Immediately after New York Gov. Andrew Cuomo signed a law that subjects the hosts of illegal short-term rentals to hefty fines, Airbnb filed a suit in federal court seeking to negate the law.
The new law imposes a fine of up to $7,500 on anyone who seeks to rent an apartment for fewer than 30 days. Rentals of fewer than 30 days have been illegal in New York since 2010.
In its suit, Airbnb says the new law violates the federal Communications Decency Act, which does not hold websites accountable for what their users publish. The company also contends that its constitutional rights to free speech and due process are being infringed.
New York lawmakers say they took into account the Communications Decency Act when crafting the law, which is why the law fines the hosts and not the short-term rental companies.
New York City is Airbnb’s largest U.S. market; last year it accounted for about $1 billion in host revenue, of which the company took a cut.
Affordable housing advocates in New York, as well as in other cities, fear that short-term rentals are cutting down on overall housing stock and thus contributing to increasing rents.