On Friday, the state of NY enacted new restrictions that are one of the toughest in the country on Airbnb, with new legislation authorizing fines of as much as $7,500 for numerous short-term rentals.
The measure applies to rentals of fewer than 30 days when the owner is not present.
Gov. Andrew Cuomo has signed into law a bill that could inhibit Airbnb's operations in New York State. If the company would be required to enforce laws passed by local units regarding short-term rentals, the listings on the service would likely decrease, along with the company's earnings. In the San Francisco lawsuit, the company asserts that the city "impermissibly treats Airbnb as the publisher or speaker of third-party content" when it is merely a platform for communications between property owners and guests.
"Albany backroom dealing rewarded a special interest - the price-gouging hotel industry - and ignored the voices of tens of thousands of New Yorkers", said Peter Schottenfels, a spokesman for the company, in a statement. It was an effort to reduce illegal hotel situations and keep people from buying up and then renting multiple listings to turn a big profit.
"It's preposterous. Maybe half their listings are illegal" in New York City, she said.
Supporters of the measure say the law protects affordable residential housing in New York City and helps stop illegal and unlicensed hotels from operating. Critics say short-term renting like Airbnb exacerbates the city's ongoing struggle with affordable housing. Airbnb is now involved in litigation in San Francisco, Santa Monica and Anaheim, California.
Airbnb immediately filed a lawsuit in federal court in an attempt to overturn the new law.
The new law comes two years after NY attorney general Eric Schneiderman's office found that 72% of the units listed on Airbnb in the city were illegal. The company says the 46,000 Airbnb hosts in New York City have generated more than $2 billion in economic activity. All the Rooms compiled Airbnb live as well as historical state-by-state booking and pricing data to project nationwide occupancy and revenue figures.
But rather than help Airbnb, the proposals only rankled its political opponents more, who said the company had taken its ideas straight to the press instead of trying to negotiate in good faith. One Manhattan Democrat said that the law was targeting commercial operators that rent a large number of units that are vacant in apartment buildings.
There are now a number of Buffalo listings on the company's website. The financial burden will instead fall on NY hosts.