share
by Cheryl-Anne Sturken | July 20, 2018

Cheryl-Anne Sturken, contributing senior editor, Meetings & ConventionsThis past Wednesday, in an effort to crack down on illegal rental units, the New York City Council voted unanimously to require San Francisco-based Airbnb to disclose the names and addresses of its hosts, estimated at 40,000, to a city-run enforcement agency. Mayor Bill de Blasio must sign the bill for it to become law.

The New York City Council and multibillion-dollar global home-sharing company Airbnb have been locked in a contentious legal battle for several years now. Housing advocates have argued that short-term rentals contribute to rising rents, tenant displacement and landlords running illegal hotels. For its part, Airbnb, which is valued at close to $31 billion, maintains it helps homeowners rent out their spare bedrooms to offset costly mortgages and does not have illegal units on its rental site.

According to the bill, which passed with a 45-0 vote, a city listing is illegal under state law if a hosts rents out space for less than 30 days, in a building with multiple units, without being present during the stay. In addition, Airbnb could face a fine of $1,500 for each listing that is not disclosed to city officials.

"We can make sure that we are rooting out the people who are taking away our housing stock," said Councilwoman Carlina Rivera (D-Manhattan), who sponsored the bill. "This bill is about transparency and bringing accountability to the billion-dollar companies who are not being good neighbors."

In October 2016, Gov. Andrew M. Cuomo of New York signed a bill that would impose steep fines on Airbnb hosts who break local housing regulations, and Airbnb immediately filed a federal lawsuit contending the new law would cause it "irreparable harm." The suit was settled shortly after, with conditions that the law would not be enforced against the company but rather individual violators.

However, in April of this year, the city sued Airbnb after the company refused to comply with a subpoena for records related to a building in Manhattan's Chelsea neighborhood allegedly operating as an illegal Airbnb hotel. "It's time for Airbnb to come clean and share all its data on New York City listings and stop playing the victim, when really the only victims to date have been the millions of New Yorkers who today are paying higher rents because of Airbnb's business practices," said New York City Comptroller Scott M. Stringer in a statement.

The hotel industry was swift to react to New York City's new law, including the Washington, D.C.-based American Hotel & Lodging Association, which has in the past three years spent hundreds of thousands of dollars on research and data collection in a pushback strategy to thwart Airbnb's growth. The association has repeatedly argued that the home-sharing company's hosts do not comply with rules imposed on hotels, like anti-discrimination legislation, local tax-collection laws, and safety and fire inspection standards, and that it dodges paying local lodging taxes, which in term robs cities of million of dollars in potential revenue.

"Today the New York City Council passed an industry-setting measure to force greater transparency and responsibility for short-term rentals, while helping to maintain the fabric of New York neighborhoods and preserve residents' access to affordable housing," said Katherine Lugar, AH&LA's chief executive, in a statement. "Today's vote comes on the heels of a wave of cities, from Boston to San Diego, that are finally saying 'Enough. It's time for Airbnb to be held to the same standards, rules and regulations as every other American company large and small.'"

The new ruling is sure to have a significant impact on Airbnb, which counts New York City as one of its largest markets. According to Statista, an online global research, analytics and data-collection company, Airbnb is estimated to generate over $805 million in revenue this year in the Big Apple alone, up from $451 million in 2015.

"After taking hundreds of thousands of dollars in campaign contributions from the hotel industry, we're not surprised the City Council refused to meet with their own constituents who rely on home sharing to pay the bills and then voted to protect the profits of big hotels," said Liz DeBold Fusco, Northeast press secretary for Airbnb. "The fix was in from the start, and now New Yorkers will be subject to unchecked, aggressive harassment and privacy violations, rubber-stamped by the City Council."

When contacted for a statement on Wednesday's ruling, Vijay Dandapani, president of the Hotel Association of New York City, told M&C, "We commend the City Council for passing legislation to require short-term rental platforms to provide the city with the names and addresses of their listings. We expect that this will curb the rampant abuse of housing stock for illegal commercial activity in violation of city and state laws while providing an unfair competitive advantage to Airbnb and other platforms."