The New York City Council imposed Local Law 18, which placed strict regulations on home-sharing platforms like Airbnb, forcing Airbnb to remove most listings in the city. Hosts now face new rules such as mandatory registrations and the requirement to be present when guests are in the rental space unless the stay exceeds 30 days. In response to these regulations, various private, invite-only groups have emerged on social media platforms such as Facebook, Instagram, WhatsApp, and Craigslist, charging fees through apps like Venmo or Paypal.
One of these groups, “NYC Short Term Sublets,” caters to individuals seeking short to medium-term stays in New York City. With 17,300 members on Facebook and 630 new postings in the past month alone, the group has gained traction among travelers looking for temporary accommodations. Another startup called Ohana has ventured into the space, focusing on rentals surpassing 30 days in length. Ohana recently raised $3 million from investors, including former Airbnb executives and the co-founder of Zillow, to expand its operations targeting landlords and renters across various social media platforms.
The competition in this underground rental market has intensified, with Ohana being accused of poaching leads from platforms like Craigslist and facing backlash from groups like NYC Home Sharing. Ohana’s aggressive tactics have led to significant growth, attracting more than 1,200 hosts from Airbnb alone since its inception. The startup, founded by former McKinsey & Company employee Ezra Gershanok and Apple engineer Jacob Halbert, has cleared over $2 million in rent payments and continues to expand its team to cater to a diverse clientele.
Despite efforts to crack down on the underground rental market, demand for such services has surged since the enactment of Local Law 18. The growing popularity of platforms like NYC Home Sharing, which now has a waiting list of over 1,000 members, reflects the need for alternative housing solutions in New York City. HostU, another startup launched by Northwestern University student Bella Le Sage, is also tapping into this market by connecting students to housing options. With backing from tech-focused fund Thirteen Castles, HostU aims to capitalize on the changing rental landscape in the city.
Furnished Finder, a Texas-based company founded in 2014, has become a major player in the 30-day plus rental market in New York City. Following an investment from former VRBO president Jeff Hurst and private equity firm Summit Partners, Furnished Finder has experienced significant growth since the implementation of Local Law 18. Hurst noted a doubling in tenant demand and supply in New York City, indicating a shift in hosts from traditional platforms like Airbnb to more compliant rental services. Ultimately, the crackdown on home-sharing regulations in New York has paved the way for innovative startups to thrive in the evolving rental landscape of the city.
