Airbnb files suit against NYC, challenging short-term rental law

Airbnb asked for an injunction on the short-term rental law

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The New York City Mayor’s Office of Special Enforcement got hit with a lawsuit opposing a short-term rental law from rental platform Airbnb.

Airbnb asked the New York State Supreme Court to declare the short-term rental rules it is challenging "invalid and unenforceable" and to stop them from going into effect via an injunction until a final decision has been made on the company’s petition. The company filed the petition on Thursday. 

The rules Airbnb is challenging come from Local Law 18, which the city adopted in early 2022. Enforcement of the regulations are slated to commence in July.

AIRbnb illustration

Airbnb asked the New York State Supreme Court to declare the short-term rental rules it is challenging "invalid and unenforceable." (Reuters/Dado Ruvic/Illustration/File Photo / Reuters Photos)

Under Local Law 18, people offering short-term rentals must register with the New York City Mayor’s Office of Special Enforcement. It also bars Airbnb and other such platforms from "processing transactions for unregistered short-term rentals" in the city, according to the Office of Special Enforcement’s website.

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FOX Business reached out to the Office of Special Enforcement for comment.

The New York City skyline

The Manhattan skyline is seen from the Empire State Building on April 3, 2021, in New York City. (Angela Weiss/AFP via Getty Images / Getty Images)

Via a publicly-available email sent to Big Apple hosts by Global Policy Director Theo Yedinsky, Airbnb claimed Local Law 18 and its rules "effectively ban short-term rentals in New York City," calling them "punitive and burdensome." The company also alleged in its petition that the rules would cause "irreparable harm" to both Airbnb and people in New York City. 

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The company claimed the registration requirement could deter 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 law, it also argued in the filing, would hurt Airbnb’s "goodwill and reputation" with hosts and guests and make the company face "substantial compliance expenditures that it will not be able to recoup."

Airbnb logo

The Airbnb logo displayed on a smartphone. (Mateusz Slodkowski/SOPA Images/LightRocket via Getty Images / Getty Images)

In the filing, Airbnb said it could stand to lose $6.7 million in a month if it had to take down all short-term rental listings in the Big Apple to meet verification rules for just that timeframe. The company reported having about 38,500 non-hotel New York City rental listings that guests had booked a minimum of one time as of January, according to the legal document.

Ticker Security Last Change Change %
ABNB AIRBNB INC. 146.78 +0.78 +0.53%

Airbnb hosts should expect to get information about "how the impending enforcement could impact [their] post-July 1 bookings, including guidance for [them] and [their] guests" early next week, Yedinsky said.

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