Airbnb faces tighter restrictions in NYC

Internet Retailing

24th Oct 2016

Airbnb has sued the state of New York in order to block a new law which will impose fines of up to US$7500 on people who advertise illegal rentals online. While the state of New York already doesn’t allow short-term rentals in multi-unit dwellings for less than 30 days if the tenant is not present, the new law makes it illegal to even list such rentals online, including on Airbnb.

People found in violation of the law will be fined US$1000 for their first violation, US$5000 for their second and US$7500 for their third. Airbnb has responded to the law by suing the state of New York, accusing legislators of bowing to pressure from the hotel lobby and hotel workers union.

The online accommodation site is fighting tighter restrictions in a number of US cities, including Santa Monica and San Francisco, where the company is headquartered, and around the world in Amsterdam, Barcelona and Berlin.

Regulators and affordable housing advocates argue that Airbnb has made affordable housing harder to come by for residents, as landlords see greater potential in renting out apartment units for short stints to travelers. Critics have also raised concerns about the ability of hosts to meet health and safety requirements in what they see as essentially unregulated hotels.

Airbnb counters these arguments with its claim that the majority of hosts are individuals looking to supplement their income, not landlords managing multiple properties on the site. It also claims to have the support of the majority of residents in New York City.

Despite its legal battles, the company is now valued at over US$30 million and has spawned a legion of young startups that refer to their business model in the commonly accepted shorthand: we’re the Airbnb of X.