First lawsuit under Local Law 18 targets unlicensed Airbnb ‘Hotel,’ signaling renewed commitment to fair competition and guest safety
May 13, 2025
As New York City begins enforcing Local Law 18 to rein in illegal short-term rentals, hoteliers across the city welcome a long-overdue crackdown on unregulated competition. The city’s first lawsuit under the new law targets Incentra Village House, a Greenwich Village property that had been operating as an unauthorized hotel via Airbnb and other platforms – without meeting legal safety or zoning standards. For licensed hotel operators who comply with strict regulations and face rising operating costs, the case marks an important step toward restoring fairness and accountability in the hospitality sector.
Key takeaways
- A win for legal, compliant operators: The lawsuit reaffirms the cityโs commitment to enforcing Local Law 18, helping level the playing field for hotels that meet zoning, tax, and safety obligations – requirements often sidestepped by illegal short-term rentals.
- Safety and regulatory oversight matter: Incentra Village House, which billed itself as a boutique hotel, allegedly lacked fire alarms, sprinklers, and safe exits. In contrast, licensed hotels are heavily regulated to ensure guest safety – making this enforcement a matter of both market fairness and public trust.
- Protecting NYCโs limited housing supply: With vacancy rates at historic lows, hoteliers understand the broader housing crisis. Illegal short-term rentals not only hurt legitimate lodging businesses but also exacerbate the housing shortage by removing apartments from the long-term market.
- Pushback from the platform economy: Airbnb claims the law harms small hosts and inflates hotel prices. But for hoteliers who have borne the cost of compliance for years, Local Law 18 is a long-overdue corrective – closing loopholes that previously allowed unlicensed competitors to profit while avoiding regulation.
- Reasserting trust in the industry: Guests expect safety, quality, and transparency – values that reputable hotels uphold. The cityโs action sends a clear message: operating a lodging business in New York City comes with responsibilities, and those cutting corners will be held accountable.
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