Airbnb Sues New York City Over Short-Term Rental Rule

Airbnb hit back in court as New York City looks to enforce Local Law 18.

The short-term rental company filed two lawsuits against the city on Thursday, Crain’s reported. One listed the company as a plaintiff and the other was filed on behalf of three local hosts, but both want the same ending: an injunction against the law while the cases are being litigated.

Local Law 18 requires hosts using Airbnb and other home-sharing sites to register their rentals with the city. The goal of the law is to track short-term rentals in the city and prevent owners from renting out more than one unit at a time.

State law already forbids renting out a unit for fewer than 30 days unless the full-time resident is present, but that law has proven difficult to enforce.

Enforcement technically began last month, but the city hasn’t wielded its ax against payment transactions yet. Still, the freeze cast across short-term rentals in the city is significant — only 29 units were registered as of May 3.

“Airbnb will have to cancel thousands of registrations,” company attorney Karen Dunn told the outlet. “New York City will be the Grinch who stole summer.”

Airbnb’s share of the registered 29 units was a mere nine, representing 0.05 percent of its annual net revenue in the city, according to the lawsuit. The company projects losing $6.7 million in net revenue per month and $85 million on an annual basis.

The lawsuits allege the legislation represents a de facto ban on short-term rentals in the city. They also allege the violation of previous agreements between the city and Airbnb.

Despite the single-digit registered Airbnb listings in the city, there are still nearly 43,000 total listings, many of which are flaunting the law and hoping to slide by before the city steps up enforcement action, likely to happen next month. There were only 419 registry applications as of the end of last month, which accounts for hosts beyond Airbnb’s scope.

Only seven applications have been denied by the Office of Special Enforcement, but the application process may be deterring more hosts from registering their units, as it calls on hosts to conform to housing and zoning regulations.

— Holden Walter-Warner