Monday 20 November 2017

Airbnb could face ban on advertising in New York City

A new law in New York poses a threat to Airbnb's business there
A new law in New York poses a threat to Airbnb's business there

Bob Van Voris

Airbnb Inc. and New York State are in discussions to settle a suit over a new legal ban on advertising of some short-term rentals, according to two people familiar with the matter.

The law, signed by New York Governor Andrew Cuomo on October 21 last, prohibits the advertising of accommodation that can't be legally rented out for less than 30 days, with violators facing fines of as much as $7,500. Airbnb sued to block the law, claiming it faced the possibility of "staggering penalties" if it were enforced.

Lawyers for Airbnb, New York State and New York City were to appear in court last Monday but asked that a hearing be postponed pending a possible resolution, said the sources, who asked not to be named because the discussions aren't public.

The move comes a week after both the State and City of New York said they would hold off enforcing the law until the suit is resolved. Officials can still go after apartment dwellers who flout the restrictions by advertising prohibited units on the internet, including the company's website.

Disclosure of the settlement talks came in a telephone conference last Monday involving lawyers for all the parties and US District Judge Katherine Forrest. The judge ordered the lawyers for Airbnb and New York State and New York City to update her by tomorrow of any developments. The new law doesn't affect people who rent out rooms as long as they're also staying in their homes at the time.

San Francisco-based Airbnb operates an online service that matches travellers with renters who offer short-term accommodations. The company has faced opposition by the hotel industry and by cities that stand to lose out on hotel occupancy taxes. Airbnb claims the New York law violates its free-speech right to advertise its business and creates confusion over whether the law applies to the company or its clients. New York claims the law will help prevent an explosion of illegal, unregulated hotels.

Airbnb ran into difficulty in Dublin last month, with An Bord Pleanala upholding a planning decision that an apartment in Temple Bar had undergone a material change of use due to its Airbnb activity and was thus not exempt from planning regulations. While the ruling did not stipulate that all Airbnb lettings require planning permission, it does open the door for case-specific challenges.


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