New York Law May Signal Challenges Coming for Airbnb

An agreement with New York City this month removes some liability concerns for Airbnb in its largest market. But New York's law making short-term rentals illegal could be the opening salvo for opponents elsewhere who say such rentals reduce affordable housing in major cities.

Recently, Airbnb backed off from a lawsuit involving its largest U.S. market: the Big Apple.

The move was the result of a liability shift related to a New York state law that fines parties who rent apartments for less than 3o days—Airbnb’s bread and butter.  Under an agreement announced earlier this month, the home-sharing service agreed to drop its lawsuit challenging the law, and New York City said it would enforce the law only against individual hosts who post illegal listings and not against the service itself.

In a statement to Reason, Airbnb pledged to find “an approach that protects responsible New Yorkers while cracking down on illegal hotels that remove permanent housing off the market or create unsafe spaces.”

Airbnb will press the city to focus on hosts running multiple listings on its website, but in doing so it could push away its most aggressive users. According to a Housing Conservation Coordinators and MFY Legal Services report highlighted by Skift, more than half of all NYC-based Airbnb listings (55 percent) violated the city’s law, and three in 10 listings were from “commercial” operators. This, the study argued, reduced the level of affordable housing in New York City by 10 percent.

Airbnb dismissed the study, calling it “misleading” and implying that it was paid for by the hotel industry. But local legislators have tended to side with housing advocates.

“I expect the city will now get down to the important business of enforcing the law against the serial lawbreakers on the site who turn affordable housing into illegal hotels,” assemblywoman Linda Rosenthal said in a statement to the New York Daily News. “This is a win for everyone.”

The problem may not be limited to New York. The American Hotel & Lodging Association,  a longtime Airbnb critic, has pushed model legislation that local governments could use to enact measures similar to those in New York City and San Francisco, another Airbnb hotbed that where the company has faced legislative setbacks.

But by making a deal with New York, the company says it has an opportunity to shift the conversation. “We very much see this as a material step forward for our hosts,” Airbnb said in a statement to Gothamist.

For now, according to the New York Daily News, New York City is gearing up to begin enforcing the law as soon as this month.

(Jakob Steinschaden/Flickr)

Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

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