Facing legislation, Airbnb proposes new rules in New York

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With new legislation that would inflict heavy fines on Airbnb hosts sitting on New York Governor Andrew Cuomo’s desk, Airbnb is proposing last-minute concessions to address the concerns over affordable housing that are driving the legislation.

Among the company’s proposals is a new “one host, one home” rule that would allow New York users to only list one space for rent on the home-sharing platform. The plan is designed to keep landlords from pulling multiple housing units off the market to rent them exclusively on Airbnb. Hosts who own multiple properties can often make more money renting to tourists on Airbnb, but housing activists in New York and across the country say that this practice eliminates much-needed units from the market and drives housing costs up throughout the city.

Airbnb also offered to build a digital registration system for the city of New York, much like the one it created recently in Chicago. San Francisco requires Airbnb hosts to register with the city in a complicated, paper-only process — the outcome Airbnb is trying to avoid repeating in New York. The plan also includes a “three strikes rule” that would boot hosts off Airbnb if they are found to violate local regulations three times, and encourages New York to collect taxes from hosts and put the funds toward programs to prevent homelessness.

“Unfortunately, current state law does not distinguish between everyday New Yorkers who occasionally rent out their homes to make ends meet and illegal hotel operators who remove permanent housing from the market,” Airbnb’s policy team wrote in a memo outlining the plan.

Airbnb’s proposal is a gesture to demonstrate that the company can work with regulators instead of fighting them, and seems designed to send a message to Cuomo that the proposed legislation is not necessary. The bill, sponsored by Assembly Member Linda Rosenthal, would fine hosts $7,500 if they were caught posting illegal listings on Airbnb. In a press release, Rosenthal and State Senator Liz Krueger called the proposal by Airbnb a “PR stunt.”

“What Airbnb fails to realize is that one unit of affordable housing lost represents one family who will not be able to find a home in New York, and that is simply unacceptable,” Rosenthal told the New York Daily News.

Airbnb says the new policy proposal will go into effect on November 1. Cuomo has until October 29 to sign or veto the bill.

The bill went to Cuomo just yesterday, and Rosenthal questioned the timing of Airbnb’s proposal in a call with reporters. “At the eleventh hour they are desperate to change the narrative and we do not negotiate in newspapers, in the press and especially with the lawbreakers,” she said. “We are struggling with an affordable housing crisis and Airbnb and other sites like it are responsible for the loss of thousands of units of housing here. Airbnb’s entire business model is predicated on breaking the law.”

Airbnb’s policy head Chris Lehane defended the timing of the proposal, claiming that Airbnb had been shut out of the legislative process by “special interests.” Although legislators say that Airbnb is diminishing the availability of affordable housing in New York, Lehane argued that the platform allows middle class families to earn extra income. Lehane said, on average, New Yorkers earn $7,500 per year on Airbnb — the same amount they will be fined under the new law.

Lehane said the bill is “baffling to us in this time of inequality” and that Rosenthal’s efforts are “inconsistent with what’s in the best interest of the middle class.”

“Are you sitting on the side of the middle class, or the side of special interests?” Lehane asked. “Those that want to be on the right side of history really need to understand whats at stake here in terms of this question.”

New York first attempted to regulate Airbnb and other home-sharing platforms in 2010. Rosenthal says that Airbnb has ignored the law, and the steeper fines are necessary to force compliance.

She also condemned Airbnb’s proposed “three strikes” rule to remove hosts from the platform who it suspects are renting multiple units or running illegal hotels.

“Three strikes, you’re out?” Rosenthal asked incredulously. “We’re not making a deal here. We have a ‘one strike and you’re out’ policy in New York, because every single unit of affordable housing that we lose represents a family that does not have a place to live. And Airbnb now wants to decide to allow serial lawbreakers, essentially commercial operators, two more chances to break the law and steal more affordable housing? That is absolutely preposterous.”

Cuomo has only 10 days to consider the bill, and, given his focus on affordable housing while in office, it seems likely that he will side with those who want to crack down on Airbnb. Still, the company isn’t giving up — it has spent $11 million on a super PAC that aims to educate voters about elected officials’ attitudes towards homesharing.

In the event Cuomo signs the bill into law, New York may find itself facing a lawsuit similar to the ones Airbnb has filed against the cities of San Francisco, Anaheim and Santa Monica. In these suits, Airbnb has claimed that laws limiting the kinds of units that can be listed on Airbnb violates the Communications Decency Act, which protects platforms from legal liability for the content posted by users. However, because Rosenthal’s bill aims to fine hosts instead of Airbnb, the tactic that has served the company on the West Coast may not work here.

We’ll find out on October 29.

This story has been updated with comments from legislators and Airbnb.

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