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Airbnb Sues New York Over Restrictive New Law

23 October 2016

Gov. Andrew Cuomo signed into law Friday a bill that penalizes users of services like Airbnb for advertising short-term apartment rentals in New York City, which already are illegal under state law.

New York City outlawed those less-than-30-day short-term rentals in 2011, but didn't have a great way to enforce the rules. She said the state must take action to stop property owners who are treating their apartment buildings like hotels instead of residences because they can make more charging visitors nightly rates.

The bill, which passed both houses of the New York Legislature in June, represents one of the harshest restrictions on Airbnb rentals in the U.S, according to NBC New York.

"In typical fashion, Albany back-room dealing rewarded a special interest-the price-gouging hotel industry-and ignored the voices of tens of thousands of New Yorkers", said Josh Meltzer, Airbnb's head of NY public policy, in a statement.

The title of the study, 440 Million Reasons to Tax Airbnb Vacation Rentals, reveals the position of the company that ran it, but that doesn't mean the data is inaccurate. For now, however, NY joins Berlin, Barcelona, and Amsterdam in banning short term rentals.

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Airbnb has countered that their platform is an important source of income for working people-according to the company, 78% of its users in NY earn "low, moderate, or middle incomes".

"The law signed today will provide vital protections for NY tenants and help prevent the continued proliferation of illegal, unregulated hotels, and we will defend it", the statement read. Airbnb also says the new law violates the First Amendment rights of the company and its hosts. The passage of New York Multiple Dwelling Law Section 121 sparked praise from New York City lawmakers, and the immediate threat of a lawsuit by San Francisco-based Airbnb.

Airbnb confirmed it will file a lawsuit on Friday afternoon, a move it threatened to make earlier this fall. Most rentals offered on Airbnb are in New York City, but the new penalties would cover other regions of the state, as well. Airbnb is now fighting laws and criticism in San Francisco, Berlin, and Barcelona as a result.

Scrubbing illegal hotels from Airbnb's site "would have involved a lot of concessions", says Bradley Tusk, a political consultant to tech startups whose clients include Uber and FanDuel. But Airbnb has accused Albany of "backroom dealing, " and say most New Yorkers embrace the service. That number includes $110 million in lost tax revenue in NY, which is now subject to change if Airbnb listings cease in the state. The financial burden will instead fall on NY hosts.

Airbnb Sues New York Over Restrictive New Law