Airbnb, N.Y. Face Off on Home Rentals

KATIE BENNER & GREG BENSINGER  |   October 24, 2016

New York Gov. Andrew M. Cuomo last week signed a bill that would enact steep fines — up to $7,500 — on short-term rental sites, like Airbnb, whose hosts break local housing regulations. In response, Airbnb has filed a federal lawsuit against the state, arguing the new law causes the company “irreparable harm.” The new law allows New York authorities to fine hosts who advertise rentals of fewer than 30 days in multiunit buildings, which violates New York City laws. Rentals are allowed if the host is present under New York’s law. “New York is taking a bold step that will hopefully set a standard for the rest of the country and other countries in the world that are struggling with the impact of Airbnb on affordable housing,” Linda B. Rosenthal, a Democratic assemblywoman in Manhattan who sponsored the bill, told The New York Times. New York is the company’s largest market in the U.S. The city’s hosts generated about $1 billion in revenue last year from the site. Airbnb argues that New York’s new law violates the company’s constitutional rights to free speech and due process. The new law “would impose significant immediate burdens and irreparable harm on Airbnb,” the company said in its complaint, filed in federal court. “In order to be assured of avoiding liability, including potential criminal prosecution, Airbnb would be required to screen and review every listing a host seeks to publish.” Airbnb has offered to remove repeat violators off its site as well as to set up a registration for hosts and ban multiple listings from a single host. New York lawmakers argue that Airbnb has become a threat to the real estate market. Landlords are keeping apartments off the market for use as Airbnb rentals, which is driving up the cost of leases. Airbnb has “been flagrantly violating a law that’s been in place for six years,” argues Rosenthal. She says she hopes the fines would prompt apartment owners to open up more units to long-term tenants. Airbnb has seen explosive growth in recent years, tripling its value in two years to $30 billion. It has been waging several legal battles across the country against any regulations that would cause it to lose the number of hosts on its platform.

Source: New York Times and The Wall Street Journal