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Airbnb and Hosts Sue City, Calling New Registration Rules a Virtual Ban

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Katie Honan, The City

This article was originally published  by THE CITY

An Airbnb search showed available rooms throughout the five boroughs.
An Airbnb search showed ‘over 1,000’ available lodgings throughout the five boroughs, June 1, 2023. | Ben Fractenberg/THE CITY

Hospitality giant Airbnb and several of its local hosts filed lawsuits against New York City on Thursday, with both seeking to block a new short-term rental law and registration rules that they say effectively bans stays — and could force the cancellation of thousands of summer vacations.

The short-term rental registration law, which took effect on March 6, requires property owners and tenants to register their properties with city government before seeking to list short-term rentals on platforms such as Airbnb and VRBO.

If people violate this law, both they and the booking service face penalties brought by the Mayor’s Office of Special Enforcement, which regulates the stays.

But the new regulations have made it impossible for hosts to register their homes, homeowners and Airbnb allege in their lawsuits.

The city’s own data shows the regulations have slowed things down. On May 3, Office of Special Enforcement Executive Director Christian Klossner said his office had approved nine Airbnb registrations for short-term stays — with those hosts providing fewer than 0.04% of the platform’s active non-hotel listings in the city, according to the lawsuit.

“We were in support of regulations — all we asked was that they be fair and allow people like me to continue sharing our home,” said Gia Briscoe, an Airbnb host in Brooklyn and plaintiff in one lawsuit, at a press conference on Thursday in front of Manhattan Supreme Court.

“There are people like us across the city who are just sharing the property that they live in so they can get by. We asked the city and its leaders to please listen to us, but they ignored us,” Briscoe said.

Housing Scarcity

As the bill was debated in the City Council in 2021, it was supported by some local tenant groups, who said short-term rentals had contributed to a scarcity of affordable housing in their neighborhoods.

The Office of Special Enforcement reminds hosts that it remains illegal under New York law to rent an entire apartment for fewer than 30 days without an occupant present.

Data from InsideAirbnb, which pulls listing data from the site, shows that of nearly 43,000 current listings in New York City, 56.6% are of entire homes or apartments.

The bill’s lead sponsor, former Manhattan Councilmember Ben Kallos, said in 2021 that as a lifelong renter in New York City, he was “tired of having to compete with tourists for housing in this city.”

At the same time, dozens of New Yorkers submitted testimony describing the financial burden caused by the pandemic, and how they were able to stay in their homes with short-term rentals. The bill became law in early 2022.

A spokesperson for Adams said in a statement that the city is “committed to protecting safety and community livability for residents, preserving permanent housing stock, and ensuring our hospitality sector can continue to recover and thrive,” adding that the rules for governing short-term rentals have been clear for years.

“The short-term rental registration law was duly adopted by the City Council, and OSE implemented rules pursuant to the law,” spokesperson Jonah Allon said. “We have consistently worked with hosts and platforms to ensure they were aware of their requirements under the law.”

Karen Dunn, a lawyer with the Paul, Weiss firm who is representing Airbnb in the suit, said Thursday that the regulations create “two layers of impossibility — one on the host side and one on the Airbnb side.”

In addition to the volume of personal information hosts must submit to the city, companies operating short-term rental platforms are obligated to go through their own verification process.

Dunn said once OSE starts enforcing the “draconian” rules in July, the company will “cancel thousands of short-term rentals that have already been booked for summer vacations.”

Private Details

The suit filed by three homeowners Thursday alleges the law created “unlawful rulemaking” that includes restricting hosts living in one- and two-family homes from having locked spaces, like bedrooms, which is inconsistent with the city’s existing laws and codes.

The suit also claims the new rule requires short-term rental hosts to certify that they have reviewed, understand, and will comply with “obscure and complex” city codes, which are “unconstitutionally vague.”

Hosts are also now required to file paperwork that includes private information such as listing any non-relatives living in the home — a requirement that would include a romantic partner, according to the suit.

“Host applicants must notify OSE if the number of unrelated residents in their home changes, which means they must tell the government if, for example, a partner in a romantic relationship moves in or out of the house,” they wrote in the suit, saying the requirement violates applicants’ Fourth Amendment right to privacy.

The registration process is also laborious, Airbnb claimed in its case, alleging that it would be forced to reject even applicants who had been cleared by the Office of Special Enforcement if there were tiny inconsistencies in how they listed their properties with the government and the platform, such as calling an address as “Avenue” versus “Ave.”

The homeowners suing say the freedom to rent their homes for short-term stays has allowed them to stay in New York City, one of the most expensive cities in the world.

“This home is our retirement; it’s our everything,” said Sarah Brezavar, a plaintiff who lives with her husband in an Upper West Side brownstone, at the press conference.

“We need the supplemental income to cover the expenses of owning this house, including the mortgage, fuel oil, and utilities, insurance and taxes. Having the income from hosting is what allows us to keep our home.”

Airbnb’s lawsuit adds to complaints about the new law, saying it creates rules that are “impossibly burdensome, inefficient, and costly.”

“We are here today because we have no choice. These new rules amount to a de facto ban on short-term rentals in New York City,” Airbnb lawyer Dunn said Thursday.

THE CITY is an independent, nonprofit news outlet dedicated to hard-hitting reporting that serves the people of New York.

 

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