was among the first cities to regulate short-term rentals. Airbnb hosts are required to register as a business and receive a valid Short-Term Residential Rental Certificate from the Office of Short-Term Rentals. You can register your listing only if you live there for at least 275 days per year.

A host can rent out a spare room for an unlimited number of nights as long as they stay at the property. But they may rent out their entire space while they are absent for up to 90 days per year. Hosts must also carry at least $500,000 in liability insurance and file quarterly reports on their short-term rental activity.

Hosts in San Francisco must pay taxes on their rental properties. San Francisco imposes a 14% Transient Occupancy Tax (TOT) on short-term reservations (less than 30 nights). Airbnb collects and remits the TOT in San Francisco.

Los Angeles, CA

According to the Home Sharing Ordinance (CF 14-1635-S2), home-sharing is permitted in Los Angeles if your listing is your primary residence where you live for more than six months out of the year. Hosts are required to register with the city and post their registration number on all listings. Registration fees are adjusted every year, so check the current amounts on the City Planning website.

Airbnb hosts in Los Angeles are allowed to rent out their residences for a maximum of 120 nights per year. Exceeding the limit will result in daily fines. If you want to host for an unlimited number of nights, you must register for extended home-sharing.

The City of Los Angeles imposes a 14% Transient Occupancy Tax on the listing price (including cleaning fees) for stays of 30 nights or less. Airbnb collects and remits the City transient occupancy tax. But hosts are still required to file monthly returns to the Office of Finance and take a deduction for tax collected and remitted by Airbnb.

Santa Monica, CA

Santa Monica prohibits renting out an entire home as a short-term rental while the host is not present. The city only allows home sharing for less than 30 days when at least one of the primary residents lives on-site throughout the visitor’s stay.

If you want to home-share your primary residence, you must apply for a home-sharing permit and business license. The Santa Monica Short-Term Rental Ordinance contains restrictions on the number of group bookings, occupancy, and visitor vehicle limitations.

It limits the occupancy of the home-share to the lesser of ten people, one person per 200 square feet of the dwelling unit, or two persons (excluding minors) per bedroom.

Santa Monica assesses a 17% Transient Occupancy Tax on the listing price, including any cleaning fee for 30 nights and shorter reservations. Airbnb collects and remits transient occupancy taxes in Santa Monica.

Las Vegas, NV

Airbnb rules and regulations in Las Vegas ban rentals that are not owner-occupied. Airbnb hosts must obtain a business license, carry $500,000 in liability insurance, and pay an annual license fee. Hosts are also responsible for any applicable taxes.

The short-term rental property must have no more than three bedrooms and be at least 660 feet from any other short-term residential rental and 2,500 feet from a resort hotel.

Additionally, Las Vegas prohibits using short-term rentals for weddings, birthday parties, receptions, and other special events.

Final Thought

When planning your vacation rental investment strategy, remember that each jurisdiction has different rules for short-term rentals. Many legal challenges surround short-term rentals in residential neighborhoods, and some cities have introduced Airbnb restrictions.

If you want to become an Airbnb host, you should be aware of the legal requirements in your area. Keep in mind that laws around Airbnb restrictions are changing rapidly, so it’s crucial to stay up-to-date.

You may also want to check our article to learn about the best places to buy vacation rental property in Europe and the US.

Disclaimer. This article is for general information only and isn’t legal advice. Short-term rental laws change often and vary by city, county, and state, so always read the current rules on your local government’s official website, and consult a lawyer and your local authorities before you start hosting.