This past summer, New York City continued its crackdown on home-sharing services. After focusing on apartment buildings with three or more units participating in short-term rentals, city enforcers turned their attention to one- and two-family homes. They have increased the search for violations like failing to install fire alarms and exit signs.

The renewed vigor comes on the heels of a law signed in 2016 that allows the city to issue steep penalties for tenants who list entire apartments for rent for a stay of fewer than 30 days. The hope is that the added pressure will act as a deterrent to what has been a lucrative business for some tenants and even landlords. Despite a version of the 2016 law being in existence since 2010, Airbnb revenues in 2014 from New York City bookings alone exceeded $282M, Commercial Observer reported.

Nearly half of the 50,000 Airbnb listings posted in New York City are illegal, the Intelligencer reported. By creating these laws and enacting policies like requiring home-sharing services to share the data of their New York hosts each month, the city might curb the proliferation of these services.

“The less anonymous you make it and the more information that people must give to the city, that is going to serve as a deterrent to people listing their apartment on home-sharing services,” Rosenberg & Estis member Alexander Lycoyannis said.

Safety concerns are at the heart of the city’s push to limit Airbnb activity. Apartment buildings are not equipped for short-term stays, Lycoyannis said. In assets like hotels, where short-term stays are expected, owners must install special lighting and exit signs that guide tourists to the nearest exit in the event of an emergency. Apartment tenants, by contrast, who might stay in a unit for a period of several years, would know the nearest route to safety.

Home-sharing services like Airbnb also have an impact on the multifamily market. One claim by the city is that these services lead to a decline in housing affordability. A study found that for 1% of all apartments in a neighborhood listed on Airbnb, the rent in that neighborhood increased by 1.58%.

“The more apartments you have that are not being used for their intended purposes, the higher the rents are going to be if you have fewer units available,” Lycoyannis said. “Barring safety and legal concerns, a landlord might be tempted to rent out an apartment on a nightly basis and see a higher return. But in the event of an emergency, the landlord could face serious liability.”

The impact short-term rentals have had on an already tight multifamily market has led the city to single out large-scale operators or illegal hotels. Earlier this year, Big Apple Management was sued by the city for offering short-term rentals across seven rent-stabilized buildings, Curbed reported. Big Apple and similar bad actors will often net lease a whole building or several apartments to rent them out for capital gain.

The best thing a landlord can do to prevent this activity among tenants is to have a strong provision in its leases with tenants prohibiting short-term rentals, Lycoyannis said. This will notify the tenant that this is something the landlord is concerned about and gives them a tool to use against the tenant for possible eviction proceedings. Tenants should also be encouraged to inform their landlords about neighbors they suspect are renting out their units through home-sharing services.

Despite tightening regulations, Lycoyannis doesn’t expect services like Airbnb to go away anytime soon. Like any highly regulated, but lucrative, market, both the service providers and the hosts will find a way to operate within the increasingly narrow short-term rental parameters.

This feature was produced in collaboration between Bisnow Branded Content and Rosenberg & Estis. Bisnow news staff was not involved in the production of this content.