MANHATTAN — The home-sharing platform Airbnb said it planned to file a lawsuit in New York after Gov. Andrew Cuomo signed into law legislation that prohibits the advertising of illegal short-term rentals on Friday afternoon.
The San Francisco-based giant has been under fire in New York where renting out units for less than 30 days in buildings is illegal. The law would apply to anyone advertising an entire apartment as a short-term rental in a building with three or more units, imposing fines up to $7,500 per violation.
“A majority of New Yorkers have embraced home sharing,” said Josh Meltzer, Airbnb’s head of New York public policy, “and we will continue to fight for a smart policy solution that works for the people, not the powerful. We are filing a lawsuit in New York this afternoon.”
Many housing advocates have said the company was hurting the city’s affordable housing landscape as apartments were being used for short-term rentals instead of much needed housing for New Yorkers.
Also, many residents worried that the stream of tourists in neighboring units was compromising the safety of their families as well as their building’s.
“For too long companies like Airbnb have encouraged illegal activity that takes housing off the market and makes our affordability crisis worse,” said State Sen. Liz Krueger, a longtime foe of the company.
“They have sat idly by while unwitting ‘hosts’ are evicted for breaking their leases, unscrupulous landlords drive out tenants to profit off the short-term market, and tourists are put in danger by staying in unregulated, unaccountable, and often dangerous illegal hotels.”
Landlords — who were already subject to hefty fines under a city law if their tenants were caught illegally renting their units on home-sharing platforms — have been trying to beef up security measures to cut down on the practice.
The Real Estate Board of New York’s John Banks III praised the legislation “as an important step toward stopping illegal behavior that takes precious housing units off the market, threatens hotel workers’ jobs and hurts the quality of life for residents in our City’s multifamily buildings.”
Another reason New York cracked down on the home-sharing platforms was because of uncollected tax revenue.
Airbnb officials, however, have offered to collect and remit hotel taxes — which should send more than $90 million to the city and state of New York every year.
The company has tried to fight the image that it hurts affordable housing by promoting how much it helps individual hosts in low-income neighborhoods.
The typical income of a host in a low-income neighborhood is more than $4,500, providing the equivalent of a 13 percent boost to the median household income in these communities, the company has said.
The company has criticized the law for failing to distinguish between New Yorkers who occasionally share their home from commercial operators who take permanent housing off the market.
While the company asks hosts to follow local laws, it has no plans to shut down its website in New York.
Airbnb, represented by California-based Munger, Tolles & Olson as well as New York-based Gibson Dunn, outlined in a Sept. 6 letter to Cuomo that it believes the law violates the First Amendment rights of New Yorkers and the Communications Decency Act. It also believes it violates the home rule clause of the New York State Constitution.
When the company filed a similar lawsuit in Anaheim, California, the city agreed to stop enforcing the fines against platforms despite not dropping its bans on Airbnb, officials noted. However Anaheim said it would still impose fines up to $2,500 on people who operate without a permit or do not comply with restrictions on noise, occupancy, fire safety, accessibility, and parking, according to reports.
The city of Santa Monica, California has also successfully fined hosts who are operating illegal short-term rentals, which is the same tactic New York City is taking.