By Glenn Fleishman
August 24, 2018

Airbnb has sued New York City, claiming a law that requires the online home-sharing arranger to disclose detailed information about its participating hosts each month is unconstitutional and exposes private information to unfettered government and public scrutiny.

The New York City council passed the legislation in contention in July, and the mayor signed it into law August 6. It requires that online, for-fee, short-term rental platforms like Airbnb pass a list every month of every host, location, kind of rental (an entire or partial unit), how many days it was rented, and money collected by the host and paid to the booking platform.

Airbnb’s lawsuit asks the court to declare that these provisions violate portions of the U.S. Constitution and the New York State Constitution, and the federal Stored Communications Act. The suit maintains that information disclosed to the city’s Office of Special Enforcement could be used across city agencies and become part of the public record that could be requested by any citizen.

Thus, Airbnb argues, the intent is “intimidating New Yorkers into abandoning homesharing.” The company pins the blame in its suit on the hotel industry, which it says has engaged in a multi-million-dollar lobbying operation, and which has close ties to government via a former NYC city employee.

Airbnb declined to comment beyond what appears in its suit.

Part of the current debate is whether the number of units that fall outside NYC’s rental laws is significant and reduces the housing stock available to residents, thus forcing up prices and increasing the risk of homelessness. Airbnb says in its suit that only 28,000 homes or 0.8% of its listings in New York City are for entire homes, while there are about 3.1 million households (including homeowners and renters).

However, the lawsuit doesn’t include a number that would help scale that 28,000 figure. For instance, there are just 116,000 hotel rooms across the five boroughs, according to a 2017 market report by the city, and based on Airbnb’s figure, 350,000 total Airbnb listings.

This battle is another melee in a three-way war between Airbnb, city regulators, and hotel operators which has occurred in cities around the world. Like Uber, Airbnb entered markets originally largely without consulting with regulators, and allowed hosts—its members offering rentals—to create listings that could be at odds with local rules.

Many towns and cities, including New York City, allow whole-home rentals (whether an apartment, condo, house, or miscellaneous) for 30 days or longer if the owner or property renter isn’t living on site. Renting a room may require safety upgrades, and some localities had a rental tax in place long before Airbnb came around, even if it was hard to enforce.

As Airbnb grew in listings, hotel operators have apparently felt the pressure, and have tried to hit back. A 2016 report funded by a hotel trade group said 30% of Airbnb’s revenue came from “illegal” hotels, or hosts renting every unit in a building.

Many major cities have too few commercial hotel rooms and other rental properties relative to the crush of business travel and tourism. Airbnb relieves some pressure, potentially reducing the maximum rates hospitality operations can charge. In other places, Airbnb provides affordable or even cheap alternatives to hotel and motel rooms.

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