Real Estate Winners and Losers in NY Legislative Session: Airbnb Tax, Casino Sites

Key Takeaway

• NY legislature approved taxing short-term rentals like Airbnb and established a state registry, pending Gov. Hochul's signature.
• The Gaming Facility Location Board must recommend sites for three new downstate casinos by end of 2025, with possible extensions.
• Real Estate Board of New York successfully opposed a bill capping co-op ground lease rent increases; other real estate measures saw mixed results.

Legislative Session Ends with Mixed Results

The recent legislative session in Albany concluded with a flurry of activity, leaving a mixed bag of outcomes for the real estate sector. Key measures were passed, including a bill allowing localities to tax short-term rentals like Airbnb and the establishment of a state registry for these rentals. However, several significant proposals, such as the controversial co-op ground lease rent cap, failed to cross the finish line. This session's outcomes reflect the complex and often contentious nature of real estate legislation in New York.

Key Measures Passed

Among the notable bills that did pass, the legislation allowing localities to tax short-term rentals stands out. This bill, which also establishes a state registry for such rentals, aligns with Governor Kathy Hochul's executive budget proposal. Localities with existing registration systems, like New York City, will need to provide their data to the state quarterly. Additionally, the legislature approved a bill requiring the Gaming Facility Location Board to recommend sites for three new downstate casinos by the end of 2025, or once all applications have received necessary approvals. This move is expected to significantly impact the state's gaming landscape.

Real Estate Board of New York's Influence

The Real Estate Board of New York (REBNY) scored a victory as the legislature did not pass a measure that would have capped co-op ground lease rent increases. REBNY argued that the bill would unconstitutionally interfere with private contracts and disproportionately benefit wealthy co-op shareholders in Manhattan. Instead, a less controversial bill allowing co-op boards to renew or extend their ground leases if their contracts permit such actions was approved. This measure aims to provide more certainty for shareholders without drastically altering existing agreements.

Broader Market Implications

The legislative session's outcomes have broader implications for the real estate market. The failure to pass the co-op ground lease rent cap bill, for instance, maintains the status quo, potentially benefiting landlords and developers. On the other hand, the approval of the short-term rental tax and registry could lead to increased regulatory scrutiny and operational costs for platforms like Airbnb. The casino bill's passage is poised to inject new energy into the downstate gaming market, with significant economic and employment implications.

My Perspective

From my vantage point, the legislative session's mixed results underscore the ongoing tug-of-war between different stakeholders in New York's real estate market. The REBNY's influence was evident in the defeat of the co-op ground lease rent cap bill, highlighting the power dynamics at play. Meanwhile, the passage of the short-term rental tax and registry reflects a growing recognition of the need for regulation in the sharing economy. The casino bill's approval is a strategic move to boost the state's economy, though its long-term success will depend on careful implementation and oversight.

Street Views

• Annemarie Gray, Open New York (Bearish on New York's housing policy progress):

  "While this session saw incremental progress to increase housing supply in New York City, the state ignored well-tested tools to allow all parts of the state to build more homes."