Airbnb Inc.’s challenge to a New York City law requiring hosts to register for an operating license was thrown out by a state judge, further tightening restrictions on short-term rentals in the most populous US metropolis.
The company’s suit that sought to block Local Law 18, passed in January 2022, was dismissed Tuesday by state Supreme Court Justice Arlene P. Bluth. The measure requires hosts to get a city license and prevents booking platforms from processing transactions for unregistered rentals.
New York City already has some of the most stringent restrictions on such accommodations. It essentially forbids rentals in most apartments for fewer than 30 days without a tenant present. But the city has estimated that almost a third of the 29,000 short-term rentals are illegally listed.
Cities across the world have been cracking down on short-term rentals. In June this year, Dallas blocked vacation properties in certain residential neighborhoods, while in 2021, Barcelona banned all short-term rentals in private homes.
The crackdowns are driven by concern that home-sharing platforms like Airbnb, TripAdvisor and VRBO drive up rents for local residents. A 2019 study conducted by the Economic Policy Institute concluded that the economic costs of Airbnb to renters outweigh the benefits to travelers.
‘Not Welcome’
Airbnb had argued the new rule is a de facto ban on short-term rentals “by requiring extensive and intrusive disclosures of personal information and forcing open-ended agreement to labyrinthine regulations scattered across a complex web of laws, codes, and regulations.”
The city’s rules are “a blow to its tourism economy and the thousands of New Yorkers and small businesses in the outer boroughs who rely on home sharing and tourism dollars to help make ends meet,” Theo Yedinsky, global policy director for Airbnb, said in a statement. “The city is sending a clear message to millions of potential visitors who will now have fewer accommodation options when they visit New York City: you are not welcome.”
The judge, while acknowledging the rule will force Airbnb to take down many of its listings, said the new law gives the company a “very simple way” to ensure it’s not facilitating unlawful activity by properly verifying potential listings.
“Airbnb has known about these rules for many months and has had ample opportunity to tell its hosts about these new rules and tell them to apply for a registration number,” Bluth wrote. “Airbnb cannot make little or no effort to tell its hosts to register and then complain that it might have to take down hundreds or thousands of listings because they are not registered.”
City officials didn’t immediately respond to a request for comment. The city agreed to delay enforcement of the law until September pending the outcome of the lawsuit.
Read More: Airbnb Sues New York City to Block Short-Term Rental Law
While New York was one of the first cities where Airbnb launched its home-sharing product, Airbnb had said in its last annual financial report that no single city represented more than 1.3% of its revenue in 2022, or 1.1% of its active listings.
In the first half, revenue per available rental for New York short-term rentals rose 8.1%, compared to the average 1% decline in the top 50 markets, according to data analytics provider AirDNA, which tracks Airbnb and VRBO listings.
As part of the company’s attempt to cooperate more with governments, Airbnb launched its City Portal data tool in 2020. The dashboard gives local governments access to information on visitors and hosts, tracks how rentals affect local housing markets, as well as helps cities create new regulations.
The case is Airbnb Inc. v New York City Mayor’s Office of Special Enforcement, 154865/2023, New York State Supreme Court, New York County.
--With assistance from Teresa Xie and Natalie Lung.
(Updates with revenue data.)
