Why has Airbnb sued the city of New York?

In 2022, the horror film Barbarian turned an Airbnb into a terrifying monster den. But Airbnb is not suing the producers of Barbarian. Instead, they are now indulging in a legal battle against New York City.

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• The news comes on June 1 when Airbnb Inc filed a lawsuit against the city for its new law that will limit the number of people who can host rental spaces.
• Among short-term rental providers like Airbnb, this law is turning into a “de facto ban” against them. The law is set to come into effect in July. 

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What does this law suggest? 

According to Airbnb’s filing, this law will require hosts to register with the city’s Mayor’s Office of Special Enforcement (OSE) and to get more certifications through a “maze of complex regulations”.

• These regulations are around zoning, housing maintenance and construction. Ultimately, this would make it more difficult for Airbnb hosts to do business. 

In the matter of OSE application reviews, Airbnb further mentioned in their filing that very few hosts will be granted registration in this process.  

What does Airbnb want? 

Through its legal filing, Airbnb is requesting the court to block the enforcement of this law altogether. 

As Airbnb mentioned in a letter addressed to its hosts, "Today’s filing comes only after exhausting all available paths for a sensible solution with the City."

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How NYC responded 

A New York City spokesperson mentioned in a press statement that Mayor Eric Adams’s administration "is committed to protecting safety and community livability for residents, preserving permanent housing stock, and ensuring our hospitality sector can continue to recover and thrive."

The Mayor’s office is currently looking into the lawsuit. 

What does this mean for Airbnb’s finances?

According to the short-term rental giant Airbnb, more than 5,500 short-term rentals are reserved to host more than 10,000 guests in the city. 

But this isn’t the first time Airbnb has faced a shortage of hosts due to a New York City law as in 2021, a previous law led to 29,000 hosts leaving the rental market altogether. 

NYC isn’t alone

New York City isn’t the only one clamping down on short-term rentals as many city councils all over America are coming up with ordinances to regulate their spread. 

Hosts must now obtain additional licenses and even pay registration fees. Business districts are similarly limiting the establishment of new rentals. 

In a latest development from today, even the Italian tourist hub of Florence is seeking to ban Airbnb apartments. The mayor Dario Nardella has expressed his interest in introducing laws for this even though no legal measures have been implemented yet.

The legal issues over Airbnb in America are mainly due to its status. Due to the ever-changing nature of the app and its rentals, the courts in American states are still struggling with categorising the Airbnb rentals as "commercial" properties or "residnetial" ones. A discussion among Airbnb customers and hosts on the website's Community section itself can give you an idea of how confusing this vague categorisation can be for governments all over the world.