Almost every city in America has had the same argument at some point in the last decade. A house on a quiet block starts turning over new guests every weekend. Neighbors complain about noise, trash and strangers with door codes. The owner points out that the income is what lets them keep the house. A hotel workers’ union says the property is an unlicensed hotel. A tourism bureau says visitors are spending money on the local main street.

Underneath the noise are two real policy questions: is short-term renting pulling homes out of the long-term market, and how should a city handle a business operating inside a residential neighborhood?

This article lays out how cities regulate short-term rentals (STRs), what the evidence shows, and what each side is actually arguing.

The regulatory toolkit

Most ordinances mix and match a handful of tools.

  • Registration or permits. Hosts must register the unit, post a permit number in listings, and keep contact information on file. This is the backbone of nearly every modern ordinance because it makes everything else enforceable.
  • Primary residence requirements. Only the home you actually live in can be rented short term. This targets investor-owned whole-home operations while leaving room for homeowners who travel.
  • Host-present (“home-sharing”) rules. The strictest version: you can rent a room while you are there, but not the whole unit.
  • Night caps. A limit on how many nights per year a unit can be rented when the owner is away — 90 or 120 nights is common internationally.
  • Density caps and zoning limits. A maximum number of permits per block, per building or per zoning district. Some cities bar STRs from single-family zones entirely.
  • Platform accountability. Requiring booking sites to verify registration numbers and to stop processing payments for unregistered listings. This is what turns a paper rule into an enforced one.
  • Taxes. Lodging or occupancy taxes, usually collected and remitted by the platform, so short-term stays are taxed more like hotel stays.
  • Good-neighbor standards. Occupancy limits, quiet hours, trash requirements, local contact who must respond within a set time, and escalating fines.

Key takeaway: The details of who enforces the rule matter more than the rule itself. Cities that relied on complaint-driven enforcement without platform verification generally saw rules ignored.

New York City: the strictest big-city experiment

New York’s Local Law 18 is the case study everyone cites, in both directions.

New York State law already barred renting an entire apartment in most buildings for fewer than 30 days. Local Law 18, passed in 2022, added the enforcement mechanism: a registration system run by the Mayor’s Office of Special Enforcement. Under the rules the city publishes for hosts, a registered host must be a permanent occupant of the unit, must be present during the stay with guests having access to the whole space, and may host a maximum of two guests, not counting children under four. Rent-regulated apartments and public housing units cannot be registered. Platforms must confirm a valid registration before processing a booking.

The results, by the city’s own count in a 2025 report: roughly 60,000 illegal listings in 2018 and more than 38,000 active listings on a single platform in early 2023 gave way to about 3,000 active registrations. More than 4,300 applications were denied, including over 550 for rent-regulated units. More than 21,000 buildings are on a Prohibited Buildings List that owners and managers can add to themselves. The city frames this as tens of thousands of units protected in a market with a 1.4% rental vacancy rate.

Independent market data tells the same story about volume. The analytics firm AirDNA reported that short-term listings dropped roughly 83% in the year after the law took effect, with hosts shifting toward stays of 30 nights or longer.

What the law did not obviously do is lower rents. New York rents kept setting records after 2023, and hotel rates rose. Supporters say that proves nothing — 3,000 to 10,000 units cannot fix a shortage measured in hundreds of thousands. Critics, including Airbnb and homeowner groups in the outer boroughs, say it shows the housing rationale was thin while the cost to small hosts was concrete.

That argument has moved to the City Council. A bill backed by Airbnb and homeowner advocates would have let owners of one- and two-family homes host up to four adults and lock bedroom doors. The Council’s housing committee did not vote on it before the session ended in December 2025, Skift reported, with the hotel industry opposed. Follow the ongoing debate on our New York City page.

What the research actually finds

The most-cited academic study is by Kyle Barron, Edward Kung and Davide Proserpio, published in Marketing Science. Using national data, they found that a 1% increase in Airbnb listings is associated with a 0.018% increase in rents and a 0.026% increase in house prices. For the median zip code, that worked out to about $9 a month in rent and roughly $1,800 in house value — about one-fifth of observed rent growth and one-seventh of price growth over the study period.

Three findings from that work are worth holding onto:

  1. The effect is real. Short-term rentals do shift units from the long-term to the short-term market.
  2. The effect is modest on average. It is one factor among many, not the main driver of a housing shortage.
  3. The effect is concentrated. Impacts are larger in neighborhoods with low owner-occupancy — resort towns, tourist districts, dense rental neighborhoods — and small in ordinary owner-occupied suburbs.

That third point explains why blanket citywide rules satisfy almost no one. The block where five investor-owned units cluster near a beach or a French Quarter has a genuinely different problem from a subdivision where three people rent a spare room during a football weekend.

Courts have become part of the story

Cities that write aggressive rules should expect litigation.

New Orleans limits residential short-term rentals to roughly one permit per square block, awards them by lottery when applicants compete, and restricts ownership to individuals rather than corporations. A federal judge upheld the residential rules on the merits in 2024, with plaintiffs appealing, according to a summary from Steeg Law. See New Orleans for local meeting information.

Dallas passed ordinances in 2023 that banned short-term rentals from single-family zones and required registration. Operators sued, arguing state constitutional property protections and noting that more than 90% of the city’s short-term rentals sit in single-family zones. In February 2025, the Fifth Court of Appeals upheld an injunction blocking enforcement, KERA reported. The city argued the units function as hotels; the court found the operators would face irreparable injury. Local details are on the Dallas page.

The practical lesson for residents: an ordinance that passes unanimously at 11 p.m. can still be unenforceable two years later. Ask about legal exposure during the hearing, not after.

Arguments for and against stricter regulation

Arguments for stricter rules Arguments against
Whole-home rentals remove units from a tight long-term market, especially in low owner-occupancy neighborhoods Measured citywide effects on rents are modest; housing shortages are driven mainly by underbuilding
Residential zoning exists so neighbors can expect residential behavior — noise, parking and turnover are real costs Nuisance problems can be addressed directly through noise, trash and occupancy enforcement without banning the use
Commercial operators should not compete with licensed hotels without comparable rules and taxes Occupancy taxes are already collected by major platforms in most states, funding tourism and city budgets
Registration plus platform verification is proven to work, as New York showed Strict caps push activity to smaller platforms and informal channels, making it harder to monitor
Caps protect tourism-dependent neighborhoods from becoming full-time lodging districts Homeowners, including retirees and lower-income owners, lose income that helps them keep their homes
Enforcement data gives cities visibility into who owns what Enforcement costs staff, software and litigation, and registries can be slow and error-prone for legitimate hosts
Visitor spending shifts to hotels and licensed operators with unionized jobs Visitors get fewer options, and families and longer stays are poorly served by hotel rooms

What a workable local ordinance usually includes

Cities that avoid the worst outcomes on both sides tend to converge on a few things:

  • A clear distinction between home-sharing (renting part of a home you live in) and whole-unit commercial operation, with different rules for each.
  • Registration numbers required in every listing, with platform verification.
  • Proportional penalties — warnings and fines before revocation, plus a real appeals process for hosts.
  • Published data: how many permits, where, how many complaints, how many enforcement actions.
  • A sunset or review date so the council has to revisit the rule with evidence in hand.

Questions to ask at your next public hearing

  • How many short-term rental units does the city estimate exist today, how many are whole-home versus room rentals, and where did the estimate come from?
  • Will platforms be required to verify registration numbers before processing bookings? If not, how will the rule be enforced?
  • What is the projected cost of enforcement — staff, software, legal defense — and is it funded in the budget?
  • How much occupancy tax revenue does the city collect from short-term stays now, and how would this ordinance change it?
  • Has the city attorney assessed the litigation risk, including any state preemption law?
  • Will existing operators be grandfathered, and for how long?
  • What happens to complaints today: who responds, how fast, and what is the current resolution rate?
  • Will the city publish an annual report on permits, complaints and enforcement, and is there a scheduled review date?
  • How does this interact with our housing supply strategy overall — is anyone comparing the units recovered here with the units a zoning change might add?

Key takeaway: Short-term rental policy is not a substitute for a housing strategy. The strictest law in the country recovered thousands of units in a city that needs far more, which is why many councils pair STR rules with zoning reform.

What you can do next

  • Check the calendar. Ordinances move fast once drafted. Find upcoming meetings on our town hall calendar and your officials in the directory.
  • Bring evidence, not anecdotes. Photographs, dated complaint records, listing screenshots with dates, and 311 case numbers are what staff can actually cite in a report. Our guide to filing a public records request explains how to get the city’s own enforcement data.
  • Argue it out in public. Start a debate on your city’s proposal, or join an existing one in debates, so neighbors on both sides can see each other’s strongest points.
  • Write to the people who vote. Use My District to find your council member, then follow our guide on writing to elected officials.
  • Show scale. If a proposal is stuck, a petition or local initiative demonstrates how many residents are behind a specific fix.