Skip to main content

In New York, it's now a crime to advertise short-term apartment listings on Airbnb

airbnb nyc lawsuit settled
Hoping to find a cheap pad to crash while drifting through the Big Apple? You probably won’t be doing it through Airbnb. On Friday, New York Governor Andrew Cuomo signed legislation that levies steep fines on property owners who advertise short-term availability of their apartments and homes.

The legislation, which the New York state legislature passed in June, effectively strengthens New York’s existing laws on short-term property listings, which, as of 2010, prohibit apartments — defined as buildings with “three or more units” — from being rented out for less than 30 days. Owners found promoting listings which meet that criteria that category face stiff penalties: $1,000 for the first violation, $5,000 for the second violation, and $7,5000 for the third and every violation thereafter.

Related Videos

The law in effect holds Airbnb, FlipKey, HomeAway, and other similar services accountable for facilitating the property rentals. Shared rentals, or those during which the host is present, are permitted, as are certain categories of one-family and two-family homes and row houses, but the number of listings for private dwellings far exceeds those that’d pass judicial muster.

As of June 1, Airbnb had 22,2253 listings for entire homes and 19,120 in New York — the sort illegal under state rules. And in an investigation between 2010 and 2014, the New York state attorney general found more that more than 30,000 Airbnb reservations ran afoul of New York’s short-term listing law.

“It’s preposterous. Maybe half their listings are illegal [in New York City],” New York Assemblywoman Linda Rosenthal told Reuters. “It’s part-and-parcel of their business model.”

The passage of New York’s legislation marks the continuation of a trend that threatens to damage Airbnb’s bottom line — and its revenue model. New York, the company’s largest U.S. market, is the third such metropolitan area to ban short-term rental services. The German capital of Berlin imposed restrictions in June, following the implementation of similar regulations in Barcelona and Amsterdam.

Airbnb, for its part, argues it can’t be held liable for landlords’ ignorance of, or blatant disregard for, local leasing laws and regulations. In a lawsuit involving a San Francisco statute that imposes a $1,000-a-day fee for every host on an internet rental platform who fails to obtain a license with the city’s Office of Short-Term Rentals, the company cited Section 230 of the federal Communications Decency Act (CDA), which holds that websites can’t be held responsible for the content of their users.

The Travel Technology Association, an advocacy organization who counts Airbnb, Expedia, HomeAway, and other online booking services among its members, said in a statement that New York’s law “possibly infringes upon free speech and threatens to undermine the legal foundation upon which internet providers and platforms rely for protection.” The group’s attorney, Matthew Kiessling, called the law “concerning.” It’s “issuing massive punitive penalties for anybody who’s caught listing, not even renting,” he told Skift. “That’s one of the things that’s sort of key. If you’re caught advertising, it’s a really steep fine.”

Airbnb points to its existing arrangements with local officials around the world. As of October, the company has tax and short-term rental agreements with officials in nearly 200 markets.

Critics of Airbnb and comparable services contend that listings drive up prices, disrupt communities, and, in heavily trafficked cities like New York, attract commercial operators who employ the services as veneers for illegal hotels. In New York, the state attorney general found that 6 percent of the hosts from 2010 to 2014 supplied 36 percent of the rentals. And a separate study by the pro-labor Los Angeles Alliance for a New Economy found that in Los Angeles, two or more listings generated 44 percent of all Airbnb revenue.

Airbnb isn’t taking Friday’s development sitting down. It recently announced that it would create an online registration system for property owners and automate enforcement of Airbnb’s rules in New York and San Francisco. It’s proposed rules for new state legislation on listings that would require hosts to register with the state, provide insurance, and limit listings to a single property within New York City’s five boroughs. And it pledged to pursue legal recourse should the law go into effect.

Editors' Recommendations

Airbnb softens its tone, agreeing to regulations in Amsterdam and London
airbnb urban planning samara

Airbnb is trading an ornery history for an olive branch. The home rental company, which has long been known for fighting government regulations, is now changing its tone -- at least in Europe. On Thursday, Airbnb made a novel move, agreeing to limit the number of nights hosts can rent out homes in London and Amsterdam, two of the company's biggest markets. This could set a precedent for Airbnb's operations the world over, notably in other major cities like New York and San Francisco, which have long accused Airbnb of driving up rental prices and having otherwise adverse effects on the housing market.

But now, Airbnb looks to be playing by the rules (regardless of whether or not they agree with them). Beginning in January, the company will disallow hosts in London and Amsterdam from offering their entire homes for more than the legally permissible number of days. In London, that limit is 90 days, whereas in Amsterdam, it stands at 60. “This is a way of saying, you can trust people to paint within the lines, because we’re going to help with that,” said Patrick Robinson, Airbnb’s head of public policy in Europe, the Middle East, and Africa.

Read more
Airbnb and the city of Seattle team up to offer lodging during natural disasters
airbnb amsterdam london regulations

Airbnb could soon be more involved in cases of emergency in one Northwest city. The company is partnering with the deputy mayor's office in Seattle to help provide accommodations for residents displaced by a natural disaster.

The move is certainly an interesting one, and should be very helpful if a disaster does strike the area. According to the company, the initiative came about after 1,400 Airbnb hosts opened up their doors during Superstorm Sandy, helping those in need during a time of crisis.

Read more
Slow BitLicense approval dims New York’s bitcoin global hub aspirations

New York's bitcoin licensing has been nickel and dimed. The state's shot at jumping in early to be the world bitcoin center has been deflected by a sluggish license approval process, according to Reuters.

Financial regulators at the Department of Financial Services (DFS) may be skeptical about bitcoin, but even so, they wanted the state to be virtual currency central last year when they developed a licensing process. Virtual currency firms that want to hold and exchange virtual funds for U.S. and other currencies have been required to apply for a "BitLicense" since June 2015. Top people including the head of DFS left the regulatory agency shortly after the new rules and licensing process were put in place, however, which has made BitLicense application approval anything but a "New York minute."

Read more