Airbnb Suing NYC Over Short-Term Rental Rules

Airbnb is suing New York City over a new short-term rental registration process that the San Francisco-based firm calls a “de facto ban” of its home-sharing platform in NYC.

The process, adopted in December—with enforcement scheduled to begin in July—requires Airbnb hosts to register with a database overseen by the Mayor’s Office of Special Enforcement (OSE).

Hosts must prove that they reside in the residences offered for rental and that their homes abide by local zoning and safety requirements. They’re required to submit diagrams of their apartments and provide a list of residents in their homes.

The rules prohibit hosts from installing locks on guest’s bedroom doors or renting out their homes while residents are on vacations. Failure to comply could result in up to $5,000 in penalty fees. The rules require Airbnb to certify that all of the information provided by its hosts to NYC is accurate or be subject to fines of up to $1,500 per violation.

In a lawsuit filed in state court in Manhattan on Thursday, Airbnb called the restrictions “extreme and oppressive” and said the rules amounted to “a de facto ban” against short-term rentals “intended to drive the short-term rental trade out of New York City once and for all.”

“It is near impossible for lay New Yorkers to certify compliance” with the city’s new rules, the lawsuit said, calling the new requirements “a maze of complex regulations,” the New York Post reported.

Three Airbnb hosts joined the home-sharing platform as plaintiffs in the lawsuit. The lawsuit asks the court to issue an injunction blocking the rules from going into effect in July.

“Airbnb will have to cancel thousands of reservations in NYC over the summer and the city will be the Grinch that stole summer,” Karen Dunn, a lawyer for the home-sharing giant, said at a press conference at City Hall.

The registration process is so onerous, that only nine New Yorkers have been approved to rent out their homes as of May 3 out of a pool of 38,500 Airbnb hosts who have rented their homes on the platform at least once since January, according to the Airbnb complaint.

Prior to the new rules, NYC has been one of Airbnb’s largest markets, with $85M in revenue from short term rental listings in the city, the complaint said.

The Mayor’s Office issued a statement indicating it would “review” the lawsuit. “We have consistently worked with hosts and platforms to ensure they were aware of their requirements under the law. We will review the lawsuit,” the statement said.

When it adopted the registration requirement in December, the city said the new rules are needed to shut down widespread illegal rental activity that has been using fake Host profiles on Airbnb and other sharing platforms to market “substandard” short-term housing.

The registration requirements were enacted in the wake of a lawsuit filed in July by OSE to shut down what it called an illegal short-term rental operation being run by a licensed real estate broker in Turtle Bay.

According to NYC’s complaint, broker Arron Latimer and building owner Apex Management ran an illegal short-term rental operation at 344 East 51^st Street using Airbnb to make the bookings.

The lawsuit was announced by Mayor Eric Adams, who said that “bad actors” have for several years “used fake host profiles on popular sites like Airbnb to deceive and lure unsuspecting guests into paying for substandard lodging at illegal rental listings.”

“Not only did they unlawfully pocket millions, but they endangered guests and deprived New Yorkers of an entire building’s worth of long-term housing,” Adams said.

“We are sending a clear message that this kind of lawlessness will not be tolerated in our city. We are not going to stand by while shady brokers use illegal listings and fake host accounts to skirt the law and defraud consumers,” the mayor said.

OSE Executive Director Christian Klossner told the New York Daily News in December that he expected to see 10,000 Airbnb listings “disappear” after the new registration rule went into effect.