Thursday, October 27, 2016
New York and Airbnb head back to court over illegal short-term rentals, and it may all come down to the Communications Decency Act
In a spate of cases across the country, Airbnb is opening up a line of attack that pits Internet freedom against land use regulation. The shield Airbnb seeks to use these days is primarily the Communication Decency Act Section 230, which provides that, "No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." Airbnb is arguing that this broad provision protects it against a host of regulations and fines.
For an analysis of some of the broader implications of how CDA is applying to short-term rental regulation, you might check out a podcast I did last month with Jamila Jefferson-Jones (UMKC) for the ABA Real Property Trusts and Estates Section, which is available here for RPTE Section members.
The latest salvo in this series of cases is Airbnb's new lawsuit against New York City. From the NYT:
Hours after Gov. Andrew M. Cuomo of New York signed a bill that would impose steep fines on Airbnb hosts who break local housing regulations, Airbnb filed a federal lawsuit contending the new law would cause it “irreparable harm.”
The heightened battle in New York follows lawsuits that Airbnb has filed against its hometown San Francisco and in Santa Monica, Calif., which have both moved to fine the company for illegal listings.
The company, which operates in a regulatory gray area around the globe, is also fighting tough battles in Amsterdam and Barcelona, Spain, which penalizes hosts who list illegal rentals, and in Berlin, which has banned most short-term rentals.
The new law in New York allows authorities to fine hosts up to $7,500 if they are caught listing a property on a rental platform such as Airbnb.
“New York is taking a bold step that will hopefully set a standard for the rest of the country and other countries in the world that are struggling with the impact of Airbnb on affordable housing,” said Assemblywoman Linda B. Rosenthal, a Manhattan Democrat who sponsored the bill.
Airbnb, which has tripled in value in just two years to $30 billion, is fighting hard against any regulation that would affect the number of hosts on its platform. The company cannot expand without a steadily increasing number of hosts, and its rental revenue growth could slow as more cities around the world move to push potential providers off the platform.
The New York law is particularly worrisome for Airbnb. New York City is the company’s largest market in the United States. The city’s hosts generated about $1 billion in revenue last year, and the company took a cut of that amount in fees.
In its lawsuit, filed Friday afternoon in Federal District Court in the Southern District of New York, the company contends that the law violates the company’s constitutional rights to free speech and due process, as well as the protection it is afforded under the Communications Decency Act, a federal law that says websites cannot be held accountable for content published by their users.
The new law “would impose significant immediate burdens and irreparable harm on Airbnb,” the company said in its complaint. “In order to be assured of avoiding liability, including potential criminal prosecution, Airbnb would be required to screen and review every listing a host seeks to publish.”
The lawsuit was filed against Eric T. Schneiderman, the state attorney general, Mayor Bill de Blasio and the City of New York.
New York lawmakers, including State Senator Liz Krueger, one of Airbnb’s primary legislative foes, counter that they had the Communications Decency Act in mind when they drafted the bill, which is why it holds the hosts responsible for advertising illegal listings and does not impose any fines on Airbnb.