The New York State legislature recently passed a bill that would deal a low blow to Airbnb and to those who use it for supplemental income.
The bill in question will render the act of advertising the rental of an entire house for fewer than 30 days illegal, punishable by a substantial series of fees. As of September 7th, the bill remained both unsigned and unvetoed by Governor Cuomo, though his spokesperson has stated the Governor’s intention to review the legislation.
Under New York State’s Multiple Dwelling Law, renting out an entire apartment or home in a city with a population over 325,000 without the owner’s presence is already illegal. Smaller towns can also vote for the law to apply to their jurisdictions. This new bill would make the actual advertisements illegal, too.
Because a significant amount of Airbnb’s business comes from users who want to rent out their whole homes or apartments, the company has threatened to sue New York State, should the bill be signed into law.
In addition to the threat of legal action, Airbnb has also come up with a persuasive campaign in an attempt to sway Governor Cuomo on the issue. Since online advertising is a $149 billion per year industry, Airbnb has no qualms about spending “just south of seven figures” on this campaign.
The potential lawsuit would call into question the legality of trying to regulate Internet ad content outside of state borders, as well as a potential First Amendment violation accusation.
Airbnb has stated that they will be responsible for taking action against renters who use the site as a legal loophole. Because they are self-regulated, some renters are allegedly operating illegal hotels without any sort of inspections or accreditation being issued. However, a study using Airbnb’s own numbers has proved that users who abuse the platform by illegally renting out their apartments for more than three months out of the year account for 10% of New York City’s available rentals.