The Airbnb Hangover: Summer 2025 Crackdowns and What They Mean for Southwest Florida

It’s been a good run for short-term rental investors. For the past decade, Airbnb and Vrbo have turned everything from condos to backyard cottages into cash machines. But the mood has shifted. Cities are starting to crack down, and if you're counting on that income stream to hold value, it’s probably time to pay attention.

While some of these regulatory shifts started back in 2023 or 2024, we’re really seeing the effects show up now in 2025 as enforcement tightens and platforms begin to comply under pressure.

New York City’s Local Law 18 restricted short-term rentals to owner-occupied units. The city hasn’t published exact numbers of how many hosts were warned or fined, but the impact was immediate. Airbnb listings dropped by more than 90 percent, according to multiple reports. That wasn’t just about new laws. It showed what happens when platforms are forced to follow through.

In Spain, national regulators are requiring over 65,000 STR listings to be removed starting this summer. Some regions are working directly with platforms like Airbnb to delist anything unregistered. You’ll see references to specific island crackdowns, like in the Balearics, but it’s hard to verify whether a place like Formentera is requiring visible registration numbers or just following national guidance.

Chicago took a different route by creating a transparency ordinance. Platforms have to report more data now, and neighbors can flag problem listings directly. It’s more passive than what New York did, but still gets at the same goal: fewer unregulated rentals slipping through the cracks.

And this isn’t just speculation. These changes are already underway, and they’re having real effects in big markets.

Now, I’m not saying short-term rentals are collapsing overnight, but if you bought a place in the last few years and your math only worked because of Airbnb income, this might be a good time to ask what happens if that income gets pulled.

That applies across the board. Duplexes, condos, homes in areas where zoning is ambiguous. I’ve had more people lately asking not just about regulations, but about whether there’s still real demand for short-term rentals in their area. A lot of owners bought in when things were booming, and now they’re noticing that bookings are slower, the nightly rates aren’t holding, or resale interest from other STR investors has dropped off. In some cases, they’re not even sure if a buyer would view the property as a viable rental anymore. That kind of shift in demand doesn’t always make headlines, but on the ground, it’s definitely happening.

It doesn’t take much. Just a couple of noise complaints or a shift in who’s sitting on the planning board, and suddenly your city is talking about new restrictions.

In Southwest Florida, we already have rules in place, even if enforcement varies by jurisdiction. Back in 2011, the state passed a law that blocked cities from banning vacation rentals unless they had regulations already on the books. That tied some hands, but local governments found other levers to pull.

Collier County passed Ordinance 2021-45, requiring properties rented more than three times a year for under 30 days to be registered. That’s been in effect since January 2022. It includes a local contact requirement and compliance with safety and tax documentation.

Cape Coral has a seven-day minimum stay rule, a 35 dollar registration fee, and a required contact person. Enforcement has been light in some areas, but the city is already looking into how STR tax revenue is tracked and shared. That kind of review tends to lead to policy tweaks.

Bonita Springs and Estero both require permits, inspections, and in Bonita’s case, a 100 dollar per-unit registration. The state also passed Senate Bill 606, which took effect this year. It gives owners clearer authority to remove unauthorized guests or squatters. Good news for operators, but also another sign that the legislature is taking a closer look at STR-related issues.

Short-term rentals are still legal throughout most of the region, but the grace period of “just list it and go” is definitely shrinking.

Statewide, Florida’s short-term rental performance has softened. Occupancy rates in places like Orlando, Tampa, and the Panhandle are down. Average daily rates have slipped, and booking windows are shorter than they were at the peak. These aren’t just regulatory effects. Saturation, higher costs, and shifts in travel behavior are all playing a part. But when those factors hit at the same time as new rules, the impact adds up fast.

That doesn’t mean all markets are equally vulnerable. Properties in high-demand vacation zones with steady tourism traffic may still perform well even under stricter oversight. But properties where STR income was used to stretch a purchase price, or where investors were banking on fast cash flow, might have a harder time adapting. This isn’t about the end of short-term rentals. It’s about knowing which ones are built to weather the shifts.

I’ve already had multiple clients ask for appraisals based on a hypothetical scenario with no short-term rental allowed. Sometimes it’s for estate work or divorce, sometimes for a refinance where the lender doesn’t want to count nightly income. A year ago, that would’ve been rare. Now it’s routine.

If you’re holding one of these properties, this might be a good time to run the numbers. Could you rent it seasonally or monthly? Would the value hold up if a buyer couldn’t legally operate it as a vacation rental? Is the platform’s projected income even consistent with actual market behavior?

Short-term rentals still make sense for some owners. But if your entire investment hinges on Airbnb income, it’s smart to stress-test those assumptions now before a local rule or market shift does it for you.

If you own or manage property in Southwest Florida and want a clearer picture of how short-term rental regulations might impact value, I can help. I work with investors looking to run backup scenarios, attorneys and estate professionals who need defensible valuation work, and owners who want to understand what their property is worth with and if its viable for nightly rental income. My appraisals are based on actual market behavior, not platform projections, and they’re written to stand up under scrutiny whether that’s from a lender, the IRS, or in court.

You can reach me directly at (239) 449-6002 or shane@gulfstreamres.com.