New York Checked on Its Airbnb Hosts. 27% Are Already Breaking the Rules.

New York City approved roughly 3,000 short-term rental hosts under Local Law 18. Then it checked on them. What the city found was that more than 1 in 4 are already cheating.

The Office of Special Enforcement published its latest compliance review in April 2026, and the headline number is blunt: 27% of approved, registered short-term rental listings in New York City are operating illegally. The violations are not edge cases or technical mistakes. Hosts are renting out entire apartments and exceeding the two-guest maximum. These are the two core rules that LL18 was built to enforce.

This is the strictest short-term rental law in the United States. The city spent years designing a registration system, fought Airbnb in court, and reduced its active listings by more than 90%. And still, more than a quarter of the hosts who made it through the gate are breaking the rules on the other side.

What Local Law 18 Actually Requires

Local Law 18 was enacted on January 9, 2022, and enforcement began on September 5, 2023. The rules are straightforward. Hosts must register with the Office of Special Enforcement. They must be physically present in the unit during any guest stay shorter than 30 days. Guests are capped at two people. Entire-apartment rentals are prohibited. Booking platforms like Airbnb, Vrbo, and Booking.com must verify a host’s registration before processing any reservation.

The registration fee is $145, and OSE processes applications in under a week on average. About 40% of applications are approved. More than 4,300 applications have been denied for non-compliance, and over 550 were rejected because the units were in rent-regulated buildings. Another 14,000 property owners and managers have proactively placed their buildings on the city’s Prohibited Buildings List, which now includes more than 21,000 properties where short-term rentals cannot operate.

Before LL18, New York City had more than 38,000 active short-term rental listings on major platforms. By early 2024, that number had collapsed to roughly 2,300 on Airbnb alone. Today, about 3,000 registrations are active citywide.

StaySTRA data reflects how dramatically the market has contracted. The platform tracks just 47 active short-term rental listings in New York City, with an average daily rate of $274, an occupancy rate of 86.7%, and estimated annual revenue of $86,709 per property. The hosts who remain legal are operating in one of the most supply-constrained, high-demand STR environments in the country.

What OSE Found When It Looked

The Office of Special Enforcement conducted what it described as a partial review of all approved short-term rental listings in early 2026. The findings landed on April 21.

Documents show that 27% of registered hosts had reverted to illegal activity after receiving their approval. The two primary violation types were renting entire apartments (host not present) and booking more than two guests per stay. Both violations directly contradict the conditions those hosts agreed to when they registered.

This was not the first warning sign. In mid-2025, OSE had estimated that approximately 20% of registered listings showed signs of illegal occupancy. The number climbed to 27% by the time the 2026 review was published. The trend is moving in the wrong direction.

OSE Executive Director Christian Klossner framed it in plain terms: “We will continue to go out of our way to help hosts comply with the law, but we are moving on to a new stage of enforcement for those who do not.”

What Happens When the City Catches You

Enforcement under LL18 operates on a graduated scale. The city starts with warnings and escalates from there.

Warning letters. OSE sent emails to approximately 500 registered hosts flagged for potential violations. Those warnings made clear that continued non-compliance could trigger inspections, administrative summonses, fines, registration revocation, and denial of future renewal applications.

Formal revocation notices. Five hosts received a Notice of Intent to Revoke, the first step in the formal revocation process. Hosts get an opportunity to respond, initially in conversation with OSE, and ultimately in court if OSE proceeds to filing a petition.

Fines. Penalties range from $100 to $5,000 per violation. For hosts operating without registration, the city can pursue penalties of three times the illegal revenue collected. For booking platforms that fail to verify registrations, fines are $1,500 per transaction or three times the platform’s fee, whichever is lower.

Lawsuits. The city has filed two lawsuits under LL18’s enhanced enforcement provisions, both targeting operators who ignored repeated warnings.

The first lawsuit (May 2025) targeted the owners of Incentra Village House, who were operating 10 apartments as unregistered short-term rentals in Manhattan’s West Village. The city sought $5,000 per unregistered transaction or three times the revenue generated. Three separate city agencies had told the operators they were violating the law before the suit was filed.

The second lawsuit targeted Mark David Militana, who was operating 9 rent-stabilized apartments on Manhattan’s Upper West Side as illegal short-term rentals. Data indicates he generated more than $550,000 in revenue from over 900 guest transactions. The city is seeking more than $4 million in penalties. According to the city, Militana moved his listings from Airbnb to a custom booking website after major platforms began enforcing LL18 verification requirements, then used fake names and addresses and removed his building’s buzzer to block inspectors.

Platform enforcement. In November 2025, OSE secured a $152,000 settlement against the Kiki Club, a social-media-based booking service that had facilitated nearly 400 unverified short-term rental transactions since 2023 without verifying host registrations or filing the required quarterly reports. The penalty equaled three times the fees the platform had collected.

The Enforcement Gap: Why 27% Is Still Growing

The 27% number reveals a structural problem in how LL18 works. The registration system is a gate. Hosts apply, get approved, and receive a registration number. Platforms verify the number. But what happens after that?

Sources reveal that once a host has a valid registration, they can modify their listing at any time. They can change the occupancy from a shared room to an entire apartment. They can raise the guest count above two. The registration number still shows as valid. Airbnb is not required by law to monitor listings for post-registration changes, and, according to Skift’s reporting, Airbnb is not doing so voluntarily.

This is the loophole. The city built the gate, but there is no fence around it.

Renewal applications are expected to begin in October 2026. That will give OSE its first systematic opportunity to re-evaluate every active registration. But between now and then, the enforcement burden falls entirely on the city’s inspectors and investigators. With roughly 3,000 active registrations and limited staff, the math is difficult.

What This Means for Legal NYC Hosts

If you are one of the approximately 2,200 registered NYC hosts operating within the rules, the 27% finding is not abstract. It is direct competition from people who have the same registration you do but are not following the same restrictions.

An entire-apartment rental in Manhattan generates significantly more revenue than a shared room with a two-guest cap. A host who breaks those rules is pulling in higher nightly rates, attracting a larger guest pool, and running a completely different business than what they were approved to operate. They are doing it under the same registration number, on the same platform, in the same city.

The city’s enforcement response has been real but limited. Five hundred warning letters. Five revocation notices. Two lawsuits. One platform settlement. Against a backdrop of roughly 800 hosts (27% of 3,000) operating in violation, the numbers suggest the city is still in the early stages of scaling its enforcement capacity.

Mayor Zohran Mamdani has taken a firm stance on LL18, refusing to loosen restrictions even with the FIFA World Cup arriving in New York in June 2026. “Rent-regulated buildings exist to house New Yorkers, period,” Mamdani said in connection with the rent-stabilized building lawsuit.

What This Means for STR Investors Watching NYC

For investors evaluating the New York City short-term rental market, the 27% violation rate tells two stories.

The first story is risk. NYC has the most aggressive STR enforcement regime in the country. The city is filing lawsuits. It is pursuing treble damages. It is about to launch a renewal process that will force every registered host to re-justify their compliance. Operating illegally in this environment is not a gray area. It is a calculated gamble against a city that has already demonstrated its willingness to spend money and political capital on enforcement.

The second story is opportunity, but only for investors committed to full compliance. The legal NYC STR market has been compressed into a small, high-value channel. With an average daily rate of $274, occupancy above 86%, and estimated annual revenue approaching $87,000 per property, the hosts who are operating legally and correctly are doing very well. Supply is constrained by design. Demand is persistent. And with the World Cup weeks away, the summer 2026 window is likely to be the most lucrative period for legal NYC STR operators since LL18 took effect.

The risk is that continued non-compliance by nearly a third of registered hosts could trigger even stricter enforcement, including potential changes to how platforms monitor listings post-registration. If NYC closes the loophole that allows hosts to modify their listings after approval, it will tighten the market further.

New York City’s vacancy rate sits at 1.4%. The political will to enforce LL18 is not softening. If anything, the 27% finding is likely to accelerate it.

How NYC Compares to Other Strict STR Cities

New York’s LL18 remains the most restrictive municipal short-term rental law in the United States, but it is no longer the only city grappling with post-registration compliance.

Maui recently signed Bill 9 into law, initiating the largest STR phase-out in U.S. history and targeting more than 6,000 vacation rental units. Boston has resisted Airbnb’s lobbying to relax its STR rules for the World Cup. San Diego built a self-funded enforcement model that generates $7.5 million in registration fees against $6.7 million in enforcement costs. Nashville reports 91% compliance using Granicus technology with just 4 dedicated enforcement staff.

But no other city has gone as far as NYC in requiring host presence, capping guests at two, and then discovering that more than a quarter of approved operators are ignoring those same rules. The question other cities are watching is whether NYC’s enforcement machine can actually close the gap, or whether the 27% is the cost of doing registration-based STR enforcement at scale.

If you have been caught violating LL18, or if you are concerned about your registration status heading into the October renewal cycle, understanding your options before the city contacts you is critical. Our legal guide to STR permit denials and appeals covers what to do when enforcement catches up.

We do our best to keep our reporting accurate and up to date, but situations evolve and we are only human. Always verify current details directly with local officials and sources before making decisions.

Run the Numbers Before You Invest

New York City’s legal STR market is small, tightly regulated, and under active enforcement scrutiny. If you are evaluating whether the numbers work in one of the most constrained rental markets in the country, start with the data. The StaySTRA Analyzer gives you real market metrics (ADR, occupancy, revenue estimates) for NYC and 200+ other U.S. markets, so you can compare NYC’s compressed supply against markets where the regulatory environment is less hostile to investors. Run your numbers at the New York City STR calculator.