Short term rentals means any rental where the lease is written for a tenant whose occupancy will be less than one year long.
The short term rental market is New York is mainly focused in Manhattan, where most short term visitor/residents want to be. The market is dominated by a number of companies that cater to business professionals. Typically, these companies make deals with large landlords to rent numerous apartments in a wide variety of buildings; usually doorman luxury buildings.
As a result, these corporate short term rentals, also known as “extended stay” rentals, tend to be expensive. Studios usually start at or above $2,800 per month and one bedrooms usually start over $3,000.
Until recently, many average, typical New Yorkers would also illegally convert their own apartments into “bed and breakfast” short term rooms for rent. In 2011, New York City put an end to that by outlawing any stay in an apartment “B+B” that is less than 30 days.
So where does that leave the person who is looking for a rental at moderate cost for 3 to 10 months? There just isn’t a lot to pick from.
But a workaround solution has slowly evolved over time that seems to work for everyone involved. It’s an unorthodox approach. It’s not in the rule books anywhere - but it works.
To understand how and why it works, you need to know a few things about New York’s system of rent stabilization.
- Rent stabilization mostly applies to apartments with rent under $2,500 per month and in buildings with six or more units.
- Rent stabilization leases are for one or two years. The landlord gets to pick at the inception of a new tenancy whether he/she will offer a one or two year lease. After the first year, it’s the tenant who gets to renew for one or two years at a time, with the choice in the tenant’s hands.
- If a rent stabilized landlord enters into a less than one year lease with a tenant, they are not allowed to charge the next legal rent increase to the new tenant.
- BUT - if the landlord enters into a legitimate one year lease AND the tenant breaks that lease in less than a year’s time, the landlord is not penalized and they are allowed to charge the next tenant whatever increases are allowed under rent stabilization. This is what landlords want!