Judge dismisses Airbnb lawsuit against New York City legislation

US: A state Supreme Court judge has dismissed a lawsuit brought by Airbnb against New York City over what it called “extreme and oppressive” restrictions and a “de facto ban” against its short-term rental operations in the city.

Judge Arlene Bluth told the Manhattan court that the city had acted within its authority and that it was “inherently rational” for it to require hosts to register with a local agency in a bid to crack down on listings operating illegally.

Airbnb brought the suit in June over the enforcement of Local Law 18, an ordinance that would require owners to register with the city mayor’s office, disclose the names of all residents who live in the property, and pledge to comply with separate zoning, construction and maintenance ordinances.

In its filing at the time, Airbnb argued that the city council had effectively introduced “its most extreme and oppressive regulatory scheme yet” and that it had imposed arbitrary restrictions that would significantly reduce rental supply, even if the city council does not explicitly ban short-term rentals outright in New York City.

According to the home-sharing platform, over 5,500 short-term rentals are booked to host more than 10,000 guests in New York City in the first week of July.

However, the judge said that the requirement for Airbnb to verify its listings would be a “very simple way” to eliminate unlawful activity, quoting data that revealed how New York City had received almost 12,000 complaints relating to short-term rentals between 2017 and 2021.

In 2019, when a previous law restricting short-term rental operations in New York City came into effect, Airbnb said that 29,000 hosts were forced to leave the short-term rental market. Airbnb told its hosts that it been left with little choice but to pursue legal action against the city as it had “exhausted all available paths” and that the New York City Mayor’s Office of Special Enforcement  [OSE] had “failed to consider reasonable alternatives” to keep the short-term rental market operating in New York City.

In response, the judge said that Airbnb had provided no evidence that it would have to take down many listings or change reservations for stays booked after the law comes into force from 5 September. The law was originally due to come into effect last month but was delayed until September to allow all issues to be discussed thoroughly in court.

The conflict between Airbnb and the city dates back many years but a key juncture was in 2016 when the platform sued New York state over a ban on advertising short-term rentals. Though the lawsuit was dropped when the city decided not to enforce the ban, the debate raged on four years later when Airbnb settled another New York lawsuit regarding a dispute over monthly reporting requirements for its listings.

Theo Yedinsky, global policy director for Airbnb, said in a statement: “New York City’s short-term rental rules are a blow to its tourism economy and the thousands of New Yorkers and small businesses in the outer boroughs who rely on home sharing and tourism dollars to help make ends meet.”