Airbnb sues New York City over new short-term rental law

An Airbnb billboard in New York's Times Square. Photo / Victor J. Blue, Bloomberg via Getty Images

Airbnb is taking New York City to court over what it is calling a “de facto BnB ban” in NYC.

The website sued America’s most populous city on Thursday, over an ordinance that the company says imposes arbitrary restrictions that would greatly reduce the local supply of short-term rentals.

The 2022 ordinance, which the city plans to begin enforcing next month, would require owners to register with the mayor’s office, disclose who else lives in the property, and promise to comply with zoning, construction and maintenance ordinances.

The Financial Times reported that the city has approved only nine Airbnb properties - less than 0.04 per cent of the website’s active listings.

Airbnb called the restrictions “extreme and oppressive” and a de facto ban against short-term rentals that left the company no choice but to sue.

San Francisco-based Airbnb filed the lawsuit in state court in Manhattan. Three Airbnb hosts filed a companion lawsuit against the city.

The New York restrictions are among many efforts by local communities to regulate short-term rentals without banning them.

European tourist hubs, including Paris and Amsterdam, have made local bylaws against short-term rentals like Airbnb. In the Dutch capital city hosts can only lease a property for a maximum of 30 days a year.

However, it is the requirement of registration with the New York City Mayor’s office that might be the most restrictive yet.

The crackdown which is due to take effect in July aims to target listings which have already been flaunting the city’s building regulations. Earlier this year, Bloomberg reported on one such property which had racked up almost US$1 million ($1,621,800) in unpaid fines for housing guests in attic spaces, amongst other offences. Despite, illegal listing, the Mayor’s office said the website paid out US$2 million over four years to the host, who “deceived more than 6500 guests”.

The San Francisco-based tech company recently reported a slowdown in quarterly bookings and signalled a move to go “back to basics”, focusing on budget rental propositions and pausing new additions to its ‘Experiences’ marketplace for local tour operators and activities.

- Associated Press with additional reporting