Airbnb and New York City have long had a contentious relationship with one another, and it's only going to become even more litigious, now that the short-term rental company is suing the city, its mayor, and the state attorney general. 2017 is going to be interesting for the sharing giant.
To say that Airbnb and New York City aren’t exactly the best of friends might be an understatement.
Although New York City is the $30-billion company’s No. 1 market in the U.S., local government in New York has never welcomed the alternative accommodations provider and its peers with open arms.
On Friday, Oct. 21, that relationship got much more contentious when New York Governor Andrew Cuomo signed into law a bill that would heavily fine people who advertise short-term rentals on sites like Airbnb that are in violation of current state law. That means someone who advertises an entire Class A apartment (an apartment in a building with three or more units, the most popular type of listing by far) for a period of less than 30 days could be fined anywhere from $1,000 to $7,500, depending on the number of violations.
Immediately following Cuomo’s approval, Airbnb sued the city, the mayor, and New York State Attorney General Eric Schneiderman, someone whom they’ve done battle with previously. See below for the full complaint.
On Monday, Oct. 24, New York State said it would not enforce the new advertising law until Airbnb’s lawsuit is resolved.
Why is New York so tough on Airbnb? It’s a complicated and complex issue, but long before Airbnb ever existed, New York has had a problem with the growth of illegal hotels. Prior to Airbnb, some landlords would choose to convert their apartment units into illegal hotel rooms for visitors, which led to the creation of the original Multiple Dwelling Law, way back in 1929. That law was updated in 2010 with companies including Airbnb in mind and put into effect on May 1, 2011. Last week, it was further strengthened by the new law regarding advertisements.
Airbnb fought the 2010 updates to the Multiple Dwelling Law and since then, Airbnb and its peers have not made any changes to their platforms to prevent people from advertising listings that are in violation of that law.
To better understand how Airbnb and New York City have gotten to this point in their relationship with one another, we think it’s important to better understand the history of their conflict, which Skift has covered in detail since its inception. Here’s a look back to what’s transpired since 2013:
2013: A Different Kind of Disruptor
Airbnb’s Growing Pains Mirrored in New York City, Where Half Its Listings Are Illegal (Jan. 7, 2013): Two years since the updated Multiple Dwelling Law went into effect, Skift highlights how half of the Airbnb listings for New York City could be in direct violation of the law.
Is Airbnb Illegal in New York? Definitely Not, But Many of Its Hosts Break the Law (May 21, 2013): A court case becomes a litmus test for defining what’s legal and illegal when it comes to short-term rentals in New York City.
Airbnb Gears Up for Big Legal and Legislative Battles in New York (June 5, 2013): And so it begins.
NYC Rules Airbnb Rentals Legal if at Least One Tenant Present (Sept. 27, 2013): The Warren case further clarifies the definition of a legal short-term rental under the updated Multiple Dwelling Law.
Airbnb Is Not Off the Hook in New York City, Says Chief Legislative Critic (Oct. 1, 2013): Just because Airbnb claimed victory in the Warren case, doesn’t mean the battle’s over just yet.
Airbnb CEO Gives New York His Three-Step Plan for Going Legit (Oct. 3, 2013): It involves crafting new legislation around short-term rentals, paying taxes to the city, and creating a neighbor hotline.
New York State Attorney General Subpoenas Airbnb User Records (Oct. 7, 2013): The first of the legal battles between Airbnb and the city of New York begins.
Airbnb Vs. New York: Hosts and Users React (Oct. 8, 2013): How do New Yorkers really feel about Airbnb? Here’s what they had to say.
Airbnb Files Petition to Block NY Subpoena, Cites Burden to Compile Data (Oct. 9, 2013): Airbnb refuses to give New York access to data on its users and how its business operates in the city.
Airbnb Is Fighting to Make Sharing Legal in New York, But It Already Is (Oct. 16, 2013): Instead of working within the existing legal framework, Airbnb is trying to convince lawmakers that a new law is needed for short-term rentals.
Internet Association Says Subpoena of Airbnb Could Set a ‘Dangerous Precedent’ (Nov. 11, 2013): Citing the Federal Communications Decency Act will become a recurring theme in Airbnb’s fight against stricter regulations and cities’ requests for transparent data.
Airbnb’s Most Notorious Landlord Settles With New York City (Nov.19, 2013): The first of many clear shots fired by the city that showed it is serious about enforcing short-term rental laws.
New York Legislator Explains What a Legal Rental Is to Airbnb Lobbyists (Dec. 17, 2013): Airbnb continued to fight to overturn the 2010 update to the Multiple Dwelling Law.
2014: What the Data Says
Airbnb in NYC: The Real Numbers Behind the Sharing Story (Feb. 13, 2014): The first in a series of data dives Skift conducted, which New York Attorney General Eric Schneiderman would eventually use in his court case against Airbnb later that year.
The 10 Airbnb Super-Hosts That Rule New York City (Feb. 13, 2014): While they were known for their hospitality, these hosts were also breaking the law.
Airbnb’s New York City Neighborhoods From Most Popular to Least Liked (Feb. 27, 2014): Skift’s deep data dive into Airbnb showed which neighborhoods travelers preferred to stay in and which ones they avoided.
Airbnb’s Newest Plan for Gaining Legitimacy in New York City: Pay $21 Million in Taxes (March 28, 2014): Airbnb said it’s willing to collect and remit lodging taxes in New York, as it’s done in other cities, but New York won’t budge.
What Happens When Airbnb and the NY Attorney General Meet in Court Today (April 22, 2014): Following a subpoena, Airbnb and Schneiderman met in court.
Judge Rules New York Airbnb Subpoena Too Broad, Attorney General Will Narrow Request (May 13, 2014): Schneiderman has to edit his request for information from Airbnb.
Airbnb’s Conflict With New York State Attorney General Isn’t Over (May 14, 2014): Schneiderman’s first attempt to subpoena Airbnb for information on its users in New York falls through, but he’s determined not to give up.
New York Attorney General Issues New Subpoena to Airbnb (May 14, 2014): Schneiderman argues for the right to have access to Airbnb data on hosts who are violating the law.
Airbnb and New York Attorney General Reach Agreement (May 21, 2014): Airbnb and the state make a temporary peace treaty related to data access.
Airbnb’s New Campaign Targets the 66% of New Yorkers Who’ve Never Heard of It (June 13, 2014): In its effort to grow its business in New York City, Airbnb puts a spotlight on its hosts.
New York Community and Political Leaders Target Airbnb’s Marketing Machine (Sept. 12, 2014): Opposition to Airbnb and its peers rally around a shared foe: illegal hotels.
New York Attorney General uses Airbnb Data to Challenge Its Sharing Story (Oct. 16, 2014): Using data compiled by Skift, the New York Attorney General showed that at least 72 percent of Airbnb listings in New York are in violation of state law.
2015: The Quiet Period
Airbnb Super Hosts Have Returned to New York City (Jan. 21, 2015): Although Airbnb told the city it had removed “bad actors” from its platform, they didn’t stay off Airbnb for long.
The Mainstreaming of Airbnb, as Seen Through Descriptions in New York Times Stories (Feb. 26, 2015): You know you’ve gone mainstream when the NYT calls you a “world-conquering start-up.”
New York City Plans to Spend $10 Million to Regulate Airbnb and Illegal Hotels (Nov. 16, 2015): That $10 million went to the Mayor’s Office of Special Enforcement which is tasked with finding and rooting out illegal short-term rentals and hotels.
Airbnb’s Data on New York City Business Shows Most Hosts Break the Law (Dec. 1, 2015): Airbnb finally released data on its business in New York from Nov. 1, 2014 to Nov. 1, 2015 to the public. The only problem? Before releasing that data, it scrubbed it to remove some 1,500 listings from potential commercial operators, leaving us to wonder if the company was being as transparent as it could, or should be.
2016: Government Strikes Back
Airbnb Purged Its Bad Actors But They Are Already Back (Feb. 25, 2016): Airbnb owned up to purging some 1,500 bad actors from its New York City data that was released in December 2015, but by February many of those same hosts were already back up and running on its platform yet again.
Airbnb’s Proposed Tax Agreements With Cities Raise More Questions Than Answers (April 18, 2016): As San Francisco’s example has shown, forming a tax agreement with Airbnb isn’t always smooth sailing, which could explain why Airbnb’s attempts to become legalized in New York City via tax agreements haven’t resulted in success.
Airbnb Loses a Fight in New York as Legislature Passes Strict Advertising Law (June 17, 2016): Lawmakers make their intentions loud and clear by passing this law.
Measuring the Impact of Airbnb Rentals on New York City’s Housing Crisis (June 28, 2016): Does Airbnb contribute to New York City’s already challenging housing crisis? A new report suggested it does.
Measuring the Impact of New York’s New Short-Term Rental Law on Airbnb (July 18, 2016): Skift examined what makes New York’s legal restrictions on short-term rentals different from other cities’ strategies, and why they just might have more teeth to them than others.
The Manifesto for a Common Sense Approach to Regulating Airbnb (Aug. 1, 2016): Skift tries to answer the question: Can cities like New York and platforms like Airbnb work together? Our answer is a resounding yes.
Airbnb Turns to Lawyers to Challenge Local Housing Laws (Sept. 8, 2016): Airbnb files a lawsuit against the city of Santa Monica, Calif., and threatens to sue New York should the new advertising bill become law.
Airbnb Wants to Strike a Deal With Politicians in New York and San Francisco (Oct. 19, 2016): Days before the governor’s approval of the new advertising law, the company made an 11th-hour attempt to thwart the bill from becoming law. Beginning Nov. 1, Airbnb said it will modify its platform so that it will no longer allow Airbnb hosts within the five boroughs of New York City from advertising multiple home listings.
Airbnb Loses New York Battle as Governor Signs New Law Aimed at Hosts (Oct. 23, 2016): Cuomo makes the new advertising law official and Airbnb immediately follows up with a lawsuit (see below).
Photo credit: Airbnb CEO Brian Chesky (M) with U.S. Secretary of Commerce Penny Pritzker this summer. Despite warm relations with senior federal government officials, Airbnb faces huge challenges on the local level, as is the case in New York City. GES 2016 / Flickr